Mar 29 2009
Raising falso stimulus hopes
One of the thing about stimulus plans is that they are no guarantee of success. In fact, they seem to be getting such good press that you could call it false hope.
Even with the downturn in the economy, California is still a $1.5 trillion dollar economy. Spending $85 billion (with $35 billion of that in tax breaks that is likely to not help the economy, but help famlies pay off debt or save), is like droping a teaspoon of water into a one gallon tank. The numbers involved seem so large, that it is easy to mistake one large number $85 billion, as a number large enough to make a difference. But the simple math shows $85 billion won’t really matter.
California has lost over 2 million jobs. The Governor has said that, “So as you know, for every billion dollars that we spend on and invest in infrastructure, it creates another 18,000 new jobs, so this is why we are so eager to get this money from the federal government,” during a stop in Merced. So if we spend the planned infrastructure money - which is $10 billion, that makes 180,000 jobs.
180,000 is a small percentage of 2 million jobs lost. In fact, most of those jobs are going to the construction community. The construction community is hardest hit in terms of unemployment, but makes up less than 5% of California’s economy. So while the stimulus might be good for construction, it is not good enough for California jobs as a whole.
The stimulus package might work, or might not. Let’s not raise false hopes saying that it is the answer to the recession. The number clearly show it is not.
