Preemptive Strike

Preliminary reports hint that obama will focus on job creation in tonight's SOTU address. He'll also propose 'investments' (read: more government spending) in certain areas. A brief look back reveals that more government spending doesn't create jobs - it eliminates them.

... if there is one thing we know with an empirical certainty, it is that increasing federal spending will not, on balance, create more jobs. Of course, whenever the government spends money someone is employed, or, at least, gets to cash a check. This is what Obama had in mind when he said--in a moment of supreme cluelessness--"spending equals stimulus." What Obama apparently does not understand is that government spending consumes resources, often inefficiently, that could better be used elsewhere. Whenever the government wastes resources, the country grows poorer and job growth is suppressed. This, in crude terms, is why the ballooning public expenditures of recent years have not caused a boom in the job market. (Text and chart from Power Line.)

As for specific 'investments', consider how well some of the governments most recent programs have worked. (from Doug Ross)

The "Cash-for-Clunkers" program cost taxpayers between $20,000 and $45,000 per vehicle purchased.

The "Stimulus" program, which cost $787 billion and was rammed through Congress using the premise that, without it, unemployment would not pass 8%, has resulted in persistent 10% unemployment and 17% "under-employment" (U-6). And the tab will be paid for by your children and grandchildren.

The $60 billion bailout of GM and Chrysler -- abrogating bankruptcy law with payoffs to various union bosses -- is an utter and complete failure. The businesses are unsustainable without a massive restructuring, including dramatically retooling union contracts.

"Green jobs" in the form of weatherization programs that have been utter, cash-burning frauds and failures. A series of spot-check audits of the $5 billion program indicates that fraud is rampant -- easily 20% can be chalked up to phantom services, blatant overspending on simple items, and unverifiable expenses. But not to worry -- it's only a billion dollars of wasted money, a pittance for this administration.

The bailout of AIG, orchestrated by the then-head of the Federal Reserve Bank of New York (FRBNY) Timothy F. Geithner, "wasted billions" of taxpayer money according to the inspector generator of the TARP program. The initial $85 billion rescue failed, forcing the Fed to pay above-market for the swaps it acquired. The result? "There is no question that the effect of the FRBNY's decision - indeed, the very design of the federal assistance to AIG - was that tens of billions of dollars of government money was funneled inexorably and directly to AIG's counterparties," according to the inspector general. In fact, the terms of the plan were so flawed that the Treasury Department had to dole out an additional $40 billion to AIG just weeks later. For his part in the debacle, FRBNY chairman Geithner was rewarded with a Secretary of the Treasury role by President Obama.

If the past is any indication, when obama starts babbling about 'investments' and other government programs, hide your wallet...