Saturday, February 11, 2012

How the Stimulus Fell Short -

How the Stimulus Fell Short -
"... The stimulus — a historic package of tax cuts, safety-net spending, infrastructure projects and green-energy investments — certainly did a lot of good. As the economists Alan S. Blinder and Mark Zandi have noted, it’s one of the key reasons the unemployment rate isn’t in double digits now.
But the stimulus ultimately failed to bring about a strong, sustainable recovery. Money was spread far and wide rather than dedicated to programs with the most bang for the buck. “Shovel-ready” projects, those that would put people to work right away, took too long to break ground. Investments in worthwhile long-term projects, on the other hand, were often rushed to meet arbitrary deadlines, and the resulting shoddy outcomes tarnished the projects’ image...."
Fred Leeb: I find it ironic that after spending $840 billion we now may be concerned about whether these programs accomplished anything. I also find it interesting that it takes the NYT Sunday Review to consider the concept newsworthy that the government should generate a significant return on its investments.
I think one of the biggest failures of government is that this simple business concept (return on investment) is barely an afterthought. It is a tragedy that the US government collected and spent almost a trillion tax dollars, generated by millions of people working very efficiently and very hard to provide, without a clear idea of the projected benefits.

People need to ask what it means in the first place for the government to create jobs. There is a big difference between jobs for government employees and jobs that are created due to a nurturing environment for the private sector. For example, some of this money could have been spent on improving government decision-making, developing multiple-year growth plans, consolidating and rationalizing government entities, making government more efficient, providing venture capital, jobs training, adding funding for community colleges and public schools, etc. Programs like cash for clunkers did bring forward car sales, causing lower car sales immediately thereafter. Temporary jobs repaving roads were just that, temporary jobs. We must make the government much more accountable before the dollars are spent.