Peter Morici: Stimulus Spending and Lost Hope

"Unemployment fell to 10 percent in November, but progress was achieved only because 291,000 more adults did not look for work and were not counted in the monthly tally of jobless Americans.

"Though job losses were trimmed, the footprint of the $789 billion dollar stimulus package was not to be found. Construction, despite an uptick in housing starts, shed 27,000 jobs, and governments added a paltry 7,000 new workers.

"Only $100 billion of the stimulus was earmarked for infrastructure and the federal bureaucracy is slow about spending it. Much of the rest of the money went to tax cuts used to pay down credit card debt, payoffs for congressional constituents, like summer grants for professors, and to shore up state and local budgets, where officials shortened furloughs but did not add workers.

"A second stimulus package could provide some temporary jobs if given quickly to states and municipalities for repair and rehabilitation projects. Also tax credits for energy saving improvements in homes and commercial buildings would help if the rules and paperwork were simple and not like the nightmare created by cash for clunkers.

"Businesses need customers and capital to create permanent jobs but have neither because of Washington's bad energy and trade policies and its failure to use the TARP as promised.

"The $400 billion trade deficit is terrible for jobs creation."