UNFOUNDED OPTIMISM

Unfounded Optimism

Today’s column takes me back to the economic crisis we have been facing. I continue to be very pessimistic about a recovery being “just around the corner.”

When someone tells me that, I am tempted to ask “which corner” and how far away is the “corner”. Has anyone actually looked around the “corner” to see if a recovery is really there.

Some time ago the government passed a huge handout bill. They called it a stimulus. Getting money into the hands of the people was so serious they delayed vacation time to be certain to vote on it. This was pretty impressive.

Ever wonder where that money went and how stimulating it has been?

I refer you to www.Recovery.gov the U.S. government's official website providing easy access to data related to Recovery Act spending and reporting. For those of you who really want to study this the site will give you a great deal of factual information and send you to the medicine cabinet in your bathroom for some Pepto Bismal.

The government announced that they would find someway to stimulate our economy and avert disaster by spending, roughly,

$239, 427, 000,000! (Be sure and count the zeros!)

Now keeping in mind how serious this situation was, you will probably be mind boggled to learn that according to the government site they still have NOT paid out :

$207,282.000,000!

So if the average citizen is wondering why they are not seeing or feeling a recovery, wondering about the sense of urgency, and hoping for the best, he will be once again find that the wheels of government do indeed move slowly. In fact, he might wonder if they move at all. Send someone at once for the WD-40!

Here is a little chart from the government site that shows you where some of the money is located. Please let me know when you see any of it coming your way.



Department of Health and Human Services
$32,492,039,173
2. Department of Labor
$26,304,687,495
3. Department of Education
$19,588,109,131
4. Social Security Administration
$13,226,386,752
5. Department of Agriculture
$4,881,490,757
6. Department of Transportation
$3,144,716,111
7. Department of Housing and Urban Development
$1,511,778,929
8. Department of the Treasury
$1,202,052,720
9. Department of Justice
$1,159,402,537
10. Department of Energy
$723,101,786




The New York Times reports that 263,000 jobs were lost in the month of September alone and that this lifted the unemployment rate to 9.8% This news from the government will undermine an economic recovery according to economists.

Brilliant deduction! Fantastic insight! Boy are we lucky to have those fellows working for us down there in DC and keeping us posted on trends.

Broadcast news and print news naturally want to bring us the good news on the economy. I acknowledge that there is often good news. But as in any equation, the good news has to be considered along with the bad news and then a summary position articulated.

Good news: some stocks are increasing in value
Question: are more stocks increasing than decreasing?

Good news: the government is investing in the economy
Question: based on their own figures, when do we get the remaining money.
Next question: looking at even a low interest rate on that amount of cash, how much is the uninvested portion of the stimulus earning the government each day? And will they give that to the people, too? Those of you who believe that, come to a meeting at the back of the cemetery at 2AM next Tuesday where we will plan how to spend it.

Good news: some companies have been able to bring back laid off workers.
Question: how many companies have not increased employment and isn’t it obvious with the unemployment statistics that things are getting worse, not better?

Good news: there has been an uptick in the housing market.
Question: so the price I could get for my house is more this year than last, but still a great deal less than I could have gotten three years ago, and maybe not enough to cover the remaining balance on the mortgage loan. Why celebrate a modest uptick before it becomes a return to normal?

Readers, I have some bad news for you.

Housing prices have not returned to where they should be.
Stocks have not recovered the value they lost.
More people are out of work every day.
The government has kept the largest portion of the money they told us would be used to help us.

And in today's news is a report that The World Bank could be out of money in 12 months!

Feel free to call it a recovery if that is what floats your boat!

I will call it a fiscal disaster.