A Year Later, the Stimulus still Fails
The American Recovery and Reinvestment Act was passed in February 2009. Since then unemployment has gotten progressively worse.
New unemployment number just came out and guess what, unemployment is still high, 9.7%!
Compared from March 2009, the March 2010 numbers are bad.
While the numbers of unemployed less than 15 weeks are lower now than in 2009, the numbers for those unemployed greater than 15 more than make up for the difference.
|Duration of Unemployment||March 2009||March 2010||Difference (Today v Year ago)|
|Less than 5 weeks||3,067||2,402||-665|
|5 to 14 weeks||4,523||3,599||-924|
|Greater than 15 weeks||6,305||9,676||3371|
The average duration of unemployment is up from 21.2 weeks to 32.1 weeks. Let’s not forget that the BLS doesn’t count people discouraged in their labor report. So expect the number to be a lot higher than the “official” Government numbers
The only thing the stimulus is good at is increasing the number of Government workers.
Employment in federal government was up over the month, reflecting the hiring of 48,000 temporary workers for the decennial census.
So what does this mean about Stimulus?
Well I’d like to think that it just doesn’t work. Of course these number neither prove nor disprove anything. If the Keynesian theory is correct, and Government can “prime the pump,” then it should be concluded that the Obama Administration is just incapable of being able to prime anything. All those billions of dollars have been, essentially, wasted. That’s money we don’t have! It was either borrowed (by the Chinese), taken (taxation) or merely printed from thin air (Fed buying Treasuries).
Of course, I don’t think the Keynesian assumption is the correct one. Whether or not the Keynesians like Krugman admit it or not, the fiscal nightmare is getting closer and closer.