Government Spending

Even If Stimulus Works in Theory, It Doesn't Work in Practice

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I've spent a fair amount of time looking at problems with various arguments making the case that the stimulus worked. But in some ways, debates about the effectiveness of Keynesian stimulus spending just don't matter. Because even if stimulus spending works in theory (and there isn't strong evidence to suggest that it does), it still doesn't work in practice. The every day headaches of bureaucracy and government oversight virtually guarantee that stimulus dollars will be spent ineffectively.  

In his new book, "Money Well Spent? The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History," ProPublica reporter Michael Grabell looks at how poor planning, poor management, and layers of red tape ensured that the 2009 stimulus package would go to waste. The New York Post carried an excerpt over the weekend; here's a sample:

Obama billed the stimulus as a program that would "immediately jumpstart job creation" with "shovel-ready" projects to rebuild "our crumbling infrastructure." Such rhetoric conjured New Deal images of blue-collar workers heading out to the heartland with sledgehammers and pickaxes over their shoulders.

Indeed, minutes after the president signed the bill, sparks flew on a rusty Depression-era truss bridge in Tuscumbia, Mo., as construction crews went to work on the nation's first stimulus project.

But other projects were more like the bridge over the Conodoguinet Creek in central Pennsylvania, which Biden had highlighted, but which was delayed to avoid detouring school buses that depended on the bridge for their routes.

The timing of the stimulus was poor to bring about the flood of construction projects everyone expected in the first year. States had to advertise the project to allow contractors to submit bids. They needed to review those bids and sign the contracts.
Then, they had to go back to the US Department of Transportation for the final OK.

The red tape had noble intentions. But it also delayed the program's impact and may have even prevented more workers from being hired. Some projects in public housing, waterworks and home insulation remained paralyzed for six months to a year as short-staffed agencies reviewed Buy American waiver requests and calculated prevailing wages for weatherization work in every county in America.

In Michigan, human services officials estimated that 90% of the homes in line for weatherization work would need a historic preservation review. But as of late fall 2009, the office responsible had only two employees.

Grabell seems to think the stimulus could have been designed in such a way that it would have been much more effective. I'm skeptical.  The combination of administrative challenges and political pressures is just too great.

Getting the money out the door faster would have meant spending in ways that were clearly wasteful, or at least not ideal. At minimum, that's a political disaster. Meanwhile, spending just to spend ultimately creates a greater long-term drag on the economy—not only do we end up adding to a debt that we have to pay down later, but we have nothing (or perhaps negative impact) to show for it. Jugging nearly a trillion dollars of spending on what amounts to an emergency basis is just too complex: As research from Dan Rothschild and Garret Jones of the Mercatus Center suggests, even the money that was spent wasn't tracked very well, often resulted in useless make-work projects, and went to hire people who already had jobs rather than the unemployed. In the end, even President Obama was forced to admit that there's "no such thing as shovel-ready projects."

Link via Jim Pethokoukis. More on the practical reality of stimulus spending in my column, Use the Tiny Tiles, and Other Tales From the Stimulus

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  1. Strictly speaking, these anecdotes don’t argue against stimulus spending per se, but argue that stimulus spending is not effective in a governing context where the spending is subordinated to trivial competing interests like “historic preservation reviews” or “prevailing wage laws”.

    Maybe FDR was able to undertake more effective stimulus spending because if he said they were going to build the Hoover Dam then they were just going to fucking BUILD IT, and not spending years studying environmental impacts or considering the potential damage to upstream archaeological sites or calculating prevailing wages and other nonsense.

    1. Here is the problem with spending government money. You have two choices. You can spend it really quick. But when you do that you run the risk of it being ripped off. And more importantly, when you spend the money quickly you don’t have time to do things like competitive bidding and really good record keeping. So you can’t prove the money was spent wisely even if it was. You can not spend it quickly. And you can take your time and properly bid out all of the contracts and track every penny and make sure that it is all spent as widely as possible and fully documented. But when you do that nothing gets done for years.

      Yeah, FDR spent and built things quickly. But those projects were done with contracting practices and level of graft and corruption that would send you to prison today.

      You would think liberals, being generally creatures of government, would understand that. And thus not act shocked when the Hoover Dam can’t be built as quickly today or if it is, the project ends with everyone going to jail.

    2. There were 112 deaths associated with the construction of the dam.[68] Included in that total was J. G. Tierney, a surveyor who drowned on December 20, 1922, while looking for an ideal spot for the dam. He is generally counted as the first man to die in the construction of Hoover Dam. His son, Patrick W. Tierney, was the last man to die working on the dam’s construction, 13 years to the day later.[68]

      Ninety-six of the deaths occurred during construction at the site.[68] Of the 112 fatalities, 91 were Six Companies employees, three were BOR employees, and one was a visitor to the site, with the remainder employees of various contractors not part of Six Companies.[69]

      Not included in the official fatalities number were deaths that were recorded as pneumonia. Workers alleged that this diagnosis was a cover for death from carbon monoxide poisoning, brought on by the use of gasoline-fueled vehicles in the diversion tunnels, and a classification used by Six Companies to avoid paying compensation claims.[70] The site’s diversion tunnels frequently reached 140 ?F (60 ?C), enveloped in thick plumes of vehicle exhaust gases.[71] A total of 42 workers were recorded as having died from pneumonia; none were listed as having died from carbon monoxide poisoning. No deaths of non-workers from pneumonia were recorded in Boulder City during the construction period.[70]
      http://en.wikipedia.org/wiki/Hoover_Dam
      _

      over 100 killed in 5 years. no modern construction company would expose workers to such hazards.

      1. It’s not a real jobs program unless we’re doing wanton damage to people and the environment in the process.

        –Republitarians for the Keystone Pipeline As Jobs Program

        1. Right on cue. Well done, sir.

          1. Pulled another “fact” straight out of his ass.

            Tony never disappoint.

        2. Tony, the environmentalists themselves don’t actually believe the pipeline is dangerous (in the sense that the line itself will fail).

          They are quite open about the fact that what they’re really hoping to achieve is preventing the Canadian tar sands oil from being burned.

          This makes them (and you) morons, because one way or the other the tar sands oil is going to be transported, sold, and burned. Whether a pipeline is built in the US or not.

          1. fluffy – the pipeline already exists to chicago where this low quality tar is sold at a discount.

          2. I’ll accept that completely as long as we agree that government welfare for oil companies isn’t the same thing as a jobs program. I’m just curious why you guys think the only time government can be activist in creating jobs is when it’s for one specific industry.

            1. If you’re gonna say that it’s not a “jobs program” then subsidies to solyndra and that battery company weren’t “jobs programs” either. But you’re a disingenuous kinda guy so I’m sure you’ll disagree with me.

            2. What welfare? Be specific. Allowing two parties to agree to a contract to build a pipeline to transport oil is not “Welfare,” nor is allowing a company to deduct normal business expenses from their taxable income.

              1. What about eminent domain? Not to mention the century of subsidies lavished on fosssil fuels. There’s nothing free market about energy in this world. I expect Republicans to fudge that reality, but you guys aren’t required to be the utter oil whores you constantly are, so I don’t get it.

        3. And without the pipeline, the oil will be transported on Uncle Warren Buffett’s trains, which is much more dangerous to the environment.

      2. Re: O3,

        over 100 killed in 5 years. no modern construction company would expose workers to such hazards.

        No construction company did even back then, as experienced construction workers cost money. The Hoover Dam was a G-O-V-E-R-N-M-E-N-T project.

        1. Wait, you mean inexperienced welfare recipients may be worse at their jobs than experienced (and already employed) people?

          UNPOSSIBLE!

        2. On January 10, 1931, the Bureau made the bid documents available to interested parties, at five dollars a copy. The government was to provide the materials; but the contractor was to prepare the site and build the dam. The dam was described in minute detail, covering 100 pages of text and 76 drawings. A $2 million bid bond was to accompany each bid; the winner would have to post a $5 million performance bond. The contractor had seven years to build the dam, or penalties would ensue.[22]

          The Wattis Brothers, heads of the Utah Construction Company, were interested in bidding on the project, but lacked the money for the performance bond. They lacked sufficient resources even in combination with their longtime partners, Morrison-Knudsen, which employed the nation’s leading dam builder, Frank Crowe. They formed a joint venture to bid for the project with Pacific Bridge Company of Portland, Oregon; Henry J. Kaiser & W. A. Bechtel Company of San Francisco; MacDonald & Kahn Ltd. of Los Angeles; and the J.F. Shea Company of Portland, Oregon.[23] The joint venture was called Six Companies, Inc.?Bechtel and Kaiser were considered one company for purposes of the name. The name was descriptive and was an inside joke among the San Franciscans in the bid?”Six Companies” was a Chinese benevolent association in the city.[24] There were three valid bids, and Six Companies’ bid of $48,890,955 was the lowest, within $24,000 of the confidential government estimate of what the dam would cost to build, and five million dollars less than the next lowest bid.[25]
          http://en.wikipedia.org/wiki/Hoover_Dam
          _

          radio memes are poar substitutes for facts

          1. God you are stupid. You are making my point. You can’t just spend this money and “stimulate” the economy over night unless you are willing to live with things like that. Any sense of justice or fairness pretty much prevents government infrastructure programs from functioning as effective short term stimulus.

            Thanks for showing how worthless your entire side’s economic ideas actually are.

            1. So what’s your excuse? Billionaires’ taxes not low enough yet to prove your economic ideas right?

              1. Tell us again about the magical number “39.6”.

            2. Take it up w fluffy john. I responded to his post. >threaded comments, how do it work?

        3. You hire a lot of grunts for a project like that. And grunts were cheap and plentiful in the Great Depression. I don’t think that private construction sites were a whole lot safer at the time.

          1. Only 5 people died building the Empire State Building. No one died building the Chrysler Building. I’m going to have to disagree with you on this.

            1. Well, who knows? The dam was a much bigger and inherently more dangerous project. How many people worked on the Empire state building compared to the Hoover Dam?

              I really don’t think it is controversial to say that there was less concern for worker safety back then, both in private and public sector.

              1. True, but I think the other side of the coin is when the private sector does it, and by it I mean a project not funded or endorsed by the goverment, they are, ideally, held to a higher standard. When companies start doing pet projects of the public sector the corruption and inefficiencies in the public sector spill over into the private sector. I am taking a postgrad constructin management class and it is interesting to hear how my instructor, a former GM for many construction firms, hated working goverment projects for a variety of reasons.

              2. Wow. Point disproven, you fall back on “well, who knows? Extenuating circumstances!! I was talking about smoething else!!!” Jesus christ, man, just admit you were wrong.

          2. Re: Zeb,

            You hire a lot of grunts for a project like that.

            You don’t hire useless grunts. The Hoover Dam project was made to pool and hire the unskilled and unemployed.

            I don’t think that private construction sites were a whole lot safer at the time.

            You don’t think at all – that’s the problem. Downtimes are EXPENSIVE, experienced workers are expensive EVEN when unemployment is high.

            Look at the history of most government projects and you will see the most accidents, the most deaths and the most coverups. Private enterprise is NOT interested in losing money, and if that means keeping accidents LOW, then that is what will happen.

            I worked at a cement plant that was founded in 1906. I received the 100th anniversary commemorative book, and there are pictures of the front lawn circa 1930 with a sign that says “380 days without an accident.” I can scan it and send it to you. The point is that private companies even back then considered people as assets. Government considered them NUMBERS, which is why FDR had no qualms about picking fights with Germany and Japan to then send 250,000 Americans to their deaths.

            1. “Private enterprise is NOT interested in losing money, and if that means keeping accidents LOW, then that is what will happen.”
              _

              except when its covered up to avoid liability

              1. You’re confusing the accident with the coverup. One is not the same as the other. You can try to minimize accidents and still try to cover up the ones that do happen, derpy.

              2. Re: O3,

                except when its covered up to avoid liability

                You must think enterprises are magicians, triple asshole, to cover up an accident or a death.

                You have NO idea of waht you’re talking about. That explains why you copy-paste wikipedia posts like an 8th grader.

            2. “You don’t think at all – that’s the problem.”

              Being an asshole for no reason helps. That fucking shit is so boring and predictable “heheh, you don’t think, gosh I’m clever”. I think you are an interesting and thoughtful person for the most part, but for some reason you have decided to be a complete fucking asshole every time you disagree with anyone just a little bit. Get over yourself. Your personal fucking anecdote doesn’t prove shit. There have also been serious industrial accidents in privately run industries which led to many deaths. So what? I agree with you that government will inevitably be less considerate of the value of individual people. I may have overestimated how mcuh more dangerous workplaces were in the past than now. If you have some information for me that might straighten me out, please, tell me. You don’t have to be a fucking prick all the time.

              1. Re: Zeb,

                Being an asshole for no reason helps.

                Being a boob for no reason doesn’t.

                There have also been serious industrial accidents in privately run industries which led to many deaths.

                Yes, there have. That does not translate to a sweeping assertion that private industry was NOT interested in avoiding accidents back in the 30’s [“I don’t think that private construction sites were a whole lot safer at the time”], because that is not true. I can make a bet that they were safer than anything the government ever conjured up, especially since government enjoys the backing of legal plunder, whereas private enterprises do NOT.

                1. “That does not translate to a sweeping assertion that private industry was NOT interested in avoiding accidents”

                  Good thing I didn’t make that assertion.

                  1. Re: Zeb,

                    yes, you did:

                    “I don’t think that private construction sites were a whole lot safer at the time”

                    That means a) all private construction sites and b) you don’t believe they were safer than the government’s. I am not putting you to task for nothing, Zeb.

      3. They would if the government was willing to look the other way as I’m sure happened with the building of the dam.

    3. Prevailing wage laws are diabolical bullshit. No non-union company should be forced to pay union wages on only *certain* jobs.

      1. Prevailing wage jobs just mean the company can charge the government more for the work, and pass some of that on to the workers. It’s not a disadvantage for the company, it’s a disadvantage to the uninvolved third party that actually has to pay for it (aka the taxpayer).

    4. looking for the bilover?—datebi*cO’m— is a site for bisexual and bicurious singles and friends.

  2. “no such thing as shovel-ready projects.”

    Except the one that wasn’t asking for money but just wanted permission to build across the border.

  3. There are always two problems with politicians implementing their promises efficiently and effectively.

    1. The competence of the politician to accomplish what they say they want to accomplish.

    2. The real intention of the politician making the promise.

    Without giving Obama any credit for competence whatsoever, Obama’s biggest problem is the second of the above.

  4. Wait…hear that? It’s an Army of Strawmen approaching from the East. Bar the gate! Man the ramparts!

  5. Grabell seems to think the stimulus could have been designed in such a way that it would have been much more effective. I’m skeptical. The combination of administrative challenges and political pressures is just too great.

    It wouldn’t have worked even if greater efforts were spent on assuring the money was allocated “wisely,” for the very real reason that bureaucrats cannot read minds and know what people would value greatly.

    Even if some idiots believe the government can know what people want through interviews, polling or voting, the real fact is that people show their preferences at the very moment of exchange, not sometime later or before. Whatever people wish to have is not evidence of their true preferences when they have to make a decision at the margin, that is at the moment of truth: At the moment of exchange.

    This is the reason bureaucrats cannot manage the economy, simply because they cannot presume to know the future or read minds, and people are fickle. This is a fact of life, and there’s nothing anybody can do about it as people ain’t robots, no matter what persons like Tiny want to believe.

    1. Nothing can be known about people’s preferences until cash changes hands? What if you’re poor and hungry, but have no cash? Is your demand for food not real?

      1. You need to learn the meaning of “marginal utility.”

        1. As in, if I’m starving and haven’t eaten in a day, but haven’t had anything to drink in two days, I may prefer to spend money on water rather than food.

          You can’t know what I want until I make a decision to purchase or obtain a good.

          1. Tony left “starving grandmothers” out of his argument. Must be an off-day for him.

          2. Actually I know that you need water and food at regular intervals and I know that whether you have a single dime in your pocket or not.

            1. Actually I know that you need water and food at regular intervals and I know that whether you have a single dime in your pocket or not.

              Cry me a river. There is no such thing as a “need” except in the context of a desired end. You’re assuming that the person here desires to eat or otherwise sustain themselves, which is generally a safe assumption but begs the question of “What are they doing to meet their desired end?”.

              1. Yes I think it’s safe to assume that most people have a desired end of not starving to death, even in the total absence of market outcomes spelling it out for us.

                1. ITT: Tony has never met junkies or anorexics. Or anorexic junkies.

                  Really now, if you’re going to starve to death in this country you have to either be trying at it or be literally unable to care for yourself as a consequence of youth or invalidity. Restricting a safety net to the latter would likely upset only the ancaps, and the market could very well compensate as effectively as the government in its absence.

                2. But there is no absence of market outcomes spelling it out for us. People keep buying food and drinks. This is a pretty pathetic strawman even by your standards.

      2. Yes Tony because the world is just that simple. One simple choice. And knowing that choice means knowing them all.

        The government cannot provide for the people’s choices. IF it could, communism would have worked. This argument was settled in 1989. Your side is just too stupid to accept it.

        1. The government cannot provide for the people’s choices. IF it could, communism would have worked.

          No, it wouldn’t have. The people who rise to leadership in a society in which the government has control of everything will always be the most ruthless and self-interested. Communist leaders had and have no interest in providing the best possible life for their subjects. For some reason, everyone seems to assume communists have good intentions. History puts the lie to that assumption.

          1. Well, I think that most communists probably do/did have good intentions (however foolish). It’s just the people who inevitably end up in charge are brutal awful people.

            1. Communists, and other statists, start their political thinking by denying the political dignity of most of the population. That’s not well-intentioned.

              1. Well, that assumes that they understand the consequences of their intentions. I never said that their intentions were well reasoned or smart.

                1. Well, I guess if you think that most communists are so devoid of self-examination that they don’t realize that they start by thinking that they should be able to run the totality of other people’s lives, then I can see how you arrived at your conclusion.

          2. They didn’t intend to run their economy into the ground, especially agriculture, but that’s exactly what happened. Even the most brutal dictators have a better track record. The failure of communism has nothing to do with intentions or lack thereof; that stupid shit just doesn’t work.

        2. Well I kept it simple deliberately. The point is that people have needs that are knowable apart from the market mechanism. If the free market adequately provided for those needs, we wouldn’t have anything to talk about. But it doesn’t. Some people have no money but still need to eat. OM seems to believe that there is no evidence those people need to eat, since they aren’t spending any money on it. I’ve kept the example simple because it more clearly illustrates the ludicrousness of believing the market mechanism to be a panacea.

          1. Sure. But explain why it requires a multi trillion dollar government and more debt that all of previous civilization combined to provide for such? If government consisted of only providing subsistence food for those who needed it, no one on here would complain.

            Where you fail Tony is not in your desire to feed people. You fail in thinking that requires an 200K a year SEIU bureaucrats to provide.

            1. In other words, you’d have a clearer understanding of the world if only you stopped consuming bullshit Republican buzzwords as if they were factual.

              1. Way not avoid the subject Tony. You can’t get from “everyone should eat” to “we need a government that consumes 40% of our wealth”.

                1. Well, I would include among basic needs access to healthcare, and that’s a big chunk of a modern national budget. Besides that (which we disagree about) and defense, what do you want to cut? Janitors and nurses I don’t think represent a significant factor.

                  1. Now the truth comes out. You are not about feeding people. You are about controlling them and making sure everyone has the same sized pony.

                    We go back to my original point. The government cannot provide all of that. If it could, communism would have worked. But it didn’t. It failed miserably, despite organizing entire societies to provide everyone with the “needs” you describe.

                    1. You’re being stupid. Nobody is advocating communism (though libertarianism has much more in common with it than progressivism–not that you’d know that given your education at Glenn Beck U).

                      If by failed miserably you mean every modern country on earth providing universal healthcare, and all of them more cheaply than the comparatively private market version in the US, fine.

                      I don’t want government to ensure that everyone’s equally wealthy. That is a straw man. I just think it should ensure that basic needs are met so that people are actually free to participate in commerce and the promises of the market can bear more fruit. Half the country is one health crisis away from bankruptcy. How is that an optimal system?

                    2. “If by failed miserably you mean every modern country on earth providing universal healthcare, and all of them more cheaply than the comparatively private market version in the US, fine.”

                      You mean every country on earth facing bankruptcy. Tony, there isn’t a single country that has followed that model that isn’t facing bankruptcy.

                      . I just think it should ensure that basic needs are met so that people are actually free to participate in commerce and the promises of the market can bear more fruit.

                      Which all previous evidence indicates that the government cannot do that. If it could, communism would have succeeded or Europe wouldn’t be bankrupt. Your ideas have bankrupted the wealthiest civilization in history.

                      Face it tony, everything you believe in is a failure and is headed for the scrapheap of history.

                    3. the comparatively private market version in the US, fine

                      This word “private” I don’t think it means what you think it means.

                  2. Besides that (which we disagree about) and defense, what do you want to cut?

                    All of it. Take 20% off the top of everything. Every last fucking program, department, agency and other subdivision gets a cut. Then we’ll talk about what gets to stay and what gets to die a hasty, unmourned death.

                  3. Who exactly doesn’t have access to healthcare, right now, with PPACA not fully implemented yet?

          2. Re: Tiny,

            The point is that people have needs that are knowable apart from the market mechanism.

            You only think there is because you’re guessing. But you can’t read minds, Tiny.

            If the free market adequately provided for those needs, we wouldn’t have anything to talk about.

            “Adequately”? Ok, so you still show your panache for question begging assetions.

            Some people have no money but still need to eat.

            I have no money in my pocket right now, but I have food.

            OM seems to believe that there is no evidence those people need to eat,

            You’re such a goddamned liar, Tiny.

            since they aren’t spending any money on it.

            Leave it to the economics ignoramus and direct result of the Amerikan Pulbic Skool Seistem to confuse cash and exchange. People DO eat in this country, Tiny, and they DO show their preference by going to food banks or shelters (swallowing their pride if you will,) and the managers of those places show their preference: the good feeling they get from helping someone. That’s an exchange, Tiny, whether you want to believe it or not.

            I’ve kept the example simple because it more clearly illustrates the ludicrousness of believing the market mechanism to be a panacea.

            What you ahve been able to illustrate is your lack of knowledge and understanding, i.e. you’re an ignoramus and a boob.

            1. But you can’t read minds

              In this instance, I can. I can safely assume you need food and water, and I can know that without a single dollar changing hands.

              We could deal with the issue of people having basic needs by hoping there will be enough charity to go around, or we could do it in a more efficient and guaranteed way. It just depends on whether we actually care about people’s basic needs being met.

              For some reason taxpayer-funded police and courts are exempt from the requirements of the magical market–those things need to be paid for collectively, for some reason. At the bottom of all of this is a simple moral calculation, and yours is faulty. It says that the collective ought to pay to protect the luxuries of the rich, but not the needs of the poor.

              To your credit you’ll probably evade this issue by spouting some macho bullshit about how you don’t need the collective to pay for your property rights protection because you own guns.

              1. We could deal with the issue of people having basic needs by hoping there will be enough charity to go around, or we could do it in a more less efficient and guaranteed way.

              2. Re: Tiny,

                In this instance, I can. I can safely assume you need food and water,

                You have a problem with concepts, Tiny – assuming is not the same as knowing.

                For some reason taxpayer-funded police and courts are exempt from the requirements of the magical market–those things need to be paid for collectively, for some reason.

                No, they don’t. They’re collectively paid for the same reason the mob collected “protection money” from store owners – because it’s a racket. May be a legal racket, a government-managed racket, but a racket nonetheless.

                To your credit you’ll probably evade this issue by spouting some macho bullshit about how you don’t need the collective to pay for your property rights protection because you own guns.

                You are welcome to try your theory by attempting to burglarize my home. Go ahead – I dare you.

              3. I’m gonna brake it down in terms you might be able to understand. First of all, there are plenty of ancaps and anarchists here that you should know by now that they CAN envision cops and courts that aren’t paid by the collective.

                But we do pay for those collectively, so for now it’s a moot point. The thing that you can’t seem to wrap your tiny little brain around is that those cops and courts are paid for by ostensibly everyone for ostensibly everyone’s benefit. That is not even remotely close to the same thing as forcing one section of the population to take care of the needs of another section of the population.

                1. Sorry, there is no fundamental moral difference from collectively paying for cops and courts and doing so for healthcare and even direct welfare payments. Property protection only benefits those with property, after all. And if capitalism works how it’s supposed to, then there’s always risk, right? So anyone, even a rich person, would benefit from a social safety net, because there’s always the chance he could need it.

                  1. Sorry, there is no fundamental moral difference from collectively paying for cops and courts and doing so for healthcare and even direct welfare payments.

                    Cops and courts are a requirement for a society based on the rule of law and individual liberty. Free healthcare and direct welfare payments are an extravagance.

                    Property protection only benefits those with property, after all.

                    Property protection also benefits the those without property who choose to work and acquire property they didn’t have before. They get to keep it.

                    And if capitalism works how it’s supposed to, then there’s always risk, right?

                    Yes, yes there is. But there is risk in everything you do everyday that the government is, and always will be, powerless to protect you from.

                    So anyone, even a rich person, would benefit from a social safety net, because there’s always the chance he could need it.

                    Theoretically, sure, however when the social safety net ends up bankrupting the country, and thus destroying the ability of the government to provide said safety net, everyone loses.

          3. Unfortunately, Tony, knowing that people need to eat tells you virtually nothing about what you would need to know to use the state to feed them.

            The closest you can come is handing out direct transfer payments so that people can buy food. That works pretty well – at least, it works well at getting people food that they want to eat (it has negative side effects elsewhere, but I’ll try to keep it simple too).

            If you tried to use the state to directly feed people, knowing that one data point tells you virtually nothing you would need to know: What food? In what amounts? Where? When? Prepared by whom? And so forth.

            All of those data points can really ONLY be communicated adequately (or even inadequately) by a price system. There is absolutely no way to have them communicated even at a basic and inadequate level in any other way. The information problem is too great; and the perishability of the information is simply too high.

            1. Oh I think it’s certainly better on every count for there simply to be direct payments, allowing recipients to choose their own food. The system we have now works pretty well (and apart from ensuring access to food, provides one of the most efficient forms of economic stimulus).

              1. Direct payments would simply increase inflation. Handing money out does nothing to actually provide people with food.

              2. But then that means your original argument was wrong.

                You actually CAN’T know anything useful without an economic exchange.

                You CAN’T know how to proceed with the market mechanism, merely by knowing that people need food.

                You’re piggybacking on the very market mechanism you say you don’t need, by providing the poor with currency or a currency substitute like EBT.

                In fact, using that as your method, you’re changing what you “know” from “I know people need food” to “I know people need to be able to participate in economic exchanges” which is kinda a whole ‘nother thing.

                1. Well that only works out because food is abundantly available. When we talk about other things, like dams or basic scientific research, it’s less clear there is market demand, but public demand nonetheless.

                  1. Meet the clearness of market demand.

                    Dams – as in for electricity? Electricity is a good in demand, is it not?

                    Scientific research – like that which goes on in corporate laboratories everyday to provide consumers with better drugs, more poerful personal technology, better cars, etc., etc.?

              3. Yes it works well, for the reason Fluffy just (tried) to explain to you. Also, let’s be real here. People would not be starving without food subsidies in this country. What the subsidies do is allow people to have more and better food than they would otherwise have, and allow them to spend money on other things they want or need.

      3. Nothing can be known about people’s preferences until cash changes hands?

        Pretty much. Until people possess all of the information that would lead them to make a decision (not all of the information relevant to that decision), their claims of how they would act are theoretical. I could rant all I want about how I would never fuck a fatty, but at the end of the day, if I’m fucking fatties, my initial assessment was wrong.

        What if you’re poor and hungry, but have no cash? Is your demand for food not real?

        I have a real demand for a yacht and fine champagne, but that’s sort of the issue: People have nigh-infinite demand, but goods (and time!) are scarce.

        1. If resources are scarce, then I think it would be prudent to ensure that nobody’s going hungry before we spend them on building yachts for rich people. That the rich person has the luxury of affording a yacht doesn’t make his demand any more fundamentally important. The outcome of supply and demand is something that can be described as efficient, but it is not something that represents an optimum state of distribution if you consider the actual needs of human beings.

          1. I’m always lurking in the shadows!

          2. Re: Tiny,

            If resources are scarce, then I think it would be prudent to ensure that nobody’s going hungry before we spend them on building yachts for rich people.

            The idiot here believes we can’t do both.

            That the rich person has the luxury of affording a yacht doesn’t make his demand any more fundamentally important.

            Not “fundamentally important”? It is important to the persons building and selling the yatch. It may not be important for YOU but nobody cares about YOU, Tiny.

            The outcome of supply and demand is something that can be described as efficient, but it is not something that represents an optimum state of distribution if you consider the actual needs of human beings.

            Supply and demand SHOW the actual needs of human beings, you stupid imbecile, otherwise there would be NO demand.

            You’re an absolute boob, Tiny. Stop embarrassing yourself, I’m starting to feel bad for you.

            1. One of these days you’ll realize that mindless insults don’t make up for your lack of insight, but that they do tell the rest of us that you’re trying to overcompensate.

              All you’re doing is worshiping market outcomes as some kind of revealed truth. Sure the market mechanism is efficient (when working properly), but that doesn’t mean it provides everything useful under the sun. You’re just a religious zealot, in that you think the simpler things are the more true they are.

              1. Re: Tiny,

                One of these days you’ll realize that mindless insults don’t make up for your lack of insight,

                One of these days you will realize that the reason people insult you is precisely because of your lack of insight and your arrogance.

                All you’re doing is worshiping market outcomes as some kind of revealed truth.

                All you’re doing is obviating the reality that is people’s choices.

                Sure the market mechanism is efficient (when working properly), but that doesn’t mean it provides everything useful under the sun.

                Define “useful”

                You still don’t get it, you idiot: What YOU think is “useful” is not ipso facto useful to everybody else. You aren’t God and you’re certainly not clever enough to know what all and every single person find “useful.”

                1. See, I told you. Marginal Utility Tony, go look it up. Then actually read it until you can comprehend what it means.

                  1. I understand it perfectly well, I also know that the world is too complicated to be explained fully with Econ 101 textbook knowledge.

                2. I get it, OM, I really do. You, having not had a real education in philosophy, have latched onto something that seems like the deepest possible insight, when in reality it’s just tautology masquerading as such.

                  Food, shelter, clothing, healthcare, police–these things can be reasonably assumed to be useful to all human beings whether they can afford them or not.

          3. The outcome of supply and demand is something that can be described as efficient, but it is not something that represents an optimum state of distribution if you consider the actual needs of human beings.

            Shorter Tony: I know what you need better than you do.

            1. Shorter Tony: I know what you need better than you do.

              Well he is is the prototypical liberal/statist/fascist/communist.

              1. You don’t understand what at least 5 of the words in that sentence mean.

                1. This from the guy that has already shown he lacks any grasp of the concept of demand. Right-o, chap.

                2. Well you are proto-typical, as in perfectly representative of the first to swallow your ideology.
                  Liberal (modern sense, not classical) – all problems in a society, real or percieved, can be solved with government intervention and the establishment of bureaucratic inststutions that wield extra-legal power over the lives of others.
                  Statist – you believe with all your heart that the state is perfectly justified to control the lives and choices of those it rules over for the good of the entire polity.
                  Fascist – A system of socialistic organization of economic power in a country intended to accrue wealth and prestige to the state, at the expense of the individual.
                  Communist – see Fascist, except replace supra-national with national.

          4. Couldn’t have said it better myself, Tony.

          5. And there we get to the gist of your posts: Wealth Envy and Class Warfare.

            Nevermind that if you keep rich people from what you consider luxuries you’re hurting all of the little people that provide those goods and services. But then again, I think that is always your goal.

            1. You really think accusing people of petty psychological issues is gonna sustain record low tax rates indefinitely? Pretty weak sauce, that.

              It’s simply an inescapable fact that small-government libertarianism advocates collective action to pay for protecting the luxuries of the rich while ignoring the needs of the poor. It’s a fundamental moral conundrum and nobody’s ever sufficiently explained it, except to engage in mindless robotic GOP parroting psychobabble.

              1. Tony, libertarians generally don’t have a problem with any kind of collective action, as long as “collective” is not conflated with “coercive.”

                1. Yeah I know–you’re against government using coercive force except in those instances where it’s actually threatening to shoot people in the face.

          6. The outcome of supply and demand is something that can be described as efficient, but it is not something that represents an optimum state of distribution if you consider the actual needs of human beings.

            Life is not fair. Government does not exist to make it so.

      4. I wouldn’t say “nothing”. But there is an enormous difference between expressed preferences — what people say they want — and revealed preferences — what they’re actually willing to pay or work for, when push comes to shove.

        Someone saying, “I’m hungry,” and sticking their hand out is a data point. That same person then spending what money they do have on cigarettes, beer, and XBox games is another data point. I’d argue that the latter data point is more compelling than the former.

  6. Re: Tiny,

    Nothing can be known about people’s preferences until cash changes hands?

    Leave it to the economics ignoramus, the direct and woeful result of the Amerikan Pulbic Skool Seistem to equivocate by thinking that exchange means cash.

    What if you’re poor and hungry, but have no cash? Is your demand for food not real?

    Again, leave it to the economics ignoramus, the direct result of the Amerikan Pulbic Skool Seistem to think that economics means cash.

    I’ve seen lots of people with “Will Work For Food” signs. Aren’t they being sincere about it, Tiny? Do you think they will not show their preference (how much work for how much food) once someone offers them a job?

    Why do you keep insisting on showcasing your stoopidity, sockpuppet?

    1. Tony always confuses wealth with capital. As do most people, I’ve found.

      1. Re: anon,

        Tony always confuses wealth with capital. As do most people, I’ve found.

        Agreed, but that is not the only issue with Tiny. For some reason, he has an aversion to the idea that people bullshit everybody else all the time except when they exchange, that is, at the moment of truth. Well, sorry Tiny, but that is what happens. Even voting is not a true show of preference as people stake nothing when voting, which is why the progressively worse person gets elected every time.

  7. In Michigan, human services officials estimated that 90% of the homes in line for weatherization work would need a historic preservation review.

    And then what? The home would have to be insulated with “period appropriate” materials, like 1937 editions of the Detroit Free Press, or chicken feathers?

  8. I would like to thank you for the Starcraft reference.

    I do have some experience with how States spent stimulus money (I worked briefly for a state government agency), and ineffective spending is largely the fault of the legislators, not the bureaucrats.

    Our particular ARRA projects involved hiring contractors (writing up contracts specifically for each project), assembling project effectiveness projections, and coordinating with state and federal agencies–all with full transparency.

    Such an undertaking takes a considerable amount of time (obviously, you wouldn’t want to hire a project manager who rushes through such things, either in the public or private sector). Congress (and, coincidentally, many Federal Agencies) has completely unrealistic expectations for how fast the states can move this money effectively.

    Now, would these projects stimulate the economy? Yes, but not in the time frame that talking heads, bloggers, and politicos seem to expect. Things like building up infrastructure and managing construction and retrofit projects take time and skill to accomplish, and the benefits of said projects might not be felt for years.

    Are those projects worth it? I would say “yes”.

    1. How is the new version of Star Craft that came out last year?

      1. I was addicted to it for a good while. It was extremely fun, and I wholeheartedly recommend it to RTS or science fiction fans.

        1. I loved the original. But sometimes the sequels don’t live up. Thanks.

      2. It’s great, though they’re stretching out the single player over 3 x-packs which is annoying. It’s mostly a graphical and tuning update on the original with a more in-depth (and arguably hackneyed) storyline, but the Zerg experience leaves a lot to be desired. They’re supposed to get a big boost with the expansion pack, though.

    2. Note: I didn’t mention the state agency or even the state I worked in to respect my coworkers’ privacy. This is my comment, not theirs.

    3. Are those projects worth it? I would say “yes”.

      Please look up “opportunity costs”. Thank you, that is all.

      1. Meh. It’s great to be all pure and stuff. But the fact is that government is going to be providing the major infrastructure like roads, bridges and such. It has to be done at some point, and as much as we might wish it otherwise, bridges and highways are getting built by the government. So I have to agree with the comment that, practically speaking, some government funded infrastructure projects are, in some sense, worth it.

        1. some government funded infrastructure projects are, in some sense, worth it

          And some Hollywood starlets are smart. And some politicians are honest. And some dead fish don’t smell bad.

          1. Hey, I’m all for intellectual consistency and such, but one still has to at least acknowledge reality at some point. Even if the government shouldn’t be doing major construction projects, it is still worth discussing which ones might be better to do than others.

    4. But they aren’t always worth it Matty. We have real world examples of when large public projects end up becoming net drains. Just google Japan+White Elephant Projects. There are some large scale projects that have been beneficial, such as the highway system, but by and large I am very skeptical of goverment projects.

  9. Are those projects worth it? I would say “yes”.

    I’m sure spending other people’s money is fun.

  10. Just as an aside, I don’t think Suderman gets enough credit for using the images he does.

    His ability to pick the perfect image to go with his article is amazing. Some people are better at it than others, Suderman’s the best.

    1. You have something brown on your nose there.

      1. “Besotted commenter Ken Shultz”

  11. “Even if stimulus works in theory, it doesn’t work in practice.”

    Same can be said about Bush/Obama/Hillary nation-building.

    1. KISS

  12. The point, I think, is that Keynesianism and stimulus assumes/relies on a hypercompetent government that simply does not exit. The Top. Men. fallacy.

    Its pointless to argue about whether it could work in theory, just like its pointless to argue about whether Communism could work in theory. We know from experience that it does not, and we know why. The “why” boils down to something that cannot be changed: human nature.

    1. Shorter RC: don’t give people lots of power because people suck.

      Or is that shorter libertarianism?

      1. That’s shorter reality T.

      2. “Leave me alone!”

    2. The point, I think, is that Keynesianism and stimulus assumes/relies on a hypercompetent government that simply does not exist.

      It relies on perfect knowledge, which is unattainable by any group of people let alone an individual. It’s impossible for anyone to know everything.

      Which is pretty much why Capitalism works so well.

      1. I’m not smart enough to … (mumble, mumble, something, something) … many decision makers … (mumble, mumble) …

  13. “Grabell seems to think the stimulus could have been designed in such a way that it would have been much more effective.”

    I would agree. The key word is: more.

  14. APRIL 2, 2011 12:41PM
    The perfect “stimulus” – Dig huge holes, then fill ’em up

    Last fall (2010) I wrote a newspaper column describing by far the best stimulus plan available — dig gigantic holes in the ground, and then fill ’em back up. This ludicrous proposal, insane as it is, works far better than the Obama/Congress stimulus packages. And that says it all about Obamanomics.

    Since folks are starting to look at the paucity of results from our recent stimulus packages, I thought I’d (re)offer a better future choice, in case we didn’t learn from our recent mistakes in this matter.

    Seriously, hole digging is better! I detail why such is indeed the case in a reprint of my wry article below.

    http://tinyurl.com/ydzm8lt

    SAN DIEGO DAILY TRANSCRIPT

    Save the Economy ? Dig and Refill Holes

    By Richard Rider, Chairman, San Diego Tax Fighters

    Many folks look back fondly on FDR’s efforts to pull us out of the Great Depression. Killjoys point out that FDR’s deeply flawed policies didn’t work ? we had the longest, most sustained depression since perhaps the Renaissance.

    At least some solace is taken from the widespread assumption that WWII finally bailed us out. Perhaps some see today’s overseas adventures as serving a similar purpose in this economic tailspin.

    But we don’t need no new stinkin’ wars to “stimulate” the economy a la WWII. I have a FAR better plan.

    To return to full employment and a prosperous nation, let’s spend billions, nay, TRILLIONS to dig gigantic holes in the ground, and then simply refill them.

    Offhand I can think of a dozen advantages of my plan vs. a WWII-type economic recovery strategy. Actually, my plan provides most of these advantages over all the other proposed stimulus and bailout packages as well. Consider:

    1. We don’t have to kill or maim throngs of people on “their” side ? or ours.

    2. We’d be destroying no property. Properly done, in a scant few years, these filled-in holes would be indistinguishable from the surrounding landscape.

    3. In WWII the GI’s got paid a pittance. But my federally funded hole digging would be subject to the generosity of the Davis-Bacon Act ? paying unskilled laborers $35 an hour in wages and benefits. Talk about stimulating!

    4. In contrast to all the other suggested Keynesian spending, these projects are extremely green, using almost no petroleum and wasting few resources ? because we would use only shovels in an effort to employ a maximum number of workers.

    5. Unlike most such public works efforts, the administrative overhead for my colossal projects would be minimal at most. For you see, nobody really cares when the work is completed, or even IF it is completed. Just give everyone a shovel, and outline the hole to be dug. Equal pay for all (though not perhaps for equal work). Indeed, the project could make work participation optional, except for the fact that the ornery voters and greedy taxpayers might feel that it’s somehow wrong to pay people for useless work not performed (go figure).

    6. There would be no lawsuits for failed infrastructure. No concern over shoddy workmanship, or using defective components.

    7. The usually inevitable public works cost overruns could be self-corrected by periodically adjusting how deep the hole(s) should be.

    8. Since the holes would be dug far from busy roads, no one would be inconvenienced by the construction projects slowing traffic, or doubled speeding ticket fines.

    9. We would need no eminent domain proceedings to steal other people’s property. We could simply rent cheap, useless vacant land for a couple years while each project rushed to completion, and then the owner could decide what if anything to do next with his property.

    10. Politicians love to attend ground breaking ceremonies on public works projects. At the propitious moment, together they each dig a single petite spadeful of dirt ? to great applause and frantic picture taking. They then turn the project over to the pros with their giant Caterpillar equipment. But with my project, our politicos could dig a second shovelful, and then a third. And no need to stop there. Indeed, I see this ongoing work as a new requirement for holding office. Think of it as the next aerobics fad. An ancillary benefit is that the more time politicians spend digging, the less time they’ll spend legislating ? a huge cost savings for us all.

    11. Unlike most government activities, these projects would not compete with or undercut the private sector. Indeed, I know of no company in America offering this unique service.

    12. Perhaps most important, after the projects were completed, there’d be zero operating and maintenance costs.

    I challenge all you free market fanatics: What could POSSIBLY be wrong with this perfect solution to our economic doldrums?

    And please, don’t bring up Fr?d?ric Bastiat’s broken window fallacy.
    http://en.wikipedia.org/wiki/P…..ken_window

    I reject such logic-based refutations out of hand.

    Kindly send my Nobel Prize in Economics (kept the medal ? just remitting the check will suffice) to my offshore account.

    My proposal is a no-brainer!

    Literally.

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