Are You Out There, Stimulus? It's Me, The Taxpayer.


Columnist Ron Hart asks a question that's answered by the cover story of the current issue of Reason (and perfectly summarized by the cover image of same): Where did all that sweet stimulus money go?

Of the money spent in swing state Wisconsin, 80 percent went to public sector unions – those with already locked-in jobs. In fact, right-to-work states got $266 less per person in stimulus money than heavily unionized states. Where Democrats had a vast majority of representatives, their states got $460 per person more.

More pointedly, Hart writes,

Remember when Obama got his trillion-odd dollars of "stimulus money" which he and the Democrats breathlessly said we needed for "shovel ready" jobs to re-build roads and infrastructure? Please e-mail me if anything of the sort got built in your town. Nothing got built in the cities where I spend time….

Read the whole thing.

Peter Suderman's article in the May issue—which you'd be reading right now if you subscribed for just $14.63 under our special Sequestration Offer—lays out exactly where stimulus spending went and why it didn't work as advertised.

Yes, tens of millions of dollars literally went to install new toilets in parks Alaska, New Mexico, Washington state, and elsewhere. If only we could have flushed our way to recovery.

More important, Suderman writes (and this can't be underscored enough), "The economy's performance continues to be far worse than the White House's worst-case projections for what might happen if there had been no stimulus at all."

wikimedia commons

Stimulus defenders will claim that the only thing that stood between us and a second Great Depression was the the $787 billion stimulus (a figure later upgraded to $833 billion). Suderman patiently and exhaustively catalogs why any such claims not only fly in the face of observable economic reality but also rest upon weak theoretical assumptions about the size of the government's multiplier and the effect of policy changes on employment.

There's probably no changing some people's minds, but for those of you who may yet be convinced that stimulus spending isn't all what it's cracked up to be, ponder the latest Bloomberg View column by Peter Orzag, who served as Barack Obama's first budget director and helped created the 2009 stimulus package. You know, the one that was supposed to be filled to the busting-point with "shovel-ready jobs" that were heavy on road and bridge repairs.

"It's the perfect time to fix our roads and bridges," reads the headline to Orzag's March 26 piece. He writes that while "the 2009 stimulus bill helped a bit," we only spent $100 billion on infrastructure. Now,

we need to couple immediate federal spending on public assets with substantial, credible deficit-reduction measures that are scheduled to take effect later on. Such a "barbell" approach to fiscal policy would require that Republicans acknowledge the value of additional stimulus while the unemployment rate is high, and that Democrats see how Medicare, Medicaid and Social Security could be preserved and strengthened through certain cost-saving measures over time. The upfront piece should include an ambitious $250 billion infrastructure program (including federal, state and local spending) over the next two years.

Of course, such spending isn't nearly enough, so Orzag further suggests that we bring back the "Build America Bonds" that have helped create record levels of municipal borrowing and then start adding user fees on top of it all, because "a road-pricing system could raise as much as $55 billion a year to finance new investments or deficit reduction." Meanwhile, congressional Democrats are calling for somewhere between $100 billion (Senate members) and $200 billion (House members). Because invoking "substantial, credible deficit-reduction measures" means never having to reduce spending. Or looking at proven ways of tapping private funds for infrastructure buildout during "fiscally constrained" times. No, let's tax and borrow and throw user fees on top of the whole megillah. Because, you know, the new money can be used for "deficit reduction" or "new investments."

The pattern here isn't hard to detect and it is about as comforting as 18th-century medicine: We need to keep bleeding the patient until he recovers enough so we can stop bleeding him. If he's not up and walking around in a little bit, that's only proof that we haven't bled him enough. But don't worry, because we'll enact substantial, credible blood-recovery measures down the road.

For more on why the stimulus failed, watch this Reason TV case study of spending in Silver Spring, Maryland:

NEXT: Egypt Captures Scuba Divers Trying to Cut Underwater Internet Cables

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. My favorite part of the stimulus: The Signs.

    1. You could have at least posted the video now that you infected us all with that brainworm.

      1. I can understand sarcasmic doing something like this, HM; but *you*?!

      2. And it’s an anti private property song.

    2. There’s a road under construction near my house that has had one of those signs for 3-4 years now, I guess. It’s a 2-mile stretch that’s scheduled to be completed in summer 2014. That’s right. This 2-mile “shovel-ready” project will only take about 5 years to complete, if it finishes on time.

      1. In Oklahoma City there is a huge interchange where I40 and I35 intersect. In 1973, my parents were driving through it and got caught in a traffic jam because they were redoing it. In 1987, my family moved to OKC and they were still working on it. Sometime in the 1990s, the project was completed but was no obsolete and had to be redone. Right around 2002, it was finally completed. Twenty eight years for a single large interchange.

        1. in Michigan, the roads are _always_ being fixed. I wish we could bring some ancient Romans in – they knew how to make a frickin’ long lasting road.

          1. In Maryland the roads are horrible, despite having some of the highest taxes in the country. Funny how the roads were better in that nihilist Somalia loving Texas.

            1. Dear lawd how I hate MD.

        2. I live in OKC and it only took then a few years to redo a huge stretch of I40 near downtown. It’s really nice too. Of course we also got wheelchair ramps for nonexistent sidewalks.

      2. Well, yknow, those poor hardworking union laborers can’t be made to work too hard

        1. This.

          Everyone knows that the reason infrastructure projects take forever and always go over budget is because they are controlled by public sector unions.

          It’s just a big gravy train to them, and the fact that politicians tout these projects are “jobs” programs just encourages them to be even more lazy and inefficient than usual.

      3. Safe guess: It won’t finish on time.

      4. Ask anybody from Pittsburgh about Rt. 28. It’s been under construction for the 12 or so years that I’ve been living in the area.

        Or the 31st Street Bridge… completely redone in 2008, and closed again for construction.

    3. But if even one union job is saved, it’s worth it.

  2. It is a shame we don’t have anyone to go out and do some investigation and then do some kind of long form magazine article or TV news special about what happened to all of that money. Seems to me there used to be these things called journalists who would do that sort of thing and would actually make an effort to hold the powers that be accountable. Somehow they sort of disappeared around January 20th, 2009.

    1. They’re too busy baking stimulus anniversary cakes to do any real investigating.

  3. They redid an onramp or two here with the stimulus money. Recession fixed.

    1. So that is where all this prosperity came from!

    2. And that is the idiotic thing, the “redid” the onramps. There was no new infrastructure created and I’d be willing to bet that the ramps that they “redid” did not really need all that much if any repair work.

      This makes “infrastructure” spending the equivalent of paying one group to dig a hole and another group to fill it, the end state is exactly the same but money was consumed for no benefit.

      Infrastructure spending could be a form of stimulus if it produced net new capabilities which are needed and did not previously exist, i.e. building a new bridge over a river to alleviate traffic on an overused existing one, but maintaining an existing asset, even where it is needed can not stimulate the economy, at best it can prevent the destruction of existing wealth (and this assumes that the asset is still needed and valuable).

      1. Well, you have to take into account the fact that the neo-Keynsians who control our government seriously believe that it doesn’t matter what you spend money on as long as you spend it. They honestly DON’T CARE whether any actual infrastructure gets built. In fact, it’s even better if nothing gets built at all because they you have an excuse to spend money on it TWICE.

  4. But what about the magical multiplier that creates value out of nothing?

    1. But only with magic government money. Private projects like Keystone do nothing for the economy.

      1. Right. When people voluntarily exchange goods and services we become poorer. Only when government arbitrarily takes from one and gives to another is wealth created.

        1. The same people who play up the “multiplier effect” of some useless aquarium or sports stadium will tell you with a straight face that a productive project that only requires government approval and no tax money like a pipeline or a refinery is an economic loser.

          1. Well, yeah. Something like that is going to generate profits for rich people. As we all know, there is only a fixed amount of wealth out there (except for the wealth that is created out of thin air by government spending). So when a rich person gets richer, a poor person must be getting poorer.

    2. You only get the multiplier when you spend on things that are completely unproductive like welfare. Otherwise, you’re stealing jobs from someone.

    3. They were right about the multiplier! They were just off by a few decimal places… and maybe the sign.

  5. insert Onion money hole video here.

    Anyway, speaking locally, we got a roof for our farmer’s market. Now we can buy produce without rain hitting our fragile heads.

  6. They built a light rail line in my city using some of this money. However there is a interstate road running parallel to it and they failed to do maintenance on it so that the potholes got so bad that dozens of cars were damaged.

    The light rail line only carries a few thousand people a day while the interstate carries tens of thousands but instead of fixing the interstate they wasted the money on a light rail boondoggle. The local transit system is saying that they are running out of money because the fares don’t cover the costs

    1. “But main street’s still all cracked and broken…”

      “Sorry, Mom, the mob has spoken.”

      1. +1 Intertube for you.

    2. In my city, the subways have the highest ridership in fifty years and the only visible effect of the stimulus was several lines dropped (plus dozens of bus routes). Worker agitation seems to have settled to a low simmer, so I guess *they’re* being kept happy.

  7. I was just listening on the radio to a guy explaining how the responsible thing for the feds to do would be to spend a bunch of money on infrastructure, because potholes and airport delays. Lulled by the rhetoric, I forgot that all this infrastructure was supposed to have been covered by the stimulus.

  8. The bulk of the stimulus funds in my county went to paying for existing and new Section 8 housing. I am not sure the county’s motives. I don’t know if the stimulus went to Section 8 to keep from having to cut somewhere else in the county budget, to import votes from Baltimore or for the county executive, who sees himself as Maryland’s governor’s heir apparent, to buy future votes. I suppose that none of these explanations are mutually exclusive.

    1. It also went straight to state and local governments to cover salary shortfalls for employees. It was nothing but a pay off to Democratic voters.

  9. You can look up where the money went at the website.

    It’s all the usual crap. All we did was jack up government spending in a very unfocused way, which no doubt lead to a lot of waste when the funds were distributed. (I remember seeing that a lot of the small business money was wasted on retailers, for example.) Also, bribes for low to medium income voters. LOTS of those.

  10. OT: I can’t believe the Maryland so-called Firearm Safety Act of 2013 is not getting any attention. Disregard the 2nd Amendment implications of this transitivity and lets focus on the pure stupidity of the law:

    “Handgun” includes signal, starter, and blank pistols.

    This is unbelievable. My dog training blank pistol – a noise maker that is declared a non-firearm by the BATF – that is designed so that nothing but blanks can be chambered is going to be controlled the same as Dirty Harry’s .44 Mag. My blank pistol does not even have a friggen barrel. Where the barrel would normally be there is a solid metal rod.

    What is even worse for the country is Governor O’Malley, whose office is behind this proposed law, is considered a front runner for the Dems 2016 Presidential run.

  11. Stimulus funds ? Howard County, MD
    Energy Audits…..3030.story
    General BS, including OT pay for cops
    Special Ed
    $9,489,712 Special Education Grants to States, Recovery Act To assist states in providing special education and related services to children with disabilities in accordance with Part B of the IDEA.

  12. So the stimulus cost $833 billion. There are $314 million people in the US. That’s $2440 per person.

    Why couldn’t they just write everyone a check for $2440 ?

    1. You already know the answer to this, but …

      1. They know well damn well it would not work and all along it has been a way to hide graft, pay off supporters and buy future votes.

      2. The wrong people would get the money and all along it has been a way to hide graft, pay off supporters and buy future votes.

  13. I did subscribe during the Sequestration sale, and I haven’t received a daaaaamn thing. Why you lyin, Nick!?

  14. “The president’s campaign, if you will, focused on giving targeted groups a big gift,” Romney said in a call to donors Wednesday. “He made a big effort on small things.”

    Of the money spent in swing state Wisconsin, 80 percent went to public sector unions ? those with already locked-in jobs. In fact, right-to-work states got $266 less per person in stimulus money than heavily unionized states. Where Democrats had a vast majority of representatives, their states got $460 per person more.

    I don’t know if it’s sadder that even Romney wouldn’t stand behind his statement, or the fact that the leeches could be bought so cheaply.

Please to post comments

Comments are closed.