A read-the-whole-thing (aren’t they all?) Investors Business Daily editorial has some hard numbers on the stimulus that outfits like the Associated Press, even though they have reporters covering the news every day, have as far as I can tell rarely if ever published. It provides critical context in light of the President’s proposal to spend $50 billion more on infrastructure.
Its opening paragraph contains a gutsy question (bolds are mine):
The Obama administration’s latest idea for “stimulating” the economy is — you guessed it — more spending. Is this just a campaign ploy, or is the White House ruining the economy on purpose?
… But why in the world do we need another stimulus when we’re not even close to exhausting the funds allocated for the last one?
According to Darrell Issa, ranking member of the House Committee on Oversight and Government Reform, $275 billion of the initial $787 billion cost of that stimulus remains unspent. And of the $512 billion that has been spent, just $18.5 billion — or less than 7% — has been paid out by the Transportation Department, the main government infrastructure provider.
This is strange, since the stimulus was originally sold to us as a way to create “shovel-ready” jobs on infrastructure. Instead, much of the money was drained away for financially strapped states to keep their public unions and Medicaid programs afloat.
Remember that Ohio Senator The Invisible Sherrod Brown rushed back to Washington from his recently deceased mother’s wake (“White House supplied him plane to whisk him back to cast the 60th vote”) so he could be the final vote for this monstrosity that he could not possibly have read because it just had to be done at that moment. After all (figuratively speaking of course), the shovels were virtually ready, and workers only needed authorization to start digging — or so we were told. Uh, not exactly.
Back to the editorial:
Here’s what President Obama said about the stimulus bill he signed into law Feb. 17, 2009:
“Because of this investment, nearly 400,000 men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees, bringing critical broadband connections to businesses and homes in nearly every community in America, upgrading mass transit, building high-speed rail lines that will improve travel and commerce throughout our nation.”
Sounded great at the time, but few, if any, of those things got done. Moreover, since the recession began, federal employment has jumped by 10%, or nearly 200,000 positions, while private-sector employment has plunged 7%, or 7.8 million jobs. So who really benefited from the stimulus? Big Government and its unions.
This is where it would be tempting to agree with New York Times columnist and pretend-macroeconomist Paul Krugman.
Krugman argued in his column yesterday that the stimulus wasn’t big enough. Based on the above, you could argue that he might have a point.
But even if you buy Krugman’s Keynesian crap (which I don’t), here’s the stronger counterpoint: We have an administration which either deliberately lied to us about how it intended to use the funds and its readiness to do so, or which is so breathtakingly incompetent that it allowed tens if not hundreds of billions to be misspent on handouts that should have gone to infrastructure and shovel-ready projects — or both.
Regardless of whether you pick option A or B (or both), the current bunch has proven that it can’t be trusted do what it says it will do with additional funding. I would argue that this is a problem with government in general when such huge amounts of money are involved, almost no matter who is in charge, but this crew has taken malfeasance and/or incompetence to depths previously not seen.
So as much as Paul Krugman might like to perform his next lab experiment on the rest of us by upping the stimulus ante to wartime levels (which is essentially what he has advocated, and which, by the way, Japan basically did during the latter stages of its Lost Decade of the 1990s — and it still didn’t work), or as much as Barack Obama might plead for yet another $50 billion allegedly targeted for infrastructure, the answer shouldn’t be “no.” It should be “heck no.”