I’ve been critical of the economic stimulus for a number of reasons:
1) Wasteful spending has been rampant
2) There was more than enough pork to go around
3) It was never a stimulus, so much as a giant public works project designed to upgrade infrastructure
I’ve never been against the stimulus, just its branding. We need investments in roads, energy efficiency, and funding to put people back to work doing things that will actually do some good (such as winterizing homes and buildings). But it was always marketed to us as a stimulus, as if this was going to be the smelling salt. The way it was structured, there was just no way that would happen.
The structure was basically to split some $800 billion in tax cuts, aid to states, and infrastructure investments. More or less this was split into thirds. Tax cuts can be immediate but also delayed. For example we all saw a moderate decrease in our liability immediately, but there were also cuts reserved for people that hire unemployed workers and other cuts to businesses. Aid to states and infrastructure improvements are the focus of this post.
There has been no shortage of stories about wasteful government spending of stimulus money. Some of it comes from the right side of the political spectrum, likely from the same people that take credit for diverting funds to their respective constituencies. But they aren’t lying about the waste. This was to be expected though as no funding program operates at 100% efficiency. Waste will happen, money will be misappropriated, and some crooks will get rich. I’m critical of it because it was too much too fast. The infrastructure program should have been a project by project spending allocation, instead of the blank check method being used which provides more opportunity for waste.
But it turns out the capital is not flowing even at the pace the Obama administration has expected, dragging along an already stagnating economic recovery.
Some local governments are having trouble deciding exactly what to do with their money. Some are giving it away to other governments (like county to city) that can put it to use, while others have actually hired consultants to figure out exactly what to do with it. Why?
Because they don’t want to end up on the list of wasteful spenders. They don’t want to be the subjects of stories about “sidewalks to nowhere” or “the quarter million dollar hot-flash yoga class”. In other words, they’re being smart.
Does it look good to spend a portion hiring someone to figure out how to spend it? No. But it will look worse if your town ends up in a report about wasteful spending.
This was not a stimulus program. It was marketed as such so it could pass through Congress, but it has not kick-started our economy as advertised. What it has done is a number of improvements to infrastructure, saved a few jobs and added others, and put a little extra coin in our pockets. Yes at the expense of a ballooning deficit, but we knew that was coming anyway. It’s nice to see some governments being smart with money they don’t know what to do with yet.
Read: Big chunk of economic stimulus yet to be spent by state, local governments
And as always, check out Recovery.gov for a decent implementation of transparency about the stimulus program.
Photo: Eric Kilby
 By The Weakonomist |
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