The Fifth Anniversary of the Greatest Pork Giveaway in U.S. History – The Stimulus
February 25, 2014
This past week marks the fifth anniversary of the “stimulus.” The stimulus was the first major bill pushed by President Barack Obama after took over the White House. With the help of a Democrat controlled Congress, he signed the plan into law just a few weeks into his presidency. The stimulus program was sold to Americans as a response to the severe recession and skyrocketing unemployment. This was to be measured by the benchmark of “saving and creating” jobs by pumping money into the economy. The original price tag of the measure was $787 billion, which was later revised upward to around $830 billion.
At this time five years ago, the unemployment rate was 8.3% and would climb to a high of 10.0% just months later. Now it stands at 6.6%. The stimulus had promised to bring unemployment numbers down much faster and lower than what happened in reality. A number of economists look past the unemployment rate to a different figure the Bureau of Labor Statistics calls “U-6,” defined as the “total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers.” The figure accounts for the unemployed, the underemployed and discouraged workers who have stopped looking for a job altogether — a rate that still remains high at 12.6% in January 2014.
Putting the numbers aside, according to a recent Gallup poll, many don’t believe the stimulus has worked: “Americans have a new No. 1 problem. Nearly one in four Americans mention jobs and unemployment as the most important problem facing the country, up from 16 percent in January.”
It’s not only the jobs which haven’t materialized, but much of the money appropriated was wasted. Sen. Tom Coburn, R-Okla., and Sen. John McCain, R-Arizona, issued Coburn and McCain their “Summertime Blues” report, which is subtitled “100 stimulus projects that give taxpayers the blues.” Their report cites some 100 cases of wasted stimulus money. The senators report that "misdirected government spending" has actually hurt small businesses in some cases by pulling them away from more productive activity.
The top 10 most wasteful projects, according to the senators' report:
1. Over half a million dollars was spent to replace the windows in a visitor center at Mount St. Helens, WA. The center closed nearly three years previous due to lack of use.
2. Three-quarters of a million dollars went to the University of North Carolina at Charlotte to create a computerized dance-choreography program. The university's overhead is 44 percent of the grant, the report stated.
3. $62 million was allocated for the North Shore Connector, which provides light rail transportation to a casino and two sports stadiums in Pittsburgh, PA. In February 2009 Gov. Ed Rendell, a Democrat, called the project a "tragic mistake."
4. $7.3 million for the construction of two fire stations in San Antonio, TX. The senators report the city was about to build the stations itself when the federal funding came along. Since then, compliance with federal regulations has caused so many delays no one is sure now when the stations will be built, they say.
5. $1.2 million was set aside to convert an abandoned train station into a museum in Glassboro, NJ. Federal authorities provided $250,000 to buy the structure in 2002, but little or no work has been done there. Now they're going to invest another $1 million to change the graffiti-riddled station, which was built in 1860, into a "museum and welcome center."
6. Nearly $2 million is going to the California Academy of Sciences to send researchers to island in the Southwest Indian Ocean and to East Africa to photograph ants. The pictures will be posted on a Web site devoted to ants.
7. A $1.8 million road project in Ohio is being built so close to a pastor's house that it has cracked his foundation, and a massive crane has struck his front porch twice.
8. In 2004, the federal government provided $661,000 to refurbish the old Fitchburg Furnace building in Fitchburg, KY. The treasurer of the Friends of Fitchburg organization, however, says much of that money was lost due to "bad stewardship of money." Now, thanks to the stimulus, the project is receiving another $350,000.
9. In Kern County, CA, the government is investing $308 million for a power plant to "generate more environmentally friendly electricity by capturing carbon dioxide from the burning of fossil fuels." It's hard to see how the money will stimulate the economy … groundbreaking isn't scheduled until December 2011.
10. Folks in Boynton, OK, are perplexed because their town won $89,298 to build a quarter-mile long sidewalk. The new sidewalk leads to a ditch, and replaces one still in good condition that was built just five years ago.
With facts and figures like these it’s no surprise the “stimulus” turned out to be less than stimulating for the economy. In 2012 The American Enterprise Institute did an analysis of the cost of creating each stimulus related job. They found at the time that “without the stimulus, there would be anywhere from 200,000 to 1.5 million fewer people employed right now. That means the current cost-per-job created is somewhere between $4.1 million and $540,000.” Given the median American household income is $51, 017.00 – the government at the very least has wasted tens hundreds of thousands of dollars, and the at the most millions in the name of job creation.