NEW YORK (CNNMoney.com) — The U.S. economy shrank at an annual pace of 6.1% in the first quarter — almost as much as it did in the fourth quarter of 2008, according to a government report Wednesday.
The drop was much worse than expected. According to economists surveyed by Briefing.com, expectations were for a drop of 4.7% in gross domestic product, the broadest measure of the nation’s economic activity.
The stimulus bill was supposed to be immediate relief for the GDP contraction. Being fair, it was passed in February and only had ~6 weeks to do something. But what does that tell us about this particular bill (note to trolls and other arguers of dishonesty: you have to say, “This bill”)?
The stim bill could’ve kept the F-22 line going…and kept 92,000+ employed for the near future. Nope. The stim bill could have cut corp taxes (my idea was to cut the taxes on bond interest and proceeds from sales to zero, which would have seriously goosed corporate lending and led to a bull market in bonds almost overnight), but it didn’t.
Instead, porkulus focused on creating a new gov bureaucracy around health care monitoring and some construction. The first stimulus money to be spent in the state of Washington will be a 2-lane bridge to Microsoft. Will this have an economic impact similar to say, replacing the Hwy 520 floating bridge or the downtown viaduct? Uhhh, no.
The arguments agains the stim bill and many of the bailouts were that the cash infusions would either (1) not work quickly enough or (2) just wallpaper over problems. In the case of porkulus, it looks like any adjustment in GDP won’t be felt until Q2 or maybe even Q3. How many more jobs will be lost by then?
In the case of the bailouts, Chrysler and GM have managed to burn billion$ and are still headed towards Chapter 11 and/or a fire sale of their assets. How’d that work out?
Some D.C. bipartisanship might have given us a better bill, albeit a few weeks later that might have done some good…but thanks to Nancy Pelosi, Harry Reid and President “I won”, we’ll never know.