The Truth about the Stimulus that you Don't hear

This is by far one of the best stories written explaining the Stimulus package in terms we can all understand.

Fox News Story

The most obvious explanation is the $36 billion in increased unemployment insurance benefits. Larger benefits at least for this year will encourage some people, who may be unhappy with their jobs, to be unemployed while they look for something better. Others will be a little more reluctant to take a new job when they are offered it. Unlike the rest of the “stimulus” package that is over two years, since the increased benefits are only planned for this year, the higher payments will increase unemployment this year and then start declining soon after the extension ends.

Yet, the “stimulus” package will do something else that will increase unemployment at least as much. Most of the new jobs will be for people who are currently employed. By moving money from places where it is currently being spent to places where the government wants it spent, you move the jobs also. But it takes time for people to move between jobs. That is called unemployment. - FOX News

The jobs that the government “creates” may be in different industries and they may be in different places. You increase subsidies even more for alternative energy, and of course those companies will expand, but the subsidies also mean that less will be spent on less politically correct energy sources.

You might create jobs in California, but you will reduce the number of jobs in coal mines in Pennsylvania, West Virginia and Ohio, or oil fields in Oklahoma and Texas. Where will those people who lose their jobs go? They aren’t going to instantly pack up their cars and move to California. They may not even have the right sets of skills for the new government-created jobs. Wherever it is these displace workers end up, it will take some time, and during that time those workers will be unemployed. - FOX News

These changes are extremely reminiscent of what happened during the Great Depression. Not only do you have government-created jobs, you had the infamous Smoot-Hawley tariffs to protect American agriculture. We had strengthened unions that got some workers higher wages at the expense of other workers’ jobs. Many economists have argued that all these different changes created and prolonged the unemployment disaster we faced during the 1930s. - FOX News