Which is it?

There is an interview in the Financial Times with Larry Summers, the director of the US President's National Economic Council. The article as a a whole is interesting just in the context of learning a little more about how a member of the Administration really thinks. The key part of the interview that I want to point out though is when he was asked about the state of the economy. His response:

I don’t think the worst is over ... It’s very likely that more jobs will be lost. It would not be surprising if GDP has not yet reached its low. What does appear to be true is that the sense of panic in the markets and freefall in the economy has subsided and one does not have the sense of a situation as out of control as a few months ago.

Essentially, we have not solved the problems, we have just made everyone feel better about the situation. Basically the standard American reaction to most non-life threatening crisis; "that was no fun and I would like to fix it, but it wasn't so bad. I can live with this, just have to do things a little different."

The President, however, continues to sing a different tune. According to him, the "Stimulus" is working according to plan. Better yet, he goes on to define what some of that plan was, which is somewhat different than what was portrayed by the Democrats and the media. Here is how our President defines the success of his plan so far:

July 11 (Bloomberg) -- President Barack Obama said his $787 billion stimulus bill “has worked as intended” as he pushed back against Republican criticism that his recovery program has failed to rescue the economy.

“It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession,” Obama, who is traveling today in Ghana, said in his weekly Saturday radio and Web address. “It has delivered $43 billion in tax relief to American working families and business.”

Further:

Obama, in his speech, said the stimulus program is helping state governments save jobs. Were it not for the program, the president said, “state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs -- layoffs that would affect police officers, teachers, and firefighters.”

OK.... Looking at these points one a a time:

1. We were told that somehow the $787 billion was going to create jobs, yet unemployment continues to climb. now we are told that the stimulus money went to pay unemployment benefits and provide health insurance to the unemployed (how does that work? Medicaid?). This is "working as planned"?
2. $43 billion in tax relief? Again, I must be confused or uneducated. Where is this tax relief? I know my paycheck has not changed. Correct me if I am wrong, but if there is no change to the tax rates then you do not see a "relief" (someone define that for me Please!) until you file your return in the form of a credit of some kind. Of course, we could always use the logic that says that since you stayed unemployed you were not receiving an income, therefore paying no taxes. What a relief!
3. Now the good part: the stimulus has saved Jobs according to Obama. What kind of jobs? Why, government jobs, of course. This is insane!!!!! We took taxpayer's money and gave it other government entities so that they would not have to lay off government employees! Guess what? Those governments that we are bailing out collect their own taxes to pay their employees. If we provided true stimulus that encouraged jobs and income growth with less tax burden then these state and local bodies could collect enough from the local citizenry to pay their employees. WITHOUT FEDERAL HELP! How does it feel to know that your money has gone to keep some bureaucrat employed somewhere that you probably do not live?
   

The whole thing is completely bonkers, and they want to do it again. The first one did not do the job so lets do the same thing again! Someone look up the classic definition of insanity.

So my original premise that the stimulus is either working or its not is flawed. The reality is that, according to the administration's definitions, it is both. We have still not hit bottom economically and unemployment is going to continue to rise, but the stimulus is doing what we planned. It is just that what we had in mind is not what we told you.

Some "Change". Do you believe in it yet?