Fuzzy Math?

" Welcome to The Journal Editorial Report I'm Paul Hugo just days after learning that. Unemployment rose to its highest level in almost 26 years President Obama promised this week to wrap up the pace at which. Funds from the 787. Billion dollar economic stimulus package are spent. So far only 44 billion dollars or just over 5%. Has actually gone out the door. The president predicted Monday that the increase spending would save or create 600000. More jobs by summer's -- that's on top of the a 150000. Jobs the administration claims. The stimulus package has saved or created already. Here to check the president's math Wall Street Journal columnist and deputy editor Dan -- columnist Mary Anastasia O'Grady. And senior economics writer Steve Moore Steve so. The stimulus money was supposed to simulate. What's taking so long for this money going to get out the door."

" Well you know pol when the president signed this bill into action he said you know we didn't. Put this bill. We didn't sign that step if we didn't have this program we got about 9% unemployment rate -- signed that we got the money -- now we haven't gotten -- helpers I don't know. Unemployment rates -- hasn't. We're very well I think you ask my question what is taking so long to spend this money. It and I think the answer is that whenever government tries to act quickly it's like watching a race between us now on a turtle on the government it's just too slow and plotting. To get this money out the door and it really raises the question if you wanted to have money back quickly why not just give everybody a tax rebate check I'm not in favor of that which all the money would be out there on the economy right now when it's need to look and I think the -- about is that yes the Democrats wanted this money to go to their special interest groups like the unions and groups like acorn and so on but. Leave the tax credits are part of this deal -- that money is going out there as we speak it's not doesn't seem to be making that much of the differences is al-Qaeda and other critics from the left Paul Krugman and others right. That this was an insufficient stimulus we should -- who have spent more. Well that is the interstate there you know that's a proposition you cannot possibly refute it doesn't work that -- about the warm or -- I -- war and I think the problem the whole problem with this theory -- Paula is that look at what is happening to the dollar and look what's happening to interest rates there is a negative stimulus -- fact. From all of borrowing that I think is canceling out any positive effect of the spending."

" You know let's look at that that the spending -- you've got 787 billion dollar stimulus you've got 410 million that they've left over from fiscal year 2009 they passed a budget proposal of three and half. Trillion dollars and you have the health care spending that is pending that could be anywhere between one point two and one point five. Trillion dollars is is Steve right that this is having some kind of an effect. On expectations. For inflation and causing the increase in interest rates."

" Sure I think that the idea of their own spending is going to and create growth and that growth is going to create tax revenues from the tax revenues are going to be used. To pay off in a real live happily. That is not flying particularly in the -- in the financial markets as Steve mentioned. Interest rates going up you know with the Fed federal -- the Federal Reserve had the idea that they would buy treasuries and buy buying treasuries and other words financing the government federal debt issued to pay that it -- to finance deficits that that that would hold interest rates down. But in fact the way the market is reading that is as the Federal Reserve is now blurring a line that's supposed to be. -- of independence. And buying federal -- they're -- the market's getting nervous about inflation and what happens is. That the top ten year note of the Federal Reserve and the thirty year bond starts to go up in price and those are closely tied to market and those are also."

" Very significant indicators of future inflation expectations. Not that there's inflation around the system because nobody thinks their wrist but what people think they might have to repay. In ten years or twenty."

" Right -- what I'm saying is that the that the market is worried. That the Federal Reserve has taken -- job financing -- as well there's one place where this is having a real world effect. That's in Washington DC. The famous blue dog Democrats are in a panic over all of this data is good -- any Democrat conservative Democrats from south plains states centrist. There are constituencies. Are showing anxiety over this level of spending and they have been telling Barack Obama that who expects them to vote for this huge. Health care initiative that he wants the past and they're telling him. How can we passed for that vote for that much spending. When we have this deficit."

" And why don't believe that's why the president this week it day after he talked about getting a stimulus money out faster here on that we've got to get the deficit down more it because any -- and all those blue dogs from in the White House said boy am -- deficit hawk and we won't we won't let those increased. It is that going to fly as a political matter. Yet the other big budget story here this week. Was that President Obama announced he's going to go back the -- got. When I knew that this is pay as you go spending and when I heard him I look I literally thought it was an April fool's joke when he said that's because this is something that was put in place. Back in 2000. I believe it's 2007 when Nancy Pelosi became speaker at that time we had a budget deficit of 150 billion dollars we've had this pay as you go mechanism in place now for three years now that the opposite -- 150 billion its one point eight trillion everything that President Obama has done over the last three months everything from the stimulus bill to the bailouts that the children's health plan. Hundreds of billions of dollars of spending has all been in violation of the page you go rule all right."

" We're going to have to keep following that Steve but that there is one place the stimulus does seem to be working in Washington DC that's right the economy is booming in the nation's capital. -- the area's unemployment rate dropped for the second consecutive month. The five point 6% in April the national unemployment rate will remind you hit nine point 4% in the you stimulus projects and investments in green tech in particular looked like a jackpot. For the beltway as former venture capitalists and now democratic senator Mark Warner of neighboring Virginia put it. It helps to be aware of them money is or at least where everyone else's money he has. To -- week."