One Year After The Stimulus: Less Jobs, More Taxes, Bigger Government

One year after the launch of Obama’s stimulus package it has become painfully obvious that the stimulus’s declared goals have all failed: Unemployment has grown to 10%, the economy is worse off, and tax hikes are on the way. Only one thing was stimulated: big government – it is much bigger and more destructive now. And as always when government policies fail, the politicians behind it will claim that the idea was sound but that they simply didn’t spend enough money. And that’s why there’s now a $100 billion “jobs bill” in the works…

Government Stimulus, One Year Later

by Ron Paul

Last week marked the one year anniversary of the American Reinvestment and Recovery Act, or the stimulus bill, passing into law. While the debate over its success has been focused on whether or not it is stimulating the economy and on various questionable uses of funds, in my estimation this legislation is accomplishing exactly what it was intended to accomplish – grow the government.

Those of us concerned about the ever increasing level of government debt gasped at the astonishing $787 billion cost estimates for this bill. True to form it has actually cost 10 percent more at $862 billion. We heard over and over that government could not sit around and do nothing while people lost their jobs and houses. The administration claimed that unemployment would not go above 8 percent if the stimulus bill passed. Now, a year later, the government estimates that unemployment is over 10 percent. The real number is closer to 20 percent. It appears that those promises were total fabrications in order to close the deal.

In any case, the American people know that more government spending obviously equals more government. If the goal was to strengthen the private sector, Congress would have allowed businesses and individuals to keep more of their own money through meaningful tax cuts. Outrageously, the administration claims that they did “cut taxes” by reducing withholding, and that they have stimulated the private economy by increasing the amount of money in every worker’s paycheck. What they fail to mention is they did not change the total amount of taxes due. This means that all that money not withheld from paychecks will add up to a big unpleasant surprise when returns are filed this year. Many tax preparers are already seeing shocked taxpayers having to come up with big checks to the government when they normally expect a refund. Stimulus, indeed!

The administration also claims that thousands of jobs have been created or saved by this massive spending bill, but these are just more government jobs, and counterproductive in the long run. Funding for the public sector necessarily comes at the expense of an overtaxed private economy. But, it makes sense that government would seek to expand its payroll since every new bureaucrat becomes a likely advocate for big government, when an increasing number of Americans are demanding the opposite. But the more the burden, the closer the government parasite comes to killing its host.

Rather than learning the lessons of the past year, the administration is moving full-speed ahead to do even more economic damage. With the stimulus bill set as a precedent and victory declared, another “jobs” bill is in the works. And, in order to address the unavoidable issues of our massive deficit, the administration has named a bi-partisan commission to find ways to decrease it. Tax increases on the middle class are notoriously back “on the table”, exposing that campaign promise as another instance of merely saying what the people wanted to hear. If the obvious solution to our spending problems was seriously put forth, that is, getting back to the constitutional limitations of government, I would be shocked. More likely, this will be a tactic to increase taxes and spending in a way that passes the political buck.


  • Denise

    I agree, Sharon. I like Dr. Paul, but he doesn’t offer a clue about what to do about unemployment. When the gov, rewards corporations for ditching American workers for glorified slavery in other countries, what can be done to stop it? Both parties are guilty of this, starting with Nixon.

    I’m starting to think (maybe fear is a better word) that they are telling us, if Americans want the work, they will settle for what the corporations are offering China and India.

    Similar to the Brits telling the Irish to eat their children.

    • BeccaHandicapableSimmons

      His CLUE is to BACK OFF. Jobs are naturally created when people are allowed to prosper and do business. Due to overregulation and taxes, no one spends, no one buys, no one sells and no one has a job. This is the very thing that Dr. Paul is trying to say. The gov’t needs to get smaller, because it isn’t the gov’t’s responsibility to “create” jobs. American people do that. It’s their business to get out of the way so that we can do that and then protect what we create.

  • Isn’t the point Dr. Paul is making more basic in terms of less government. Who’s better at spending your money? You or someone else like the government? Do you want to pay more in taxes to basically have less. Why not give the tax payers the stimulus money to directly spend? We would have done a much better job at solving our individual problems. I’ve been involved in small business for over twenty years. I never imagined we’d see what we are seeing where the government will tell me how to run my shop. They are good at roads, bridges, defense and the like but certainly not my business. The point is that it’s my business whatever I’m doing or selling. Not one business owner needs more paperwork. All they really need are customers. More government will only limit our ability to service and market our businesses the way we want. Thanks for your honest and constant input Dr. Paul! Tom

  • JR

    To Kozar:

    Agreed that Obama didn’t get is here but congressman Paul is correct that Obama should have at least tried to change from big spending big government to little spend little government. Instead he increased spending and continued to allow additional billions to be spent all in the wrong places. I mean come on my brother lost his job in the auto industry, but even I know it was wrong to bailout GM and Chrysler not mention he gave additional latitudes to the Fed Reserve.

  • Jane at 96

    America needs divine leadership and courage to follow the leader. Let’s clean House (and Senate too)
    with our God-given right to vote. Be strong and of a good courage to represent our native-born citizens who pay taxes. Forget the past and move on to better and brighter future of the people, by the people and for the people.

  • Congratulations Ron, you are an inspiration. END THE FED!

  • sharon

    I am not finding any ideas from Ron Paul on creating jobs, stopping the exporting of jobs, and what to do in that area???

    I also disagree that people were cared for prior to Medicare/Medicaid. My father is 90 my husbands mother is 91… they will both tell you prior to medicare/medicaid you got some care if the doctor had time, but not much. Add to that the fact that today it is not just a doctors call to your house, but it is a ton of tests, expensive equipment, hosptials to pay, clinics.. etc.. His answer to stop medicare/medicaid will not work. Those in power care little about us. Our own AMERICAN businesses are going to china and hiring slave labor and we should trust them to do what is right? Healthcare is not different now days, corporations run it, back then it was all non-profit.

  • Paul Kozar

    Although I like Ron Paul, I don’t think it’s fair to point the finger at Obama. Bush pretty much bankrupt this country and let the mortgage market run amok causing this recession. There are many people to blame for this mess.