Joe Biden has a plan to get the economy moving again after the coronavirus shutdown. Unfortunately for him, his plan has already been tried – and it failed miserably.
In an interview with Politico published over the weekend, Biden said that after injecting trillions of dollars to keep the economy from collapsing entirely, the next stimulus needs to be “a hell of a lot bigger.”
What should the money go for? A “trillion-dollar infrastructure program that can be implemented really rapidly (and) dealing with environmental things that create good-paying jobs.”
Politico says Biden also called for “massive aid to states and cities to prevent them from ‘laying off a hell of a lot of teachers and cops and firefighters.’”
“Biden said investments in light rail, clean drinking water, and half a million electric vehicle chargers on the nation’s highways could help retool the economy for the future.”
Where have we heard this before? Oh, right, Barack Obama’s 2009 stimulus, which was going to turbocharge the economy by funding “shovel-ready jobs,” heavy investments in mass transit, “clean” energy, electric cars, and a bailout of state governments.
By any fair measure, the stimulus was an utter failure. The billions in clean energy subsidies sponsored boondoggles such as Solyndra and Fisker Automotive. There were no shovel-ready jobs, as Obama himself later admitted.
More than three-quarters of the jobs “created” by the stimulus in the first year were in government. And shortly after Biden declared 2010 the “summer of jobs,” because that’s when large chunks of the stimulus would be spent, the economy shed almost 300,000 jobs.
One analysis found that highway construction jobs actually plunged by nearly 70,000 between 2008 and 2010.
And despite Biden’s claim that the stimulus was free of waste, fraud and abuse because he was the tough cop on the beat, there was plenty of each.
A 2010 report by then-Sens. Tom Coburn and John McCain listed 100 such stimulus programs – totaling $1.7 billion – as wasteful. One example was a $68,891 grant to the University of Texas at Dallas to study how people viewed the stimulus.
A subsequent investigation turned up more than 1,200 cases of fraud. A Treasury audit found that 30% of those claiming the nearly $6 billion in “residential energy credits” for home improvement projects didn’t own a home. That included inmates and children.
As for the state bailouts, an analysis by Hoover Institution fellow John Cogan found that states used the $173 billion to reduce their own borrowing, not increase spending levels. And federal data show that the number of state and local education jobs was lower in 2012 than it was in 2008.
A recent Heritage Foundation report found that after the Obama bailout, “states were left in a worse fiscal position and less prepared to manage the next crisis.”
The biggest failure of the Obama stimulus, however, was that it didn’t stimulate economic growth. The recovery from the recession – which ended six months after Obama and Biden took office – was the slowest since the Great Depression. Job and wage growth were sluggish, millions dropped out of the labor force, government dependency shot up.
The economy only started to pick up steam when President Donald Trump ditched Obamanomics for tax cuts and deregulation.
No matter how nostalgic Biden is about the good-old-days of the Obama stimulus, a repeat of its failures is the last thing the economy needs.
The first and only thing the economy needs to get back on its feet is for the government to get out of the way and let people get back to work.
— Written by the I&I Editorial Board