Is The Stimulus Working?

Back when I was a reporter for a Kansas daily newspaper, I heard a word of advise that goes something like this: If you have both the liberals and conservatives mad at you, you're probably doing something right. So, maybe I'm about to do something right.

Figures have been released by the White House's Council of Economic Advisers concerning the Economic Impact of the American Recovery Act of 2009. It seems that, to date, the stimulus package has cost us $666.3 billion and has added or saved 2.4 million jobs. As Jeffery H. Anderson of The Weekly Standard has pointed out in a recent editorial, that means that each job cost taxpayers $278,000.

His primary inference is, of course, that liberals are incorrect in their belief that public money pumped into the economy will result in economic recovery and more jobs, or that, in the least, they are incorrect in the belief that these desired results can be accomplish in an economically feasible way. And, in these conclusions, Anderson is standing on pretty stable ground. Money poured into inefficient bank and factory bailouts, and into pork barrel public work projects is generally not money well spent.

However, his secondary inference, that the stimulus money should instead have gone into tax relief, is extremely shaky when one looks at the Seventh Quarterly Report itself. A quick study of the document reveals that a figure approaching half ($288.8 billion) of the stimulus did go to tax relief for individuals and businesses.

Of the remaining money, $126.1 billion went to individual states, $89.5 billion went to unemployed individuals and $161.9 billion went to public works.

If I may comment briefly on these last expenditures: the majority of the money going to the states was most likely spent on public education since this expense constitutes the majority of state budgets. In my own state of Kansas, public education, including public colleges and universities, consumes about 2/3 of the state budget. This was likely money well spent. No matter how you feel about public education, certainly you can agree that further cuts into already diminishing school budgets can do nothing but harm our children's education.

Likewise, the money going to unemployed individuals was needed. I do, however, strongly believe that any long term unemployment relief needs to be linked to training and, possibly at times, to relocation of individuals. A person laid off from an outdated profession and living in an economically depressed area needs to train for a new profession and move to a better area and, if necessary, public investment in these endeavors is, at times, certainly needed.

The $161.9 billion going to public works is a bit more controversial. I fear that way too much of it went to "bridge to nowhere" projects that did little more than soak up public funds and create temporary employment for a few lucky individuals. I understand that an obscenely small amount actually went to highway and bridge construction and repair, which was the great example put forth by politicians trying to sell the stimulus package to the taxpayers. I have long supported public works as long as they are for truly needed projects (such as highways) and go to areas of the country where they are actually needed. In other words, not just to areas represented by powerful senators and congressmen. I have also long supported one massive, and much needed, public work project: the construction of a coast-to-coast smart grid for our electrical needs. This project would save energy, create jobs and, if built correctly, create free or inexpensive internet access for nearly all Americans.