Coyote Blog

Waaaay back, before the stimulus was even passed, I did an analysis of the proposed spending in 2009-2010 and said that very little of it was for the infrastructure type projects that were being promised.  I concluded:

The reason so much of this infrastructure bill can be spent in the next two years is that there is no infrastructure in it, at least in the first two years!  42% of the deficit impact in 2009/2010 is tax cuts, another 44% is in transfer payments to individuals and state governments.  1% is defense.  At least 5% seems to be just pumping up a number of budgets with no infrastructure impact (such as at Homeland Security).  And at most 6% is infrastructure and green energy.  I say at most because it is unclear if this stuff is really incremental, and much of this budget may be for planners and government departments rather than actual facilities on the ground.

So don't call this an infrastructure bill.  This is a tax cut and welfare bill, at least in 2010 and 2011.

Via the Atlantic (hat tip to TJIC) we get a GAO report that comes to the same conclusions (they leave out the tax cut part and look at only the spending side):

But most federal stimulus funds aren't necessarily being spent to create $250K jobs out of thin air -- they're being spent to plug in the ongoing decay in state budgets. That was the conclusion of the GAO report early this month. Here's a graph they provided breaking down stimulus spending by program:

Of the $29 billion spent this year, 90 percent has gone to assist Medicaid and to stabilize tottering state budgets, according to the report. That's not just job creation -- that's emergency rescue, a fiscal crutch propping up our humpback deficit-ridden states. So what exactly is the logic in kicking the crutch away? If you see an old man with a cane who's barely managing to place one foot in front of the other, the logical commentary seems to me to be "Thank God for that crutch," not "Well obviously that crutch isn't doing much for him, he probably won't mind if I borrow it for a while."

But we're talking about job creation, so let's take a look at shovel-ready, highway spending, which the GAO puts at 6 percent of the spent stimulus. I suppose this would be a good place to knock the administration for not spending fast enough to create construction jobs, but Conor Clarke notes here (with a chart, of course), highway spending is actually ahead of schedule is all 16 states the GAO studied for the report.

Only $29 billion spent so far?  Can we please just stop it now before the other $700 billion or so get spent?  Why are we planning spending in 2015 to prop up the 2009 economy?