A news service for the people of Michigan from the Mackinac Center for Public Policy

While President Barack Obama started a nationwide campaign this week to promote the success of his economic stimulus program, two prominent economists grade it as an “F.”

David Littmann, senior economist with the Mackinac Center for Public Policy, and Sam Staley, the director of urban growth and land use policy at the Reason Foundation in Los Angeles, both said the program is failing.

“It’s an F,” Littmann said. “It wasn’t in any sense economic stimulation. It was government protection.”

“I give it an F,” Staley said. “It seems to me it is a no-brainer.”

Michigan’s unemployment rate was 12.7 percent in February 2009 when the American Recovery and Reinvestment Act of 2009 was passed. It peaked at 15.2 percent and in December stood at 14.6 percent, the highest in the nation. Nationwide, the unemployment rate has jumped from 8.2 percent in February 2009 to 9.7 percent in January 2010.

Vice President Joe Biden was in Saginaw Tuesday to tour a small business, a jobs training program and a solar factory that all received money from the federal stimulus.

It’s Obama’s plan to defend the $787 billion spending plan. Administration officials are spreading out all over the country to visit 35 communities this week to defend the program, according to the Associated Press.

The American Recovery and Reinvestment Act injected about $6.3 billion into Michigan’s economy.

But Littmann and Staley both said the unemployment figures in Michigan, despite the infusion of cash, show the stimulus isn’t working.

“All I see is unemployment,” Littmann said.

“It was poorly designed to begin with,” Staley said. “It was not targeted for job creation of any consequence. It was a backdoor way to continue to fund the projects the Obama administration wanted. Under the mantra of jobs they just packaged a bunch of programs under the stimulus. It’s not part of a strategic or well designed program to stimulate the economy.”

For example, Flint’s unemployment rate was 13.8 percent in February 2009 when the stimulus program was approved. It was 16.6 percent in December 2009. Flint was approved for $2.2 million to pay for two environmentally friendlier electric buses.

“These programs would probably not have been funded under normal circumstances,” Staley said. “The poorly designed nature of the stimulus has meant there is a lot of money going into the economy without much added value. We could be diverting resources away from more productive uses.”

Two women have hit the trail trying to get term limits passed in the city of Grand Rapids. Their efforts could be a barometer of public sentiment as some Lansing politicians discuss the merits of eliminating term limits for state lawmakers.


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