Stimulating Health Care Support

If you're wondering why the stimulus hasn't even slowed our skyrocketing unemployment, the example of AARP offers a hint.

AARP, which has given its full-throated support to Democratic health care legislation even though seniors remain largely opposed, received an $18 million grant in the economic stimulus package for a job training program that has not created any jobs, according to the Obama administration's Recovery.gov website.

The job training, says AARP, helped 500 older workers find permanent jobs. Assuming AARP's claim is true, fact remains that the $18 million AARP received probably hasn't created any permanent new jobs.  Maybe it was able to employ a few new trainers, but the training most likely helped seniors to land existing jobs.  It's not as if this is a bad thing, but it's not as if the economy got an $18 million shot in the arm which would create permanent self-sustaining new jobs.

It's worth noting that AARP has a stake in the health care debate as a provider of Medigap insurance.  Medigap and Medicare Advantage are supplemental policies for shortfalls in Medicare coverage.  AARP sells Medigap.  As a way of reducing the cost of the health care reform, Democrats had planned to cut Medicare Advantage subsidies, which would reduce competition against AARP's Medigap.

I suspect the $18 million for AARP is emblematic of the rest of Obama's stimulus spending.  It's primary intent is to stimulate political support for Obama and his policies.  Job creation is the hoped for side effect.  It's not working out that way, though. 

Update:  The Wall Street Journal has a timely column in which Jeb Hensarling and Paul Ryan explain why nobody expects our economy to make a strong recovery very soon.

Virtually none of the stimulus spending was directed towards encouraging broad-based private investment, and thus failed to encourage true economic growth. An analysis by economists John F. Cogan, John B. Taylor and Volker Wieland, published on this page on Sept. 17, suggests that while the stimulus succeeded in temporarily and marginally increasing disposable personal income, it left personal consumption spending virtually unchanged.

[...]

Health care, the administration's signature issue, is Exhibit D. Disregarding its impact on quality and access, its plan will surely cost well over $1 trillion over the next decade. The House-passed version includes an 8% "pay or play" payroll tax and a half-trillion dollar surtax on incomes over $500,000, much of which will strike small business. Both taxes will tend to depress investment and the creation of new jobs.

And looming down the road is the proposed cap-and-tax legislation, which will cost taxpayers $800 billion.

Beyond instilling tremendous political uncertainty into economic decision-making, these policies ensure that deficits will shatter all previous records.

Forget prosperity.  It's time to start worrying about survival.

More:  Obama's health care bill is buying its own support.  

On page 432 of the Reid bill, there is a section increasing federal Medicaid subsidies for “certain states recovering from a major disaster.” 

The section spends two pages defining which “states” would qualify, saying, among other things, that it would be states that “during the preceding 7 fiscal years” have been declared a “major disaster area.” 

I am told the section applies to exactly one state:  Louisiana, the home of moderate Democrat Mary Landrieu, who has been playing hard to get on the health care bill.

In other words, the bill spends two pages describing would could be written with a single world:  Louisiana.  (This may also help explain why the bill is long.)

Senator Harry Reid, who drafted the bill, cannot pass it without the support of Louisiana’s Mary Landrieu.

How much does it cost?  According to the Congressional Budget Office: $100 million.

$100 million -- the cost of one senate vote.