Shovel-Ready Stimulus Sightings


Tuesday November 16th, 2010   •   Posted by Robert Higgs at 4:31pm PDT   •  

A funny thing happened on the way to the voting booth: Americans discovered that most federal “stimulus” funds were being used to stimulate government, not the economy.

I was on the road recently, driving from my home in southeast Louisiana through a long stretch of Mississippi to Tuscaloosa, Ala., then to the outskirts of Birmingham and on to Auburn, Ala., and finally back to my home by way of Montgomery and Mobile. Along the way I was slowed from time to time as I passed by road and bridge repair projects marked with prominent signs indicating they were funded by the American Recovery and Reinvestment Act, President Obama’s so-called stimulus bill.

Naturally I was thrilled to see my tax dollars at work, although honesty compels me to report that not much actual work seemed to be going on at any of the sites. Most of the visible workers were just standing around. Of course, such standing around is typical of public construction projects, so I don’t suppose that what I saw was in any way owing to the stimulus funding in particular.

This huge legislative enactment provides for a great variety of increased spending and some reduction in taxes over a period of 10 years. The Congressional Budget Office computed that the net amount of money to be injected into, or not removed from, the economy as a result of the stimulus bill totals about $787 billion.

At the time the bill was being debated and discussed, a common plea in its defense had to do with funding so-called shovel-ready projects to repair or replace public roads, bridges and other structures widely taken to be in a state of decay or disrepair. This plea made an appealing talking point, since most Americans place at least some value on such infrastructure.

Alas, only a tiny proportion of the funds expended so far has been directed to this well-advertised objective. According to the government’s website for tracking stimulus expenditures (Recovery.gov), as of October 27, 2010, $464.2 billion had been made available to a long list of government agencies and $317.8 billion had been spent.

Of the total amount disbursed, 70 percent had been spent by three departments: $91.9 billion by the Department of Health and Human Services, $65.0 billion by the Department of Education, and $62.6 billion by the Department of Labor. The Department of Transportation’s outlays came to just $21.6 billion, or 6.8 percent of the total. . . .

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