Will Stimulus Money Create Jobs As Biden Says?

Vice President Joe Biden is now saying the government underestimated the severity of the recession ("We misread the economy"). Who could have known? Actually a lot of people knew and even told him and other government officials so. And Mr. Vice President is also saying the stimulus money is just about to flow in earnest and it will make a big difference.

Oh really?

So let's take a look at the stimulus bill that was passed back in February, $787 billion monstrosity with 1000 plus pages of the bill that no one in the Congress read but passed anyway. (Just like climate bill the House just passed, just like the bank bailout bill that passed last October - no one bothered to read.) Here's a nice summary table by Wall Street Journal, who clearly read the bill to glean out the information:

Getting to $787 Billion - What's In the Stimulus Bill (2/17/09, Wall Street Journal) [warning: the page is very slow to load. If you are impatient it may crash your computer. I was, and it did.]

Here are top 15 uses of money:

• $116,199 million: $400 payroll tax credit for workers earning up to $75,000; married couples filing jointly get $800 for income up to $150,000


• $90,044 million: Federal aid to states for Medicaid spending


• $69,759 million: Middle-income taxpayers get an exemption from the alternative minimum tax of $46,700 for an individual and $70,950 for a married couple


• $40,600 million: Aid to states to balance education budgets, prevent cutbacks and modernize schools

So far, nothing that would stimulate employment.

• $29,000 million: Grants for highway improvements

Good, finally some seasonal/temporary employments! But the rest...

• $26,960 million: Extension of jobless benefits for up to 33 weeks


• $24,749 million: 65% subsidy for laid-off workers to continue paying premiums for former employer's health plan for nine months


• $19,991 million: 13% increase in food stamp payments


• $17,559 million: Incentive payments to hospitals and physicians who computerize medical-records systems


• $17,114 million: Increase in Pell Grant to $5,350 in 2009 and to $5,550 in 2010, and other increases to student aid


• $14,830 million: Increased eligibility for refundable child tax credit, with all income over $3000 qualifying


• $14,225 million: One-time payment of $250 for retirees, disabled people, SSI recipients, railroad retirees and disabled veterans


• $13,907 million: Tax credit of up to $2500 for tuition and college expenses


• $13,143 million: Extending by three years the placed-in-service date for renewable energy investments


• $13,000 million: Funding for 'Title I' education programs for disadvantaged children

Top 15 spendings make up over $521 billion (66% of stimulus money), with only $29 billion going to job creation, albeit temporary. If other spending categories create jobs, it will do so by adding new program administrators here and there.

Let's go down the list. There are an awful lot of "oversight" costs, which I take to be additional administrative costs to oversee the stimulus programs.

Among lesser items, you find gems like these:

• $2,500 million: Broadband grants to rural communities
• $1,300 million: Grants to Amtrak
• $1,000 million: Extra money for Census [which is now taken over by the White House, which may be unconsitutional]
• $650 million: Coupons, education and consumer support for digital to analogue converter box program [this is a double payment, as the original bill more than adequately funded the program till the end of 2009. I wonder where the money is actually going...]
• $500 million: Extra money for women, infants and children (WIC) special nutrition program
• $50 million: Training high-risk youth in construction job skills [Ummm, construction? Don't you think we have more than enough of people with these particular skills?]

My favorite is this one. I don't know what it is but sounds mighty and strong:

• $100 million: Army "warrior transition complexes"

There are numerous construction projects, for sure, of government offices and facilities. If you read through the list, the biggest beneficiary of this stimulus, to be paid by the U.S. taxpayers, is the government.

We may end up like a stereotypical third world where the new, shiny government buildings hover over the dilapidated roads, commercial buildings, and houses. Oh I forgot. Houses owned by low-income families will benefit. So their houses will be in decent shape.

For the rest of us non-governmental and not qualifying as low income family, good luck to us. We will need a lot of it.

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