Like Daniel Gross, I get the impression that people, including many journalists, just can’t get their heads around the stimulus.
Now, it is an $800 billion program, so it’s an awful big thing to grok. But if you boil it down to the basics, it’s actually pretty simple. Gross pretty much does that with a brief explainer at Slate that ought to be useful for journalists whose reporting touches on that gargantuan program.
There’s been a general misimpression, fed disingenuously by the plan’s political opponents, of course, that the stimulus “was” a giant waste of money since the economy continued to spiral downward for months after it passed in February (never mind that the money spent already has had a positive impact, even if it’s not the 2 to 3 percentage points of GDP the administration claims).
See the Drudge-flogged, slap-your-head-stupid line by casino billionaire Steve Wynn:
Government has never increased the standard of living of one single human being in civilization’s history. For some reason that simple truth has evaded everybody.
Tell that to all the old folks saved by Social Security. Or, say, the Europeans after the Marshall Plan. You know the paved sidewalks and roads in Las Vegas and Atlantic City seem to raise standards of living there.
Mr. Wynn, of course, sings a different tune when it comes to corporate welfare. Maybe for the sake of intellectual consistency, he’d like to pay back the $270 million spent by New Jersey taxpayers to build a tunnel to his white-elephant Atlantic City casino. And speaking of chutzpah, you think a one-armed-bandit purveyor like Steve Wynn has had a net positive impact on people’s standards of living? I don’t.
But it’s not just corporate-welfare hypocrites not getting it. The press has sometimes whiffed, too. Gross points to a Washington Post editorial yesterday that wrongly implied that nearly half of the stimulus money had already been spent.
The truth is, as Gross points out, is that less than one-quarter of the $787 billion has gone out the door, and most of that went to tax cuts (which the left says, with reason, were less stimulative than spending since they were likely to be used to pay down debt rather than spent) and bailing out state governments.
But I think Gross glosses over a legitimate criticism of the actual legislation, saying that it “intended” to spend the money over a few years. Another way to say that is that it intended to spend the money “slowly.” (The Journal got spun on this by Obama in July.)
He notes that infrastructure spending and the like—the real stimulative spending—take a while to ramp up:
In other words, nearly eight months after its passage, a large majority of the stimulus has yet to start impacting the economy—as was the plan. And as was also the plan, the most visible parts of the stimulus are only taking effect now and will remain active through 2010.
Right, but the bill passed eight months ago. Lots of people have lost their jobs since then. Lots have lost their homes. Had the stimulus been more front-loaded, we’d have a lower unemployment rate now.
And is it that hard to create instajobs? There sure are a lot of run-down schools that need patching. Poor neighborhoods with houses that need painting. Parks that need picking up. Grass that needs mowing. Trees that need planting. Kids that need tutoring. Graffiti that needs removing. And I’m just thinking out loud (on paper? in 1’s and 0’s?) here.
Sure, a lot of that’s busy work, but it might help meliorate a worsening recessionary “broken window” effect while keeping people in jobs and satisfying Keynes’ requirements, which were after all, pretty lax—not to mention keeping them off unemployment or welfare where you get nothing out of them.
But Gross is mostly dead-on here. When John Boehner can get by with saying something like “you can’t spend $800 billion of taxpayer money and not create jobs when you say that’s what the goal was,” it’s good for the press to point out that you can’t spend $800 billion of taxpayer money and not create jobs if you haven’t, you know, spent but a fraction of that $800 billion of taxpayer money yet.
Reporters should keep that in mind as they cover this multi-year story. When the stimulus bill was passed, its proponents were planning for a long, hard economic slog. They got that part right.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.