Coyote Blog

I think this kind of argument might work for a libertarian, but I am not sure it is a very strong argument for a liberal Democrat that wants to do more rather than less of what Congress and the GWB administration did over the last 8 years to worsen the recession.

Personally, though, I'd say Obama has been remarkably restrained about the whole thing, especially when it comes to our disastrous fiscal situation.  In a mere eight years, George Bush and the Republican Party managed to take a thriving economy and a federal surplus and turn it into a hair's breadth escape from Great Depression II and an endless fiscal sinkhole.  Rome may not have been built in a day, but it didn't take much longer than that for the modern Republican Party to bankrupt America.

Particularly hilarious is that Drum blames the cost of the useless but expensive stimulus bill on GWB.  Huh?  And blaming Republicans for Fannie and Freddie is a real joke.

As you might imagine, the deficit in his world is all from tax cuts and not above-inflation increases in spending.  The basic picture he shows is absurd - money is fungible, so any trillion dollars of the government spending could be blamed for the deficit - it just depends on what spending you consider incremental.  Stupid analysis.  Though it is interesting that at least two of the major drivers even by their slanted analysis - Bush tax cuts and Afghanistan - are policy issues Obama was presented with opportunities to reverse and chose not to.

An enterprising UK resident has questions about starting a new green business:

My friend, who is in farming at the moment, recently received a check for £3,000 from the Rural Payments Agency for not rearing pigs. I would now like to join the "not rearing pigs" business....

My friend is very satisfied with this business. He has been rearing pigs for forty years or so, and the best he ever made on them was £1,422 in 1968. That is "“ until this year, when he received a check for not rearing any.

If I get £3,000 for not rearing 50 pigs, will I get £6,000 for not rearing 100?  I plan to operate on a small scale at first, holding myself down to about 4,000 pigs not raised, which will mean about £240,000 for the first year. As I become more expert in not rearing pigs, I plan to be more ambitious, perhaps increasing to, say, 40,000 pigs not reared in my second year, for which I should expect about £2.4 million from your department....

Another point: These pigs that I plan not to rear will not eat 2,000 tons of cereals. I understand that you also pay farmers for not growing crops. Will I qualify for payments for not growing cereals to not feed the pigs I don't rear?

I wonder if we adopted this in the US, if jobs not lost not growing grain to not feed to pigs that aren't reared  would count in the stimulus numbers?

via Tom Nelson

Via Valley Fever:

Republican senators submitted a report to Congress yesterday outlining billions of dollars of useless or stupid spending in the Obama stimulus plan.

What do we mean by useless or stupid? How about $100,000 for a puppet show in Minnesota or a $2 million replica railroad in Nevada....

The wasteful spending isn't isolated to Minnesota and Nevada, some of it is right here in Arizona.

According to the report, Arizona State University and the University of Arizona were given nearly a million dollars to study the work habits of ants.

"I had no idea that so much expertise concerning ants resided in the major universities of my state," McCain says. "I say that with an element of pride, but I'm not sure its deserving of these taxpayers' dollars."

Here are some I wish I had won grants for, at least in my youth:

Some of the other gems outlined in McCain's catalog of stupid spending are a $400,000 grant awarded to the University of Buffalo for a study on kids who smoke weed and drink malt liquor, a dinner cruise boat in Chicago that got $1 million to fight terrorism, and a $219,000 grant to the National Institute of Health to determine whether college chicks are more likely to "hook up" after drinking.

In other words, the federal government spent $219,000 to study beer goggles.

I have warned about this before:

In fact, Hollywood's portion of the stimulus package reveals an important factor of the Recovery Act: The money is not going to areas that would more directly stimulate the economy but instead to provide ongoing life support to deficit-ridden federal, state and local agencies.

That is the main impression I have gotten when reading the stimulus jobs data base -- the fake districts and BS accounting did not catch my eye so much as the fact that all the jobs seemed to  be saved jobs in government agencies.  I am pretty sure that had the stimulus been originally sold with its true goals -- to help stave off financial accountability in state and local governments -- it would have had more difficulty passing.

Though some of us saw this even in the bill itself (this blog, Jan 27, 2009)

So do you see my point. 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.

Obama specifically promises not to spend the stimulus money on dog parks  (as an example of what people would consider frivolous public investment).  Katherine Mangu-Ward brings us this picture of a stimulus funded dog park near her home:

Couldn't have illustrated the new corporate state that Obama is building better than this -- at state where large corporations, unions, and government officials conspire to use government power to enrich their contituencies to the detriment of smaller businesses, consumers, and taxpayers.  WSJ via Tad DeHaven:

The government has taken on a giant role in the U.S. economy over the past year, penetrating further into the private sector than anytime since the 1930s. Some companies are treating the government's growing reach "” and ample purse "” as a giant opportunity, and are tailoring their strategies accordingly. For GE, once a symbol of boom-time capitalism, the changed landscape has left it trawling for government dollars on four continents.

"˜The government has moved in next door, and it ain't leaving,' Mr. [GE CEO Jeffrey] Immelt said at the International Economic Forum of the Americas in Montreal in June. "You could fight it if you want, but society wants change. And government is not going away.'

A close look at GE's campaign to harvest stimulus money shows Mr. Immelt to be its driving force"¦ Inside GE, he pushed his managers hard to devise plans for capturing government money.

By January, Mr. Immelt had become a leading corporate voice in favor of the $787 billion stimulus bill, supporting it in op-ed pieces and speeches. Reporters who called the Obama administration for information on renewable-energy provisions in the legislation were directed to GE.

When the stimulus package was rolled out, Mr. Immelt instructed executives leading the company's major business units "to put together swat teams to get stimulus money, and [identify] who to fire if they don't get the money," says a person who heard him issue the instructions.

In February, a few days after President Obama signed the stimulus plan, GE lawyers, lobbyists and executives crowded into a conference room at GE's Washington office to figure out how to parlay billions of dollars in spending provisions into GE contracts. Staffers from coal, renewable-energy, health-care and other business units broke into small groups to figure out "how to help companies" "” its customers, in particular "” "get those funds," according to one person who attended.

From Henry Payne, in an article on the auto industry:

The Left likes having Big Industry straw men to bash whenever their socialist plans run aground, but the fact is, Big Industry is embracing the U.S.'s leftward lurch. Better to secure your place at the Rentseekers Roundtable, to lock out new competition and guarantee a never-ending stream of government welfare.

Cafe Hayek has a series of articles here and here on the absurd numerical games going on to pump up the stimulus numbers (which I also offered example of here, where pay increases were considered a "job saved").

For example:

Up to one-fourth of the 110,000 jobs reported as saved by federal stimulus money in California probably never were in danger, a Bee review has found.

California State University officials reported late last week that they saved more jobs with stimulus money than the number of jobs saved in Texas "“ and in 44 other states.

In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees.

That total represents more than half of CSU's statewide work force. However, university officials confirmed Thursday that half their workers were not going to be laid off without the stimulus dollars.

"This is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."

Also here:

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

The Globe's finding is based on the federal government's just-released accounts of stimulus spending at the end of October. It lists the nearly $4 billion in stimulus awards made to an array of Massachusetts government agencies, universities, hospitals, private businesses, and nonprofit organizations, and notes how many jobs each created or saved.

But in interviews with recipients, the Globe found that several openly acknowledged creating far fewer jobs than they have been credited for.

One of the largest reported jobs figures comes from Bridgewater State College, which is listed as using $77,181 in stimulus money for 160 full-time work-study jobs for students. But Bridgewater State spokesman Bryan Baldwin said the college made a mistake and the actual number of new jobs was "almost nothing.'' Bridgewater has submitted a correction, but it is not yet reflected in the report.

It is becoming clearer and clearer that the vast majority of "jobs saved" were in government, and in effect the stimulus merely had the effect of bailing out state governments that were able to use stimulus money to put off their budget reckonings.

Because when they defend this practice, they put themselves on record that they have absolutely no integrity in the process:

About two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren't saved at all, according to a review of the latest data by The Associated Press. Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren't saved....

But officials defended the practice of counting raises as saved jobs.

"If I give you a raise, it is going to save a portion of your job," HHS spokesman Luis Rosero said....

More than 250 other community agencies in the U.S. similarly reported saving jobs when using the money to give pay raises, to pay for training and continuing education, to extend employee work hours or to buy equipment, according to their spending reports.

Uh, right.  So does this mean that the Administration's pay Czar is destroying jobs by reducing salaries?  Seems like one would have to take this position to be consistent.  And wasn't, by the same logic, AIG actually creating jobs with the now-infamous bonuses earlier this year?

And by the way, it seems like those ACORN-like community organizers are returning the favors Obama has extended them by applying to the jobs reporting system their famously rigorous accounting standards they bring to their own finances as well as to voter registration .

Other tidbits from the article are also priceless:

President Barack Obama's economic recovery program saved 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan. Trouble is, only 508 people work there.

There is also another impression one gets from the article, other than seeing all the fraud, they is not highlighted by the reporter -- all of the jobs created seem to be government bureaucrat jobs or community group jobs.  Not one example of jobs actually producing something someone is willing to buy.  Except maybe for this example:

How did Kentucky shoe store owner Buddy Moore save nine jobs with just $889.60 in federal stimulus money? He didn't, and that's turning into a big headache for him.

Moore's store in Campbellsville, Ky., filed one of 156,614 reports from recipients of stimulus dollars designed to show how money from the $787 billion program is being spent, and how many jobs the funds have created or saved.

Moore's slice of the stimulus came in an $889.60 order from the Army Corps of Engineers for nine pairs of work boots for a stimulus project....

Paula Moore-Kirby...couldn't work out how to answer the question about how many jobs her father had created or saved. She couldn't leave it blank, either, she said. After several calls to a helpline for recipients she came away with the impression that she would hear back if there was a problem with her response, and have a chance to correct it. So with 15 minutes to go before the reporting deadline, she sent in her answer: nine jobs, because her father helped nine members of the Corps to work.

Here is the question:  In estimating the number of net jobs created by the stimulus package, how many jobs did the Administration assume were lost when hundreds of billions of dollars were pulled out of private hands and distributed by public authorities?

And the answer to that question is just one reason the analysis is absurd.  I have seen a lot of good critiques about accounting in the jobs numbers.  But the biggest single problem is that it is assumed that the trillion dollars Obama has pulled out of private capital markets (via deficit spending) wasn't really doing anything productive, so that redirecting it into pork-barrel programs chosen by Congress based on their campaign donor lists and run by government bureaucrats would use the money much better.

Anyone believe this?  So why have I not seen a single reporter ask the question, "But how many jobs were lost from where these funds were taken?"  Just because they are invisible or hard to count does not mean they don't exist.

In general, legislative responses to the recent financial crisis just amaze me, and I am a fairly jaded observer of Congress with very low expectations.

First, Congress responds to a crisis caused by too much debt and overleverage by ...borrowing a trillion or so dollars and deficit spending.

Second, Congress responds to a crisis caused by too much subsidiazation of  home ownership by ... subsidizing home ownership

Now, Congress has apparently responded to a crisis where risky debt was mispriced by... passing a law to reduce debt costs for the riskiest borrowers and shift that cost to the least risk.

Nice job.

From John Hasnas via Matt Welch:

Libertarians spend their lives accurately predicting the future effects of government policy. Their predictions are accurate because they are derived from Hayek's insights into the limitations of human knowledge, from the recognition that the people who comprise the government respond to incentives just like anyone else and are not magically transformed to selfless agents of the good merely by accepting government employment, from the awareness that for government to provide a benefit to some, it must first take it from others, and from the knowledge that politicians cannot repeal the laws of economics. For the same reason, their predictions are usually negative and utterly inconsistent with the utopian wishful-thinking that lies at the heart of virtually all contemporary political advocacy. And because no one likes to hear that he cannot have his cake and eat it too or be told that his good intentions cannot be translated into reality either by waving a magic wand or by passing legislation, these predictions are greeted not merely with disbelief, but with derision. [...]

If you'd like a taste of what it feels like to be a libertarian, try telling people that the incoming Obama Administration is advocating precisely those aspects of FDR's New Deal that prolonged the great depression for a decade; that propping up failed and failing ventures with government money in order to save jobs in the present merely shifts resources from relatively more to relatively less productive uses, impedes the corrective process, undermines the economic growth necessary for recovery, and increases unemployment in the long term; and that any "economic" stimulus package will inexorably be made to serve political rather than economic ends, and see what kind of reaction you get. And trust me, it won't feel any better five or ten years from now when everything you have just said has been proven true and Obama, like FDR, is nonetheless revered as the savior of the country.

For years in Arizona we have been told by the state government that we need to subsidize science.  I have never really figured out why my life would be better if scientists lived in Arizona instead of California, but apparently when governors get together and compare their states' penis lengths, this is one of the key topics that come up.  Why we need to subsidize, for example, bio-science in Arizona to keep up with California but folks in Kansas don't need to subsidize, say, awesome golf resorts to keep up with Arizona has always escaped me.  I have always felt that if we just keep taxes low and wait long enough, California is going to blow up and we will collect a lot of the best and brightest with no extra effort.

Well, I am starting to understand why we needed to subsidize bio-science with our Arizona taxes.  We apparently need to do so to ... attract large grants for Federal tax money.  So by subsidizing this sector locally, we built it up enough to attract Federal subsidies.  Great.  Actually we probably did not build up the sector per se, we just built a quality private bureaucracy that had the skills and incentives to write lots of successful grant applications.  Apparently there is still work left to do, though, as other states have invested in even larger grant-magnets:

States with strong science bases such as California, Massachusetts and New York, each landed more than 1,000 grants.

Twenty states secured fewer grants than Arizona's haul of 101 awards.

Arizona scientists will study things such as predicting asthma in babies, prostate cancer and the behavioral responses of kissing bugs, which are blood-sucking insects linked to a blood-borne disease that afflicts 11 million to 13 million people in Mexico and Latin America.

Arizona scientists say the batch of stimulus dollars through the NIH is a welcome change from years of stagnant federal funding for scientific research.

"There was no increase in federal funding for cancer research for five years - that was devastating," said Dr. David Alberts, director of the Arizona Cancer Center in Tucson. "Now, I'm encouraged."

Wow - thus we see why government spending grows so much faster than inflation.  Flat spending = devastating.

If I were in academia, the study I would like to do is to try to assess the total value destroyed by state and local governments merely in trying to move businesses and facilities from one part of the country to another.

From the AZ Republic, Paul Krugman is claiming that the administration's stimulus spending, which I don't think has even reached $100 billion of the programmed $1 trillion, has officially averted another Great Depression:

Aggressive stimulus spending by governments helped the world avoid a second Great Depression

but full economic recovery will take two years or more, Nobel Prize-winning economist Paul Krugman said Monday....

"We have managed to avoid a second Great Depression ... but full recovery is at least two years and probably more," Krugman said.

This is just a pure joke.  First, the total additional spending was tiny compared to the size of the world economy.  Second, almost none of the stimulus money has actually been spent -- even the article goes on to say that "Most of the money will flow in 2010."  So is Krugman arguing that just the notion of stimulus spending, without the actual spending, has saved us?  Third, most of the early projects were typically stupid, whatever governments could ram through their procurement processes in a short period of time.   I challenge even the most ardent Keynsian to argue this stimulus was truly structured to target underutilized resources, or whatever their theory is.  I would love to see Krugman stand up in front of a doctoral committee and justify this wild-assed supposition with actual facts and analysis.

But the even more incredible unproven (and in fact entirely non-verifiable) part of the statement was that we were even headed for a second Great Depression anyway.  Many of us from the sidelines said that this looked like a recession similar in magnitude to that of the early 1980's, and in fact that appears to be exactly what we got.  The whole "second Great Depression" meme is merely a giant straw man used first to stampeded ill-conceived spending legislation through Congress with little scrutiny and now to provide a fake alternative against which Obama and company can declare victory.   Krugman is so far in the tank, its impossible for me to even think of him as an economist any more.  The Nobel Laureate who now retails non-verifiable claims.

The fact is that this was a normal recession blown out of proportion first by the Bush and later by the Obama administration.  From the very beginning, it looked much like the recession of the early 1980's or the bank crisis of the early 1990's, and it recovered for the same reason - there are fundamental strengths in the economy.  In fact, the length of the Great Depression was in fact the aberration, caused more by FDR's wild proposals (the worst of which was the National Industrial Recovery Act) which tended to dampen the investment that normally picks up at the bottom of the cycle to take advantage of reduced asset values and input costs.

Other Assertions by Krugman

Interestingly, economist Krugman appears to think that the problem with the financial system is that people can make money in it.  Really?  Gosh, I thought people just invested billions of dollars for the warm feeling it gives them:

He said there was a need to restructure the global financial system and impose tighter regulations to avoid a repeat of the economic crisis, but expressed concern that the momentum for reforms appeared to be easing.

"We do not have the political will to do that just yet ... I suspect clever people can still make a lot of money from the financial system in the next few years," he warned.

I also thought this was funny, in the context of the recent financial mess.  He says:

"Over-reliance on self-regulation is a mistake," he said. "Global regulators should err on the side of investor protection and financial stability rather than rely on a 'buyer beware' regulatory regime."

I must say it is surprising to see Krugman saying this.    Let's think about mortgages, the primary driver of the recent financial difficulties.  In mortgages, the investor is the bank making the loan.  So is Krugman advocating for more protection of mortgage lenders and their insurers like AIG against home buyers who take their money and then don't pay them back?

Update: Oh, and TARP never bought any troubled assets, just was used to bail out a few selected politically connected companies.

The US Forest Service is using a million dollars of its stimulus money to ... fix broken windows! How appropriate.  But these are not any broken windows -- these are energy inefficient windows for a visitor center that was closed two years ago and for which no budget exists now or in the future to reopen.   Beyond the nuttiness of building a multi-million dollar visitor center, then closing it only a few years after it was built, and then spending a million dollars on its abandoned carcass, no one was available to explain how energy efficient windows will save money in a building that shouldn't be using any energy any more.  Remember, for this spending to truly be stimulative, the money has to be spent more productively than it would have been in whatever private hands it was in before the government took it.

But even forget the stimulus question and just consider the issue of resource allocation.   I work on or near US Forest Service lands in many parts of the country, and know that their infrastructure is falling apart.  Congress loves to appropriate money for new facilities (like shiny new visitor centers), but never wants to appropriate money for capital maintenance and replacements of existing facilities.  So there are plenty of needs for an injection of $274 million in capital improvement money.  And I know that the USFS has had teams of people working for 6 months on their highest priorities.  And after all that work, they allocated  almost a half percent of their funds on upgrading windows in an abandoned building?

Postscript: I have vowed not to write about the US Forest Service because I interact with them so much and such interactions would not be improved by my dissing on them online [I am in the business of privitizing the mangement of public recreation and am constantly working to convince the USFS and other recreation providers to entrust more to private companies.  One thing many people don't know -- the USFS is by far the largest public recreation provider in the world, far larger than the National Park Service or the largest state park systems].  However, I feel on safe ground here, as I think virtually every frontline USFS employee I know would agree with this post and be equally angry.  In recreation at least, this is an organization that begs and pleads to get a few table scraps left over after the National Park Service is done eating, and it is crazy that they spend the few scraps they get this poorly.

Several people have emailed me this: Apparently the White House web site is asking that you report anyone writing things on health care that don't match the Administration position so the White House can "keep track".

There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care. These rumors often travel just below the surface via chain emails or through casual conversation. Since we can't keep track of all of them here at the White House, we're asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov.

Wow, "disinformation."  You wonder why people ever listen to those counter-revolutionaries and aren't satisfied with just reading Pravda.

Well, we at the global headquarters of CoyoteBlog Enterprises are certainly happy to help.  I sent them this email today:

Thanks for the opportunity to report disinformation where people write things that don't match what the President is saying on health care.  Please check out this document I found on the web -- a number of parts bear very little relationship, and in fact outright contradict, what the President is promising about health care reform.

The link is to a copy of the House health care reform bill.  If you are so inclined, you might wish to offer similar help.

Postscript: My son, who is a big fan of dystopic novels like George Orwell's "1984" might ask if he would get extra credit for turning in a family member.

Update #1: The White House site in question is really ridiculous.  It responds to critiques of what is actually in the bill with statements like "the President has consistently said that if you like your insurance plan, your doctor, or both, you will be able to keep them."  Well duh, of course he has.  But this President, even more than the average President, will say just about anything.

At this point, since the President is purposely uninvolved in the crafting of the legislation and has admitted at times that he doesn't even know the details of what is in it, talking about his promises or preferences is irrelevant.   In fact, nobody is talking about the President's promises and intentions any more, with actual legislation on the table.   They are talking about what is actually in the written bills in the House and Senate.

So the question is, what is in the actual legislation, and does it match Obama's promises, and the current answer is clearly "no."  And will the President veto a health care bill that doesn't follow through on his promises?  Don't make me laugh.  He is going to sign any bill with "health care" in the title no matter what it says -- his advisers have already made that clear by saying that the entire Presidency is riding on having some kind of bill pass that does something with health care.

By the way, in this we can see the White House strategy for passing such controversial bills.  Their hope is to jump directly from the President's "everyone is a winner and there is no cost" rhetoric directly to signed legislation.  They want people focused on his promises, which are enticing, and not the reality of the actual language of the bills, which is ugly and in many ways bear no relationship to the President's rhetoric.  This worked for the stimulus and almost worked for Waxman-Markey and was tried again for health care.

Any person with a room temperature IQ can figure out that the Obama "jobs saved" metric is complete BS, a measure that is totally unmeasurable, and therefore can be set to any value the Administration wishes.

But this is, if anything, even crazier:

How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program's first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state's accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime.

"Sometimes some work for an individual is better than no work," said Oregon's Senate president, Peter Courtney.

With the economy in tatters and unemployment rising, Oregon's inventive math underscores the urgency for politicians across the country to show that spending programs designed to stimulate the economy are working "” even if that means stretching the facts.

At the federal level, President Barack Obama has said the federal stimulus has created 150,000 jobs, a number based on a misused formula and which is so murky it can't be verified.

On a full-time FTE basis, the report figures Oregon has "created"  215 full-time jobs.  They don't even attempt to do the math on how many jobs were destroyed when $176 million was taken from other productive uses.  But does anyone else syspect that the private hands the $176 million was formerly in probably would employ more than 215 people for that chunk of change?

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?

The other day, there was an intriguing story in the USA Today that a disproportionate share of stimulus money is flowing to counties that voted for Obama.  In fact, counties that voted Obama are getting twice as much per capita so far as counties that did not.  Matt Yglesias writes:

The insinuation of the piece is that the stimulus bill's funding streams are being artfully manipulated or something to disproportionately direct resources toward Obama-loving constituencies....[But] the secret to the riddle seems to be that areas that benefit from federal spending formulae tend to support the Democrats. Not as a result of short-term fluctuations in voting patterns or federal spending levels, but as a structural element of American politics.

Kevin Drum misses Matt's point, I think, when he responds:

Actually, that's not quite right.  It's weirder than that.  I just got around to reading the piece, and aside from the factual statement in the lead, it doesn't insinuate that the money is being unfairly distributed.  In fact, every single paragraph after the lead quotes people saying that there's nothing dubious going on and the money is just being distributed by formula.  The piece doesn't quote a single person, not even Sarah Palin, suggesting that there's any monkey business going on here.

But this does not refute Matt's point as I understand it, that "tinkering" is not necessary because the formulas themselves have been worked over time to preferentially send money certain places.  I would use the analogy that there are well worn channels where the money preferentially flows.

I must disagree that a story that money tends to flow preferentially (on a ratio as high as 2:1) to Democratic districts should be spiked, as Kevin Drum advocates. I think there is a story in this, though certainly I agree with Kevin it is not the story the author set out to write (one of micro-manipulation by Administration employees).

My sense is that the causality involved would be impossible to discover. Does money flow preferentially to these districts because Democrats are better or more focused on bringing home the taxpayer largess to their districts? Or does our money preferentially flow to these districts based on, say, economic or demographic factors that line up well with Democratic constituencies. Or is it, more likely in my mind, a virtuous circle with both factors involved.

Either way, this is an interesting story and some interesting new data in our endless red state-blue state analyses.

Meddle in the economy too much, and investment dries up as entrepeneurs sit on the sidelines to see what's next:

"America isn't hiring precisely because of government policy. Small business owners, who are usually the first into and the first out of the job pool, are standing by the fence and watching. They are paralyzed by regulatory uncertainty. If they hire someone who ends up doing poorly, will they be able to fire that person? Will they have to pay their health care bills after they've been terminated? If so, for how long? Who will pay for all these stimulus checks? If it will turn out to be small business, why would they hire instead of keeping costs low to prepare for the big tax bill? Where will the market move? Are you in the right business or are your clients in a politically disfavored industry? . . . Jobs aren't languishing despite the government's best efforts. They're languishing because of them."

Via Glenn Reynolds

Having lobbied hard for the stimulus bill with the expectation they could get some extra local spending without the political cost of having to tax the locals more to pay for it, Americas mayors find they in turn got played:

President Barack Obama is facing complaints from big-city mayors and county politicians that parts of the economic stimulus package are shortchanging their constituents.

Vice President Joe Biden has been holding private conference calls on the stimulus with elected officials from around the country, some of whom have been telling him that metropolitan regions are losing out to rural areas in the competition for stimulus money.

That argument tracks a report released by the U.S. Conference of Mayors that concluded that cities have gotten a disproportionately small share of stimulus money set aside for road and other transportation improvements.

I thought the following was particularly hilarious.  It appears that the mayors have abandoned progressive tax policy in favor of a more classical notion of fairness:

The mayors commissioned a report looking at a pot of $18 billion set aside for transportation. When the report was released this month, the 85 most populous metropolitan areas had received $8.8 billion - or 48 percent of the total. Yet those same areas account for 63 percent of the U.S. population and 73 percent of the gross domestic product, the report said.

Chicago would need to get another $250 million in stimulus transportation funds to reach a level that reflects its contribution to the Illinois economy, the report calculated. In Ohio, Cleveland and Cincinnati account for 40 percent of the total economy yet received less than 5 percent of the transportation stimulus funds earmarked for the state.

I am sure the richest 10% who pay the vast majority of the taxes will be happy to know that the mayors are now advocating that stimulus money be spent in proportion to how people contribute to the economy.  Yeah, you can hold your breath for that.  It turns out that progressive redistribution is only a good thing if you are on the recieving end.

Via John Stossel, this is hilarious form Onion TV.  I think this has been around for a while but it could have been written for the Stimulus.

This should really get your blood boiling, from Tom Coburn's office (pdf).  I am still perusing it, but two of my favorites already:

• $1.445 million for an Oklahoma water project, where stimulus-required procurement and other rules subsequently increased the cost of the project by $1.94 million.  So the local folks lost a net of $500,000 by taking our money.  Serves the right.
• $800,000 for a backup runway for the now famous airport to nowhere, also known as the John Murtha airport in Johnstown.  This is critical, because if they were to lose their current runway, all three flights a day and 20 daily passengers (I am not kidding) might have to find an alternative airport.  This brings the total airport subsidy to $15,411 per annual passenger.
• A California skate park will get a $620,000 "facelift."  Plans to refurbish the skate park in Long Beach, California, had stalled for months as local funds put towards higher priority park projects. With $620,000 in federal stimulus funding available to upgrade the skate park, the city council decided to move forward. Daniel Johnson, a skater, said, "If most of us weren't skating right now, we'd be doing some bad stuff."  Because nothing says "gateway activity to adult productivity and preparation for the job market" like a skateboard park.

Obama and Congressional Democrats seem to have hit upon a way of helping the unemployed that is even more expensive than Welfare.  Many of the stimulus-related jobs programs turn out to spend millions of dollars to preserve just a few jobs.  Their only net benefit is to politicians -- by making certain preferred corporations the intermediary for these funds, these corporations will in turn line politicians' campaign coffers with money, something welfare recipients were never very good at.

A good example is the ongoing fight by Congressman Maurice Hinchey to force the Obama Administration to accept a new helicopter as part of an $835 million dollar program that supports 800 jobs in Mr. Hinchey's district.  TJIC has a very apt counter-proposal:

Instead of spending $835 million, why not just cancel the program and hand each of the workers a $500,000 check with the memo line "welfare - because you produce something no one wants" ?

That'll put food on the table of these 800 workers (for a decade), save us $435,000,000 and maybe teach 800 workers and 1 Democratic politician something about economics.

Yes, but Travis, in your model, who is going to write checks back to Mr. Hinchey?

If I have not been convincing enough, Q&O has more on why you really, really should be planning for inflation.

The answer to all of Obama's spending in trillion dollar chunks is obvious.  All we have to do is make our currency work just like that of Zimbabwe, and we will be fine.  We could pay off a trillion dollars with 10 bank notes (I bought just one the other day on eBay for $30 or so).

The problem, of course, is that this is what the Obama administration actually appears to be doing.