Stimulus Fail

Not that it is really necessary to make this point (as many of us were making it even before the Stimulus bill was passed) but the man tasked with coordinating Vermont's various stimulus programs reports that the stimulus pretty much failed. I thought this was a particularly interesting bit:

Another part of the job was to help Vermont entities win a large share of the "competitive" stimulus money available nationally at the discretion of federal agencies. Our electric utilities jointly applied for money to build a statewide Smart Grid. Our telcos put together applications for broadband money. Vermont received the most money per capita of any state for both broadband and energy. The Green Mountain State will probably benefit from these programs"”yet almost none of this money has been spent, thanks to the many federal approvals required.

The broadband and energy programs, in other words, are hardly examples of successful counter-cyclical spending: The only money spent on them during the recession was for grant-writing. More troubling, private investment in these areas, which might have occurred even during the recession, dried up as companies waited to see if they could build with taxpayer money. Entrepreneurial effort turned from innovation to grant-grubbing.

Wow, someone should coin a name for that.

I find it simply amazing that so many experienced political actors could have been fooled by this:

The acceleration of government projects that had already run the approvals gauntlet"”primarily the paving of roads"”worked. But the building of new infrastructure failed. Due to the time required to apply for grants and receive permits, none of it was done during the recession, and only a little will be done in the next few years.Nothing is "shovel ready" in the U.S. We've created a wall of regulatory obstacles"”environmental, historical sites, etc."”that blocks doing any major project on a predictable or reasonable schedule. Not even all the king's men with all the people's money can build tunnels, railroads, wind turbines, nuclear plants or anything else significant without years or even decades of delay. If permitting were speedy, we wouldn't need government money to have a construction boom.

That's easy to recognize after the fact, but plenty of folks with zero political experience, like me, were saying this before the bill was even passed:

A year from now, any truly new incremental project in the stimulus bill will still be sitting on some planners desk with unfinished environmental impact assessments, the subject of arguments between multiple government agencies, tied up in court with environmental or NIMBY challenges, snarled in zoning fights, subject to conflicts between state, county, and city governments, or all of the above.  Most of the money will have been spent by planners, bureaucrats, and lawyers, with little to show for in actual facilities.


  1. Sean:

    I think you missed the real purpose of the stimulus grants. Infrastructure and shovel ready projects were merely a fascade. Nearly 10x as much money went to Medicaid and aid to state and local governments to prevent retrenchment in state budgets and government payrolls. Unfortunately, $800 billion was spent and the days of rekonning were simply displaced by 2 years.

  2. bob sykes:

    Someone somewhere pointed out that in fact the US cannot put people on the moon. Actually we can't put them in low earth orbit either. This is not due to any sudden decline in intelligence or even lack of well-educated engineers. Instead, we are entangled in a web of political correctness, affirmative action, and environmentalism that has paralyzed both private and public activity.

    Setting aside the obvious corruption in the stimulus bills, there are NO shovel-ready projects. Even "fully approved" projects require bidding and permits to construct, occupy, etc. Law suits are guaranteed to happen. It is not possible to do any civil engineering in less than two to three years. Even existing infrastructure will slowly decay because it is not possible to repair it in a timely fashion.

    Is it not obvious that our entire society is becoming ever more incompetent?

  3. dullgeek:

    Experienced political actors aren't fooled by that. They don't care. Their goal is to accumulate power by passing around other people's money. Whether those spending programs work or not is irrelevant. Whether the money is actually spent is irrelevant. The only question they're trying to answer is can they force other people to fund pet projects? That's all that matters. And in that sense, the stimulus was a staggering success.

  4. Marko:

    Excellent op-ed by Tom Evslin. Not only did the stimulus fail, but in some cases made things worse. My guess it is bitter sweet for Coyote Blog to have predicted this before the stimulus began.

    I think Milton Friedman was spot-on when he described the two groups supporting bad programs: the do-gooders and the special interests. The do-gooders mean well but are (willfully) naive about the effects. The special interests have specific self-serving goals in mind but gladly take advantage of the do-gooders.

  5. FSBO:

    Bob said it. There just aren't enough shovel ready projects for the stimulus to be effective immediately.

    I'm sure there was some psychological benefit that the money was at least going to be spent, but if its not being spent now, then there really isn't a whole lot of benefit.

  6. caseyboy:

    Dullgeek - Are you suggesting that our politicians are so cynical as to pass laws that spend our money in useless projects just to see if they can do it? That they are just probing to see how numb the electorate has become? Why that suggests they are planning something on a grander scale.

    They got away with a huge power grab in the first 2-years of Obama, but I think people are now paying attention. Their recent Omnibus spending bill was more of the same, but the electorate called and emailed in opposition and the bill was pulled. A small victory, but maybe an indication of a change in direction. The question for me is whether the electorate can sustain the outrage necessary to really change things in Washington. It would be nice if it could be done through the ballot box.

  7. Ted Rado:

    Anybody who thinks government can do ANYTHING better than competitive private enerprise must be high on dope. This has been apparent to me for sixty years, but there are those who say "this is too important to be left to private business". If you want to screw something up and/or drag it out indefinitely at exorbitant cost, have government do it. The idea that government officials can pick winners better than the market economy is incredible nonsense.

    Business people are always looking for ways to make a buck. Energy companies have been searching for alternative energy sources since the dawn of time. All of a sudden, government bureaucrats are going to pick areas for R&D? If the object is to waste money, we are surely on the right track! If the government officials really want to stimulate economic progress, they should shut down the government for a couple of years and stop screwing everything up.

  8. luispedro:

    "crowding out" might be a more targetted description. From a theoretical perspective, it's good to see such a good example of it in real life.

  9. dwall:

    Somehow huge waste are redistribution is being kept off the radar screen. Over 40 billion redistributed through soros center for american destruction, van jones "green jobs" and the black panthers. Just google van jones+green+black panthers. The Blaze Blog has a youtube of van jones laying it all out. maybe Rep ISSA, San Diego will start the investigations into the green fraud.

  10. DensityDuck:

    It's hardly surprising that a bunch of career bureaucrats didn't see that there might be problems with a government solution.

    It's the same reason that you don't let coders write the documentation. These people live their entire lives in this environment, so of course doing things in that environment is simple and quick. They have absolutely no idea what it's like to be on the outside looking in.