Jim Epstein on How Stimulus Fails

It's not hard to make the case that President Barack Obama's $840 billion stimulus was a failure. The economy, which was supposed to recover as a result of the massive spending, has largely remained in the doldrums. The administration's prediction in the event that the stimulus didn't pass—an unemployment rate of 8.8 percent—was exceeded within two months of February 2009, when the bill was signed into law. (At the time, the total cost was said to be $787 billion; that figure was later adjusted upward by more than $50 billion to align with the president's budget.) Democratic dead-enders claim this laughably inaccurate employment projection was based on a lack of knowledge about how lousy the economy really was. They tend to overlook another broken stimulus promise: that 90 percent of the jobs "created or saved" would be in the private sector. In fact, the biggest beneficiaries of stimulus funds have been public school teachers.

These big-picture truths paint a picture damning enough. But to better understand the fallacies of stimulus economics, it helps to take a close-up look at how the money was spent. To capture such a cross-section of stimulus reality, Reason.tv's Jim Epstein went to Silver Spring, Maryland, a suburb of Washington, D.C., that is home to many government contractors and other recipients of money earmarked for the "shovel-ready" projects that were supposed to bring the economy back to life.