In January I strongly wrote against newly sworn in President Obama's stimulus plan presented to Congress (Stimulus? Try Democratic Pork) and the $825 billion proposed spending. I am proud that Congress listened to me and paired down the final spending for the American Recovery and Reinvestment Act (ARRA) all the way down to $767 billion. Presented to Congress and the American taxpayer as a bill that would stimulate the economy by providing funding for jobs that would provide jobs and concentrate on "shovel ready" infrastructure projects, the final bill seemed to ignore the premise with many spending items shoved into the hastily crafted bill that have no longer impact on the economy, nor have any business receiving federal funding. The final bill actually extended the reach of the federal government, extending payments to those already receiving federal assistance and expanding the number of eligible recipients. Right out of the box the Act spent billions of tax payer funds on programs that would have zero impact on our economy.
The basic premise of the ARRA is that the government can spend money and pull America out of a recession. By taking more tax dollars from one American, washing it through Washington's bureaucracies and then sending what is left to state and local run governments and washing the funds through them to pay for projects, America's economy is better off than allowing the original holder of those dollars to decide where and how to spend or save or invest the money. This premise is incredibly flawed but one that is central to the Democratic economic theory that the more taxes collected and redistributed the better our economy will be. Unfortunately this theory was tried on a grand scale under President Franklin D. Roosevelt and failed to help the country out of the Depression, even more unfortunately is that today's politicians currently in the majority in Washington D.C. know nothing of history or economics. Governments cannot spend taxes from one segment of an economy to stimulate the entire economy, trying to do so worsens or lengthens recessions, or if in recovery leads to severe debt, higher interest rates and inflation when the recession ends. Look for the latter to come to America starting in 2010.
Locally, for me, in Long Beach, California there is some hand wringing and whining because of a report issued earlier this month from Senator Tom Coburn of Oklahoma. "100 Stimulus Projects: A Second Opinion" lists the top ten projects receiving ARRA funding that Coburn considers a waste of tax payer dollars, leading the list is a project in Coburn's home state for a waste-water treatment plant. The town already planned to build the project and applied for funds to help. In receiving $1.5 million in funding the town was ready to go, it was a "shovel ready" project. Unfortunately the funds also came with federal strings to the project that add 25% to the total cost of completion and increases the local residents utility bills by 60%. Thanks for applying.
What causes many in Long Beach to be upset with Coburn is listed at project number 96 is $620,000 for a skate park in our fair city. The skate park in question is already in existence in a park that is located in one of the poorer parts of the city where there are gangs and high crime. Local politicians and "community leaders" decry a Senator for Oklahoma of all places (the ignorance of bigotry rearing its big head) saying our city does not need this skate park! A meeting is being held! We need this skate park! All this is quite amusing in that, a) the funds have already been secured evidently so the funds will be coming anyway b) the City of Long Beach previously pulled funds for the skate park from the budget to zero complaints from any locals c) members of the Obama administration are on record as agreeing somewhat with the Coburn assessment saying the feel the project is not in the spirit of ARRA and d) the skaet park already exists! Yes the skate park that is receiving $620,000 in federal funds already exists, the money is not to build the skate park, but to make it more skate-parking with better ramps, bumps, and whatever will go into the design. This is not a waste of federal funds?
In the on-line and in bar conversations on the project I have asked two questions again and again and never received any answer: 1) How many jobs will the spending of the $620,000 create? 2) How long will those jobs last? Being asked by others is why it is costing over half a million dollars to pour some asphalt and shape it into humps, but that is for others to ask.
So why is a skate park renovation worthy of federal dollars when the local government deemed it not worthy of local dollars? Why the uproar? Half the people spewing venum at "that Senator for rural Oklahoma" on the blogs and comments of local websites have no idea the skate park already exists. My feeling is they see (R) after Coburn's name and therefore he must be bad, especially because he is from backward, hickville Oklahoma. But is this project really worthy of federal funds? Does it create jobs? Does it stimulate the economy? How many of those complaining about what Coburn as said have actually read his report? I have and here is a random sampling of projects that most people in Long Beach who support the skate park would (or should) decry as a waste of their tax dollars:
$150,000 for road signs in Illinois to announce that projects are paid for by stimulus funds--tax dollars to pay for signs to tell tax payers their taxes are being spent.
$5.5 Million to pay for a new factory in Georgia that will close a factory in Dayton and cost that town 1,200 jobs. Creating jobs by helping a corporation move and lay off currently working Americans. Your tax money going for more corporate welfare and costing Americans jobs.
$628,100 to Yale University, which has an endowment of $17 Billion to study if diet and exercise affect obesity.
$300,000 for a parking lot in a town in North Carolina that was in the local budget and ready to go. How many jobs does building a parking lot create? More or less than the amount needed to renovate a skate park?
$2.5 Billion for rural broadband, the funds going to the Rural Utility Services (RUS), which the Inspector General says is inefficient and wasteful in its use of funds--according to the Inspector General since 2005 90% of the loans approved by RUS have gone to communities that already have broadband.
$4.2 Million for Seapoose, Oregon (pop 6200) to raise the local railroad tracks eighteen inches to be level with the main road, despite local voters rejecting a bond measure to pay for this project--not good enough for local funds to be spent but good enough for the rest of America's taxes to be spent.
And on and on the list goes. Coburn picked just 100 of the projects in the ARRA totalling approximately $5.5 billion, and is taking heat in Long Beach and other communities across the country looking for the federal hand out. But if we look at what Coburn is saying in his report, as a United States Senator worried about American tax dollars and future debt obligations, he is right. The American Recovery and Reinvestment Act is $787 billion of wasteful government spending that in the end will create over $1 trillion in debt so skate parks and road signs and parking lots across America can be built. Beyond the actual funds being spent it is estimated that $55 billion will be lost in waste, fraud and abuse, not bad for a government program at less than 10%, but $55 billion nonetheless of your tax dollars being lost. According to Vice-President Joe Biden in early June, "Some people are being scammed already." I agree with the Vice-President, the scam started when the bill was passed, shoveling $620,000 to my city for park renovations just adds to it.
Is this the purpose of our Federal Government?