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A hometown stimulus story
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Sometimes when you watch the news and hear about some policy in the works, you might think one of two things: "How is this going to benefit me, the average Joe?" or "Eh, it won't make a difference in my daily life". Today I'd like to post a "hometown stimulus story" because I thought the same thing when the stimulus bill was on TV. I realize it has been a long time since I last posted, but my new job and gym schedule have both kept me pretty busy. Now that I have a bit of a routine, I'd like to post more often.
It's my new job that has given me this story to present to you. I'm a computer technician for my hometown school district. I live in Clovis, a town of probably 37-38,000 people. Small town. I was surprised when I first heard that Clovis schools received stimulus money.
Unfortunately, because of the economy, the state government is cutting the budgets of school districts across New Mexico. All of our money comes from the state (even local tax monies are funneled into to Santa Fe and then redistributed, due to a lawsuit in the 1970's), so this is significant. As a result, Clovis' school district has initiated a hiring freeze. Even if someone resigns, we will not be able to replace fill their position, no matter how important it is. I was quite lucky, blessed really, to have gotten in when I did.
Governor Richardson has said before that he does not want education to have to take budget cuts. The state legislature, however, has pulled a sleight of hand by cutting the budget of education and filling the hole left behind with stimulus money. It ends up evening out. Sigh of relief that we survived the state's shenanigans? No, because the stimulus money only lasts two years. A little over a year, I believe, and we will be stuck with the budgetary hole.
This raises the larger issue I have been mulling over that pertains to the stimulus plans. I've come to the conclusion that they are a bad idea because they don't create sustainable effects. They are good at accomplishing short-term goals, granted. A stimulus bill might help get that annoying road repaved. How does it do this though? By creating jobs for highway workers. Theory being, those workers will then be getting paid, and they will spend their money, which will become circulated in the economy.
One good effect of a stimulus bill is that the dollars put into the pocket of the highway worker by the government through which he was hired will stay in circulation long after the road is complete and he/she has to search for another job. Those dollars will continue to be spent and respent by firms and individuals. When money is being spent, well, that's the lifeblood of the economy. So in a macroeconomic sense, a stimulus can in fact stimulate the economy. But we should also consider that not all dollars flow through the economy the same way, and not everyone will benefit, much less will everyone benefit equally.
The main downside is that the construction worker will find himself or herself out of work when the road is done being paved. He or she will have to search for another job and reenter the same pool of job-seekers, causing more people to be out of work. So in a microeconomic sense, or in the sense of an individual "Joe the Highway Worker" (can't use Joe the Plumber because it's taken now), the stimulus is not a good idea. I haven't even touched the debt aspect of a stimulus. Mostly because our budget deficit is something I don't know enough about.
For Clovis schools, yeah, we might have broken even because the state government filled our budgetary hole with stimulus money. We could buy some new computers with the money, but we can't create or fill any vacant positions--at least, none that we want to keep past a year! The money is almost pointless. Eighty-five percent of our budget is salary & benefits.
So, to my amazement, the stimulus bill that was all over TV at one point reached down to little ol' me in Clovis. It may benefit the economy of the US in a larger sense, but it certainly won't benefit my place of employment. It was given to us, but due its temporal nature, it's not going to be there for what we really need.
