Friday, August 07, 2009

Taking Credit Where it isn't Due

Unemployment and jobs numbers came out today. Jobs were only down 247 million, better than many expected, and unemployment had a slight downtick. (How do those figures jibe? Folks dropping out of the workforce are not "unemployed". Look for that to tick up again when they extend unemployment benefits once more.)

Of course, this will fuel a continuation of absurd claims that the stimulus is "working" despite only $73 billion having been spent by the end of July ($197 billion "available").

By comparison, here's a non-exhaustive back-of-the-envelope account of what's been done so far, much of it done by the Federal Reserve. The Obama stimulus has been a drop in the bucket compared to numerous actions taken many months ago, and in some cases over a year ago.

Some of this is apples and oranges: some direct payments, mostly loans, some loan guarantees, some policy actions of no particular cost, some of indeterminate cost, but it ought to give some relative scale to the issue.
  • The Bush rebate checks - $168 bn
  • Initial TARP bank bailout - $350 bn (Total TARP $700 bn authorized)
  • Fannie/Freddie GSE "conservatorship" $200 bn initial commitment, potentially trillions in liabilities.
  • AIG bailout, an initial $85 bn.
  • Bear Sterns (non-recourse loan to JPMorgan) - $29 bn
  • TAF (Term Auction Facility) $20bn loan auction, plus a coordinated $10bn by the Euro Central Bank
  • TALF (Term Asset-Backed Securities Loan Facility) $200bn initial, $800 bn expansion authorized. (Including a $100bn Treasury backstop)
  • Money Market guarantee program (AMLF) $??
  • Money market short term loans (MMIFF) $600bn
  • Federal Reserve purchase of Treasures - $300 bn
  • Reduction of Fed Funds rate to an unprecedented range of 0-0.25%
  • Expansion of FDIC deposit insurance

There's more, but frankly it's tangled alphabet soup of acronyms and programs. Some of the programs have been reduced as others have expanded.

The WSJ took a look at the Fed's balance sheet, which had a slight tick down recently, but overall we're still on the order of >$1 trillion above where the Fed was before.

WSJ graphic (Fed data):

And that's just the Fed. How much do you think Obama's $73 billion is responsible for any nascent recovery we might be in? Negligible.

Let's cut the "stimulus" in half and pocket the rest of the money for debt reduction. We're gonna need it.


Anonymous said...

Speaking of taking credit where it's not due...Bill Clinton!


JoeCollins said...

you mean the north korea thing? I think bill was relatively subdued when he came back. he knew he was being used, and he willfully (and rightly) prostituted himself out to get those ladies released. cleetus done good on that one.

Anonymous said...

Yeah, I know. But it was still funny to see the media fawning all over him for the first couple days before realizing he had virtually nothing to do with it.