Obama’s stimulus failed, Bush’s TARP prevented a crash
Many Obama supporters believe Obama’s “stimulus’ package prevented a collapse of the economy by saving a broad range of financial institutions that were in serious trouble do to the subprime mortgage crisis. These financial institutions were NOT saved due to the “stimulus” of Feb. 2009, rather they were saved by TARP (Troubled Asset Relief Program). TARP legislation was signed into law by President Bush on October 3, 2008. It was designed to promote stability in financial markets through the purchase and guarantee of "troubled assets."
According to the Congressional Budget Office (CBO), as of February 22, 2012, TARP will have spent $431 billion. These costs stem largely from assistance to American International Group (AIG), aid to the automotive industry, and grant programs aimed at avoiding foreclosures.(1)
Obama $787 billion economic stimulus became law on Feb. 19, 2009. Obama claimed that this huge bill would save or create 3.5 million jobs.(2) Because all of this money had to be borrowed, the total cost of this bill, with interest, was over $1 trillion.
There have been numerous studies on the effects of the “stimulus” on the economy. Some say it “worked” and others say it didn’t. We believe the evidence is overwhelming that the “stimulus” did not work simply because it did not stimulate job creation in the private sector. In February, 2009, there were 110.3 million employed in the private sector. By Feb. 2011, private sector employment had dropped to 108.5 million.(3) The unemployment rate rose to 10.1 percent - which the stimulus was supposed to prevent from happening. If the government simply divided $1 trillion evenly among 3.5 million people, Congress could simply mail out checks for about $280,000 each to 3.5 million people.
The slow economic recovery that began in late 2011 would have begun sooner had Obama not run up these gigantic deficits and made the business climate so difficult.
Much of this “stimulus” spending was based on political considerations. Much of this money was a bail out for cities and states that are in financial crisis from years of high taxes and overspending by liberal politicians and the well is dry. Some money was to pay off political supporters like La Raza and ACORN. This bill financed make work jobs that ended when the money ran out. Government does not 'create jobs'. It takes money from the producers and spends it very inefficiently. (See Laws needed to fix our country - Economic Reform)
Download a PDF of "Obama's stimulus failed, Bush's TARP prevented a crash" to share with others.