IN CASE YOU MISSED IT: DISPATCH EDITORIAL: Unstimulating: Three years of stimulus leave little to cheer but plenty of debt
With the recent marking of the third anniversary of the first federal stimulus bill’s passage, it’s hard to argue that taxpayers got their $800 billion worth. If anything, the American Recovery and Reinvestment Act — passed along party lines, with the aid of all sorts of side deals and kickbacks to woo holdout lawmakers — ultimately might have delayed and extended the pain of the recession by providing only short-term and inefficient fixes to a much-larger economic problem, while significantly increasing the nation’s burden of debt.
That hasn’t stopped Democrats, in full election-year mode, from taking a victory lap. They’ve been reiterating the unprovable claim that things would have been much worse had the government not spent billions of borrowed dollars to subsidize everything from new light bulbs for businesses to poorly executed and inadequately monitored home-weatherization projects to high-speed-rail lines that aren’t economically viable.
In fact, the only fault many of them can find with the stimulus is that it wasn’t large enough. Journalist Michael Grabell’s just-published bookMoney Well Spent? recounts that a stimulus of well over $1 trillion was originally discussed but discarded because politicians understood there were limits to what the public would stand for.
Despite all the promises of transparency, there were problems with the full disclosure and oversight of stimulus funds from the outset. Grabell reminds us that the recovery.gov website was slow to get going, and was delayed in reporting details of expenditures; there were far fewer “ shovel ready” projects poised to create jobs than initially promised; and the “saved and created” method of reporting jobs supposedly tied to the stimulus was quickly recognized as a sham, overreporting job numbers or including jobs that never were in danger.
No matter to the stimulus backers: they just moved the goal posts. When critics questioned the “ saved and created” job numbers, they just changed the terminology to the number of jobs “supported” by stimulus investments.
Today, saddled with an ever-ballooning debt and a national unemployment rate that has remained above 8 percent — and is much worse if one takes into account the number of people who simply have given up trying to find a job or are underemployed — the absurdity of the argument for the stimulus is apparent to the majority of Americans who continue to be faced with tough choices in their own household budgets.
Grabell says that the Keynesian economic theory on which the stimulus is based “seemed contrary to common sense” to many citizens. He recalls how one unnamed source summed it up to him: “If I just lost my job, and my wife suggested we fix up the house, I’d say she was crazy.”
We’ll be paying for this addition to our house for a long time to come, with little return on investment.