The Great Depression was not resolved by a decade of stimulus spending and Government intervention.  When World War II broke out in 1939 (9 years after Smoot-Hawley and 6 years after The New Deal) the unemployment rate was above 17%.  Link to graphical analysis. 



Based on an understanding of the forces which created and are perpetuating The Affordable Mortgage Depression, modern stimulus spending efforts had no chance of resolving the current economic crisis either.  Link to article. 

In the 1930s there were not computers, regression-based analytical tools or an effective means by which to gather highly detailed economic data.  This time around the efficacy and intent of stimulus spending initiatives may be better analyzed.

A Definitive Analysis

The following is a teaser for, and links to, a fascinating analysis by Veronique de Rugy of The Mercatus Center at George Mason University.  The study utilized data from Recovery.gov, the Bureau of Labor Statistics, the Census Bureau, GovTrack.us, and others to compile a series of facts about recent Stimulus Spending.

The study found that during the latest quarter for which data is available:

• The cost of each job claimed to have been “created or saved” was $285,814 (up 16% from the previous period)

• There was no correlation between the allocation of funds and relevant unemployment indicators.  Unemployment within a district was not the factor used to award stimulus money.

• Democratic districts received one-and-a-half times as many awards as Republican districts

• Democratic districts received two-and-a-half times more stimulus dollars than Republican districts ($122 billion vs. $46 billion)

• The average dollar amount awarded per Republican district was $261 million, while the average amount awarded per Democratic district was $472 million

• The total number of jobs claimed as “created or saved” by Stimulus Spending since its inception declined last quarter, shrinking from 634,000 to 597,000

Link to Working Paper

Link to C-SPAN Video of Testimony Before Congress (testimony commences in French with relevant content beginning at 115:48)


Updating the Stimulus Spending Delusion (link to original analysis)

Unemployment continues to be 2% above levels used to justify the $787 billion Stimulus Spending Bill, and has "created or saved" 597,000 jobs compared to the 3,675,000 it was supposed to generate by the end of 2010.




Dismal Reality

The $787 billion Stimulus Spending Bill failed to achieve its stated goal, purportedly “created or saved” a few hundred thousand jobs at extraordinary expense, and has now been proven to be a political boondoggle.

2/10/09 - The Stimulus Bill will not work because it can not work…

Spending huge sums of money that we don’t have, burdening our economy with the liability of having to service and repay another trillion dollars of debt, all to create a few government dependent jobs which produce no real economic value will do nothing to alleviate any of the economy’s problems.  What it will do is distort the economy further, obscure what is really transpiring, slow down the economy’s inevitable reset, deepen the economic crisis and threaten the US Government’s solvency and credit rating.

5/8/09 - In only a few months it should be evident to all intellectually honest people that the Stimulus Bill was an ineffective, waste of money relative to the professed benefit of such spending.  Taking into account that we will be in debt by an additional $787 billion, which will act to restrain future economic activity, and the Stimulus Bill may represent the most egregious waste of money in U.S. history.