STIMULUS BILL WASTE

A front page story (with color picture) in my local newspaper has done real damage to the Curmudgeon's blood pressure. "SIGNS OF WASTED STIMULUS?" reads the headline. The AP story, backed up by the paper's second editorial on the subject in a week, takes the Obama Administration to task for the "Project Funded By" signs going up at stimulus money projects. Here's a sample of today's editorial:

Last week we complained about use of taxpayers' money to erect gigantic signs at sites where projects funded by federal "stimulus" money are in progress. The signs are a blatant attempt to gain votes for President Barack Obama and members of Congress.

Each sign costs between $500 and $1,200, according to the Associated Press. We are not the only party to have pointed out that the money could have been put to better use.

Now, the signs themselves don't mention the President or any member of congress. Signs headed "Your Tax Dollars at Work" have graced the sides of West Virginia highways and interstates for years. They DO mention the Governor. Thus, making the "Propaganda" argument, as the paper does, is really just sour grapes by the side that lost the last election. It's the second reason, "that the money could have been put to better use," argument that has me steamed.

The stimulus money is intended to stimulate an economy that has "locked up."

1. Banks are not lending.
2. Businesses are not selling products.
3. People and businesses are not buying goods or services.
   
4. Workers are being let go.

Now, we can argue all day and night about whether the government can or should act to try and restart the frozen economy. The $780 billion stimulus package is a fact, though, so lets deal with what is, not what we wish was. The government can effect each of the four areas, each in different ways.

In order to effect number 1. the government could inject money directly into the hands of people and businesses. Cutting taxes seems to be the preferred method on the right, but since, contrary to the conservative conventional wisdom, this will result in lowered government revenues, it won't help the problem. The stimulus bill does, I think, provide for $400 to $800 payments to taxpayers which may help, but because of number 4. above, that really can't do much long term. If you're afraid of losing your job you don't go buy a new TV with your $800 check. It is also impossible to funnel enough money into peoples hands to have much of an effect. There are too many fairness questions. Them that don't pay any taxes shouldn't share. Socialism you know. And we don't want to give any money to those who don't need it.

The government can effect number 4. by simply hiring people to work for the government. If one listens to those on the right, this is the "real" intention of Obama and his liberal government. Make everyone a government employee, dependent for their livelihood on the Democrats for ever and ever. This does not seem to be the intent of the stimulus bill here in the real world.

Now number 2. The government of George Bush attempted to goose the banks with the TARP bailout fund. We don't know where the money went, but it didn't seem to make it to Main Street. The Federal Reserve has also tried giving a boast to lending by keeping interest rates low. Still no help.

It seems that the only way to stimulate the economy that might work is to get businesses to start selling products and services again (number 3.). The government, thus, needs to BUY things. Like road and bridge repairs and SIGNS.

The signs are made of aluminum and are hung on steel posts with steel bolts. That means both the steel and aluminum industries benefit. The signs are painted and coated with products of the chemical industry. Someone at a desk and computer designed the signs. Someone else made the presses that were used to stamp out the aluminum blanks and someone else maintains and repairs those presses. Someone makes the actual wording graphics and yet another someone puts the graphic on the sign blank. Packaging and shipping involve yet more people. And as each of those folks receives wages or profits in the making of signs they in turn spend those wages at the grocery or the dentist or McDonald's. The economy is an interconnected whole.

There are 4,840 highway projects being funded by the Recovery Act. If each one uses just one $800 sign the cost is $3.9 million. Is this a "waste" of stimulus money? As we can see, this money gets into the hands of people and businesses and will be used to pay even more people and businesses and so on. The money will "stimulate" activity in the economy. Is this stimulus not as good as the $15.4 billion for highway projects that it's a part of? Concrete and asphalt good. Aluminum and steel bad. Can we pick and choose like that? Should we?

You see, there's really no such thing as bad or wasted stimulus money. There are only projects and products that we don't like. Yes, the direct building costs of these highway projects are an investment in the nations infrastructure, but benefiting the sign industry and all the related industries is not a waste of money. Just as funding volcano monitoring isn't a waste of money if you live near a volcano. Hurricane hunter aircraft? Not much use in Indiana but pretty important on the coasts. Stimulus money is intended to stimulate. I for one don't care where it goes, so long as it's spent in the U.S.A. So come on, stimulate us!