An Even Smaller Mouse

I’ve previously posted on the tiny amount of job creation that has been attributed to the massive “stimulus bill.”   Now it turns out that even the 34,000 jobs that the government claimed were “saved or created” by stimulus spending is itself an inflated figure.  An AP report states that the reported number of jobs “created or saved” is overstated by thousands of jobs, with some jobs double- and even triple-counted and others just invented.

Taxpayers legitimately should ask whether the stimulus package, which was supposed to have an immediate impact on the economy, is worth its near trillion-dollar price tag as we view the employment results some 8 months later.  It is hard to avoid the conclusion that our elected representatives viewed the stimulus package as a once-in-a-lifetime opportunity to reward political supporters and cronies with government contracts, to no apparent purpose.  Having sown the wind with their crass and purely political uses of our tax dollars, I hope those wretched politicians who wrote and voted for the stimulus package someday reap the whirlwind.

Parturient montes, nascetur ridiculus mus

Recently the federal ‘government issued the first “report card” on jobs creation by the $787 billion stimulus package passed by Congress and signed into law by President Obama in February. The data that was released is limited to contracts, and more comprehensive information that includes grants and loans is supposed to be released at the end of this month. Other facets of the stimulus package include “safety net” spending, tax cuts, and fiscal aid to the states.

What does the data on federal contracts that was provided indicate? According to the Recovery.gov website, 30,383 jobs were “saved or created” by the federal contract actions that have been reported to date. I am pleased to report that, in Ohio, according to the government website, 699.08 jobs have been saved or created. I’m not sure what the fractional numbers indicate, other than that partial jobs — presumably ones in which the stimulus money has produced an increase in hours, or perhaps represents a portion of the work being performed — are being counted somehow. One possible explanation may be found elsewhere on the website, where it reports that, as of October 10, 112,219 stimulus-related reports had been filed with Federalreport.gov. It is a fair guess that at least some of the jobs that are reported as having been created or saved, in whole or in part, are either governmental or private sector jobs related to completing the government paperwork and forms related to receiving contract awards and stimulus payments.

I’m sure that the 699.08 people in Ohio whose jobs have been created or saved in whole or in part by the federal contracts are happy to have those jobs and partial jobs, but I still can’t escape the conclusion that the stimulus package has not delivered much bang for the buck. Indeed, the Recovery.gov website indicates that most of the contract stimulus spending has not even occurred yet. A pie chart in the middle of the home page indicates that, of the more than 5,000 contracts being addressed, less than 20 percent have been completed, and much more than half are less than 50 percent completed or have not even begun. Such statistics just indicate that the stimulus package really failed of its essential purpose, no matter what spin the politicos try to put on it. The stated purpose of the stimulus package was to provide an immediate infusion of cash and jobs to try to moderate the recession. We are now eight months after the enactment of the package, and a significant portion of the purportedly stimulative spending has not even occurred yet.

The Latin heading for this post, by the way, refers to “laboring mightily and delivering a ridiculous mouse.”

Healthcare Reform A No-Brainer? (Cont.)

UJ recently asked whether reforming the American health care system shouldn’t be considered a “no-brainer” — that is, something that is so obvious anyone should support it.  I thought of that posting when I saw the most recent Rasmussen poll, which shows that support for health care reform continues to ebb.  On June 27 and 28, 50 percent of those polled approved health care reform legislation and 45 percent disapproved it; on September 24 and 25, only 41 percent approved of such legislation and 56 percent disapproved.  In the space of three months, then, there has been a 20-point swing in the poll results.

If, as UJ believes, this issue is a no-brainer, why has support for health care reform dropped so dramatically and opposition increased to such an extent?  I don’t buy that this shift in popular opinion is the result of some orchestrated plot or a vast, right-wing conspiracy that has fooled gullible Americans.  Instead, I think a big part of the reason is that support for change always diminishes when proposals move from abstract generalizations to concrete specifics.  It is easy to support the general concept of “health-care reform,” but when you see how that reform will be accomplished — when you learn whose current insurance coverage may be put at risk, whose coverage may be taxed or limited, and who may be required to pay for coverage they did not have to pay for before — some people necessarily are going to be upset and will move from supporters to detractors.

I also think there is another force at play here.  Regardless of what the Administration and Congress may say about the results produced by the stimulus package, I think many Americans feel like politicians used the economic crisis, and the general perception that some kind of economic stimulus was warranted, as a convenient excuse to enact every imaginable pork-barrel spending project, even if the project wouldn’t go forward until years in the future after the immediate need for stimulus spending had long since passed.  If you believe that Congress acted irresponsibly and purely in furtherance of its own self-interest in response to the recession and global economic crisis, why should you believe that they will act carefully, prudently, and in the national interest in addressing something as complex as health care reform?

The Perils Of Overreaching

Richard recommended this David Brooks column, which aptly captures what I think a lot of Americans are feeling.  Why must we lurch from one politcal extreme to another and never seem to make any real progress?

With every new Administration and new Congress there is a window of opportunity where Americans will listen to what they have to say and, in many instances, give them the benefit of the doubt.  That window seems to be rapidly closing for President Obama and Congress.  I think many voters now feel like Congress took advantage of a convenient crisis atmosphere to enact legislation that paid some political debts but really didn’t do much of anything to help the country as a whole.  The payment of those political debts will now be laid at the feet of the American taxpayer, present and future.  Given the apparent failure of the stimulus legislation, why should Americans now trust Congress to exercise sound, objective, dispassionate, apolitical judgments as they tackle enormous issues like health care, or enact restrictions on how our economy can function in the name of climate change legislation?

Haste Makes Waste

The Congressional Budget Office analysis of the massive cost of the health care proposals that are being considered by Congress deals a crushing blow to one of the most cited selling points for health care reform:  that it ultimately will save the taxpayers money.  Adding hundreds of billions of dollars of additional health care spending on top of the already staggering federal budget deficit should make even the most ardent proponent of health care reform a bit squeamish.  (I also believe that the ineffectiveness of the “stimulus package,” which is increasingly being exposed as classic pork-barrel spending that has done little except cause the federal deficit to balloon, has reduced the public’s willingness to trust Congress as they rush through another sprawling and expensive legislative proposal.)

The health care legislation is a good example of how political considerations often war with prudence.  Any legislation that attempts to fundamentally restructure a huge part of our economy — a part of our economy which also involves literal life and death issues — should be the product of careful consideration, thorough hearings, and input from all of the many potentially interested parties.  Because the Obama Administration believes that its political clout is waning, however, it has demanded that Congress produce legislation before the end of summer — a deadline which, if met, would guarantee a law that is not nearly as thoughtfully considered as it should be.

I recognize that, in the Clinton Administration, the deferral of health care reform meant the death of health care reform.  Many health care reform advocates are afraid that situation could happen again.  I’m willing to take that chance, however.  This time, Congress should act deliberately and responsibly before it commits the federal government to hundreds of billions of dollars of additional spending obligations at a time when the country already is drowning in debt.  Perhaps the sobering reality of the CBO analysis will help to bring that about.

Lies, Damn Lies, and Unemployment Statistics

This article does a pretty good job of laying out the hidden issues lurking in the unemployment statistics, such as “underemployment” due to part-time work, unpaid leaves, declining average workweeks, people who are probably incorrectly assumed to have found jobs, and people who may have just given up looking for a job, among others. The author makes a convincing argument that the reality behind the statistics suggests a long-term recession in which it will take years for meaningful job creation to occur.

Interestingly, the author’s recommendation is — more stimulus spending, even though he concludes that the first stimulus package was poorly designed and has been ineffective! If Congress in fact botched the first stimulus bill and $787 billion in spending was undertaken without any positive effects, why should we believe that Congress can do a better job the second time around? Fool me once, shame on you, fool me twice, . . . .

The Moon, Eclipsed

The future of the United States manned space program is uncertain, as this article reports, and current economic conditions aren’t helping matters.   I am a big booster of space exploration, and I think it would be tragic if the United States lost its leadership role in that area.  It was a bad decision to cut back the space program in the 1970s, and it would be a worse decision to further reduce space exploration now.

As I have argued before, our elected leaders should view the space program as a kind of public works program that has, during the 50 years of its existence, helped to spur tremendous advances in technology, computer systems, and other areas that have been of immediate and lasting benefit to our society.  (To say nothing, of course, of Tang and the food called “Space Food Sticks” that was sold when I was a kid, but that is an entry for another day.)  Money spent on rejuvenating the space program and pursuing exploration, Moon bases, and so forth obviously will have greater long-term impact than widening a road, paying part of the salary of an employee of an arts organization, or other uses of “stimulus” package spending.

I am hopeful that President Obama will realize the terrible symbolic message that would be sent by a decision that takes the United States out of manned space exploration.  President Kennedy challenged and inspired a nation with his declaration that we would try to land a man on the moon in a decade.  America rose to that challenge.  President Obama and his advisors should not make a decision that indicates they believe that our country is no longer capable of doing so.   A President whose campaign theme was “Yes, We Can” should not be heard to say “No, We Can’t” when it comes to assuming a continued leadership role in space exploration.

The Blame Game

With the economy performing poorly, unemployment up to 9.4 percent, and the federal budget deficit ballooning, look for politicians of both parties to focus on the blame game. This article asks whether it is time to saddle President Obama and the current administration with responsibility for these conditions.

I think it is unfair to contend that President Obama is solely to blame for our current predicament; rather, there is plenty of blame to be spread among irresponsible politicians of both parties. I also think, however, that if the recovery is stalled or weakened because our economy is burdened with enormous federal debt and/or inflation, it is not unfair to hold the Obama Administration accountable. The President got what he asked for from Congress, and so far it hasn’t delivered the “stimulus” that was promised and forecast. Instead, the only apparent effect to date has been a huge amount of federal borrowing that has not had any immediate positive impact, but threatens to have negative long-term consequences.

Fishy Spending

This article reports that $50 million in stimulus funds will be used to help fish farmers buy fish food. Well, why not? Once you start to spend federal money on just about anything, so that you can argue that you have “created or preserved” a bunch of jobs, why would you draw the line at helping the $1.4 billion “aquaculture industry”?

If fish farmers really need algae, though, they may just want to stop by the pond near us, which is experiencing its annual algae bloom. Every summer, as fertilizer run-off hits the pond, an algae bloom follows and a fish kill ensues soon thereafter. Right now, it looks like someone poured bright green paint into the pond. So far, the algae bloom has defeated every technology fix they have devised for it, including the most recent technique of putting some pumps in the pond that make it look like a bit like a water treatment facility. If the catfish farmers of the Mississippi, Arkansas, and Alabama need somethng for their bottom feeders to nosh on, we Ohioans would be happy to part with our algae in the name of job creation and economic development.

Optimism and Unmeasurables

People are starting to note that the economic forecasts on employment data that were used to help sell the stimulus package were overly optimistic, and Administration officials are starting to admit as much.  (It would be hard to argue to the contrary in view of the increasing unemployment rates.)  And, others are skeptical about the job claims underlying the stimulus package on other grounds and are asking important questions — namely, what does it mean to “save” or “create” jobs anyway, and how can we measure whether that is actually happening?

Unfortunately, I think the unemployment rate is going to get worse before it gets better.  I hope I am wrong.

Painfully Lame

Here’s a stunner: the promises about unprecedented transparency, accessibility, and accountability in the spending of stimulus dollars aren’t being kept. The homepage of the main website that is supposed to provide the transparency, http://www.recovery.gov, is painfully lame and looks like a beginner’s Powerpoint presentation. The linked information about how stimulus funds are being spent is equally uninspiring. Here’s the “purpose” discussion, for example, from the US Department of Agriculture program plan: “The principal objective of the Recovery Act is job creation to help promote economic recovery. Through completion of $176 million of critical deferred maintenance work at ARS facilities across the country, the Agency’s Recovery Act program will create approximately 1,900 jobs.” It’s hard to know exactly what to make of this statement — was it the maintenance work that was critical, or the deferral of it? — but what does leap out is the fact that the principal justification for $176 million in spending is the creation of 1900 jobs. You can do the math as well as I — that comes to more than $92,000 per job. What a bargain for the taxpayer! And that’s just one example.

The Stimulus Hits Home

We’ve received word that the Village of New Albany has received $686,000 from the federal stimulus package for road projects. According to this article, part of the money will completely pay for one planned project that involves installation of a traffic signal; the other is available for another project that involves repaving several miles of a local road. I imagine this kind of news is being repeated in communities across the country, where various local projects are being fully or partially funded with federal tax dollars.

So far as I can tell, in New Albany’s case the federal funds are being used to complete entirely local projects that otherwise would have been funded by the local taxpayers who actually use the roads. I suppose that road projects at least have some constitutional nexus to the federal government — they do have an interstate commerce impact, after all — but is this really what the federal government is for?

Airpork

This report is a classic example of the kind of stories we will be seeing more of as the federal stimulus bill funds get spent. It has all of the elements of classic pork-barrel spending — a powerful Congressman focused on bringing money into his district, a spigot of federal funds that continuously spews out taxpayer dollars with virtually no meaningful controls, and a project that makes no economic sense and therefore would never be undertaken by any private entity. The result? A multi-million dollar, state-of-the-art airport that has virtually no flights, virtually no passengers, and heavily subsidized fares — all thanks to Congressman John Murtha, for whom the airport is named!

I wish that the news media would aggressively seek out more of these kinds of stories. With the kind of horse-trading that goes on in the halls of Congress, we can be confident that for every John Murtha Airport near Johnstown, Pennsylvania, there are dozens of unnecessary federal buildings, recreation complexes, bridges to nowhere, and other monuments to pork-barrel spending to be found from sea to shining sea. It is absurd and appalling, and with the enormous amounts of taxpayer money that are being spent through the stimulus bill, it will only get much, much worse.