You are probably wondering how much of the 787 Billion dollar stimulus package has been spent and the impact of this spending on helping our economy. You certainly heard from multiple sources that the deep recession finally slowed down or possibly reversing as can be measured by exuberant Newsweek articles, CNN pundits and leading economic indicators. True, housing prices have stabilized , unemployment rate slowed down, manufacturing is up, companies reporting stronger than expected earnings and stock market is booming. Does the much maligned stimulus package deserve any credit?
The following information has been taken from ProPublica, they are currently tracking spending per department and if you are interested in a detailed breakdown I urge you to explore this fantastic resource.
As you recall, the stimulus package was designed and marketed as an emergency piece of legislation designed to stem the bleeding of our faltering economy. In fact the stimulus package was the biggest piece of spending in the history of our country smacking of FDR's New Deal programs and laced with over one thousand pages of legalese. In order to fully appreciate the urgency of the matter keep in mind that not one member of Congress read the full bill and in fact bloggers knew more about this bill than our lawmakers. Urgency of passing this bill as told by Harry Reid hinged on funds going to be diverted to "shovel-ready" jobs and provide work in the face of mounting unemployment. Republicans in the House were not convinced and collectively rejected the bill with zero Republicans voting in a rare demonstration of unity. Senate Republicans were almost as united, but three GOP members including Specter the Defector provided the necessary votes to break Republican filibuster. Let us see whether Republicans were correct in rejecting this piece of legislation.
Let us examine some of the major recipients of taxpayer moneys for brevity we will examine those departments receiving more than 20% of allocated funds.
Railroad Retirement Board: Small chunk of change and unclear where the funds are going.
Social Security Administration: 13 billion spent upgrading computers and one time payments. Not stimulating as there is no direct impact to job creation.
Veterans Affairs: .5 billion spent on upgrading facilities, payments, state grants and benefits to veterans. While not stimulating, entirely justifiable given the neglected veterans in this country.
Department of Labor: 18 billion spent on providing education and worker training to workers and "easing the burden of the recession" by assisting and expanding access to health care. Not stimulating, no direct impact on job creation or tax benefits. Providing education to workers is not the responsibility of the federal government and easing the burden of the recession can create a dangerous precedent of reliance.
Department of Justice: 1 billion spent on providing training, equipment and support for crime prevention including the hiring of additional police offers. Stimulating as it provides jobs to those seeking employment as police officers, however police are the responsibility of municipal governments. In other words we here in Boston should be not be paying for cops in Wichita, Kansas.
Health and Human Services: 28 billion spent on upgrading hospital's IT programs, research and state grants, Medicare payouts. The biggest recipient of taxpayer moneys has also the most vague and hard to navigate web-page, giving no clear answer as to what the money is being spent on. According to the information there, it appears that the money is being used to advance Obama's theory regarding electronic record keeping and the health industry. Whether or not upgrading our hospitals will impact us beneficially is to be determined, but this appears to be non stimulating spending and egregious spending at that.
It is also worth mentioning Department of Education which has spent 14 Billion on state grants, school modernization, Pell grant funding and possibly preserving education jobs in states where funding is critical. Largely not stimulating as most of the money is being used on things that simply have no impact on our economy what so ever and do not belong in a federal stimulus package.
Total spending as of today: $84,587,463 or 14.5%!
Examining some of the programs that received the most moneys as of yet one can make two conclusions. First, tracking the money and understanding exactly where it is going is a fool's errand and an extremely impractical task. Leaving us with a collection of arbitrary spending plans according to the government agencies in charge of distribution. Secondly, most of the spending as of now has been NON stimulating and largely have been focused on state grants (loans), modernization and direct payouts. Percentage wise, I can make a very random guess that of the 14.5 percent, perhaps 3-5% has been directed to places that create jobs and this is a very generous estimate on my part.
So, can 3-5% possibly stop one of the worst recessions in thirty years? Or was the CBO absolutely spot on when they predicted back in February that by the end of 2009 our recession will slow down and reverse with or without a stimulus intervention. You be the judge, but as of now I am not seeing any reason why Congress jammed this bill down our throats and it should be no surprise at this point why 45% of Americans think we should cancel the remainder of the stimulus bill. A strong platform for 2010 can be a pledge to dismantle the remainder of the stimulus bill.