Monday, September 12, 2011

The Stimulus plan. Did it really work to help unemployment?

Much of the argument regarding the Unemployment rate and whether the stimulus plan President Obama passed after his election, boils down to how many are interpreting the data. My readers know I do technical analysis of charts for the stock market. This skill can also be used to analyze any data as most engineers know. I learned much about charting as an engineer for IBM. So let me show you how I interpret the Unemployment rate chart below. First the chart and then the discussion.

In the chart above, I have an arrow showing when President Obama actually started his job as president. It was in late January 2009. It took a few months to pass the Stimulus plan and then additional months before the effect would be felt in the economy. You can see the trajectory before President Obama took office. The steep climb in the unemployment rate was astounding. It had built up momentum and this momentum was going to continue for an additional 6 months before even a passed stimulus package could be start to be spent. Then was the lag, as the plan got implemented which then we were at the peak unemployment rate. The argument that the stimulus did not work are just ludicrous.

The only way out of the problems we have with the debt and with unemployment is to get the economy growing again so more people can pay taxes and that government plays a role in doing that, along with the private sector. The private sector is uncertain about the near term future and frozen like a deer at night looking into the headlights of an oncoming car or truck. The Jobs Stimulus Plan President Obama offered up last week is the only game out there currently that can help. If Republicans, and specifically the Tea Party, can stimulate the economy another way, have at it. Propose something, but don't just say NO! I know your number one priority is to see that President Obama doesn't get re-elected. But you own the economy now too and you haven't passed anything to help. So get on the train or get out of the way!

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