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EDITORIAL
Con games and stimulus cash
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Updated: Apr. 9, 2012 | 10:25 p.m.
In old-fashioned retailing, it's called the "bait 'n' switch."
Advertise a product at an unheard-of low price to draw in the shoppers. Once they arrive, the salesman goes to work, showing them how they can get so much more value for their money if they'll just "step up" to the upgraded model, at an ever-so-slight increase in price. You did want the extended five-year warranty for a modest additional six dollars a month, right?
In extreme cases, it can even turn out that the fine print said "while supplies last." The three low-cost models were gone in five minutes, of course. "But we happen to have something even better, if you'll just step this way. ..."
Governments use the technique a little differently. Perhaps the police tax issue promised voters the money would be used to "put 500 more cops on the streets." A few years later, when nowhere close to 500 new officers are on patrol, a department spokesman blithely explains some of the money was used to buy new computers, "which are considered to be the manpower equivalent of one-and-a-half new officers."
More recently, remember how all those billions in "stimulus" money allocated in Washington last year were reserved for "shovel-ready" projects, creating new construction jobs and additionally re-building our infrastructure -- roads, piers, bridges, stuff like that?
Well, let the man in the plaid sport coat and the white Corfam shoes explain it all to you, Mr. and Ms. Voter. Turns out you didn't want a bunch of crummy infrastructure, after all. Instead, they found something much better to spend your money on, if you'll just step this way ...
As it turns out, most of that money is going where government always puts most of its money -- into fat paychecks for social service bureaucrats.
"Most of the roughly $300 billion coming directly to the states is being funneled through existing government programs for health care, education, unemployment benefits, food stamps and other social services," The Associated Press reported this week.
Two-thirds of recovery money that flows directly to states will go toward health care. Not hiring new doctors or nurses, mind you. Just paying medical bills for poor people -- and the salaries of those who handle this redistribution of your hard-earned cash.
By comparison, about 15 percent of the stimulus money will end up going for transportation -- including airports, highways and rail projects -- according to Federal Funds Information for States, a service of the National Governors Association and the National Conference of State Legislatures.
Overall, two-thirds of the stimulus funds will go to subsidize state budgets and unemployment compensation -- paying people not to work. Much smaller pieces of the pie will be allocated for weatherization, affordable housing and other projects designed to create jobs, The AP reports.
"We all talked about 'shovel-ready' since September and assumed it was a whole lot of paving and building when, in fact, that's not the case," explains Chris Whatley, the Washington director of the Council of State Governments, a trade group for states. He estimates states will get three times more money to prop up payrolls in the government schools than for transportation.
John Husing, a Southern California economist, agrees keeping teachers and cops employed could help prevent the recession from getting worse. But he says the stimulus package would have improved communities' ability to grow over the long haul if it had dedicated more money to public works -- as promised.
If the aim of the stimulus package was to jolt the economy, the government could have concentrated more of the money on areas that have suffered the steepest declines during the recession -- housing, autos, retail and restaurants -- says Edward Leamer, an economist with the Anderson School of Management at the University of California, Los Angeles.
Instead, in Georgia for instance, two-thirds of the $3.9 billion in "stimulus" funds the state expects to receive over the next 16 months will go to support existing social programs. Mississippi expects to spend only about 13 percent of its $2.8 billion in federal "stimulus" money on highways and bridges. The rest will be spent, as it is in other states, to preserve existing government programs and jobs.
Seven hundred billion dollars "to bail out the welfare moms and make sure government bureaucrats continue to get fat paychecks, benefits, and raises"?
That's quite a campaign slogan. Is that what they promised us last year?
If so, you'd think we would have remembered.
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S. Summerlin,
I did not accuse them of lying; I accused them of being stupid.
They criticized the small portion of the stimulus program that is money going directly to the states for not providing enough money for capital projects. They then used that criticism as a way to condemn the entire program.
There is a big problem with that. The portion of the stimulus program that is the money that is paid to shore up state budgets is not supposed to be for capital expenditures like roads and bridges. That money is meant to help states make up for shortfalls in their current budgets caused by much higher than expected expenditures on things like indigent health care and unemployment. As many people lose jobs and benefits, states have to find money to provide them with unemployment payments and medical care. Our own state budget is a perfect example of how it is that states don't have that money. The stimulus package for the states is meant to cover those shortfalls. We're using that money here in Nevada, for example, to cover shortages in our education budget.
The rest of the stimulus program is where you'll find the spending for capital projects.
Therefore, what the editors have done is bash this "money to the states" program for not doing something it was never meant to do. I'm a restaurant guy, so I'll use a restaurant analogy: It's like criticizing my dishwasher for failing to bring drinks out to the guests. I may pay the dishwasher, but I don't pay him to serve drinks, I pay him to wash dishes. Bashing him for not serving drinks would not only be unfair to him, it would be incredibly stupid of me to do it.
Hope and Change. These are not stratigies for success but for failure. Porkulus is a government patronage program, the stimulus bill will not stimulate anything but debt,to finish off the remaining confidence that exists. Most democrats have no clue what's coming, but that light at the end of the tunnel is the train. It's time to reign in government and reverse the disastrous course it has set us on.
Republicans bear a lot of the blame for this.