Streams

Stimulus Money Well Spent?

Friday, February 03, 2012

Michael Grabell, who covers transportation for ProPublica and is the author of Money Well Spent?: The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History follows up on his ShovelWatch reporting with a book about the stimulus plan and what it accomplished.

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Comments [31]

linda from manhattan

great segment -- please have him back!

Feb. 05 2012 01:50 PM
WPA started work in MONTHS not years from "SHOVEL Ready" depends on what you're Shovelling


The WPA hired millions, and got people working WITHIN MONTHS.
WHY - with modern computers - can't we do this NOW ?

Apparently, "SHOVEL Ready" depends on what you're Shovelling!

Why does it take engineers more than a month to evaluate a
project (for example a pipeline) ? THERE ARE LOTS OF UNEMPLOYED
ENGINEERS - HIRE ENOUGH - 24/7 to get the job done in a month
and get those projects that pass STARTED.

Unfortunately, too MANY vested interests have both the opportunity
AND desire to block and delay projects indefinitely until they
get their slice of the pie. THAT is one major reason we don't
build infrastructure effectively anymore and are falling behind
our international competitors.

Almost ANY EFFICIENT new infrastructure project will cause SOMEONE
to lose! New high quality affordable housing hurts current landlords.
Efficient transportation from suburbs also hurts real estate interests
in the center of cities (more supply leads to lower prices).
Automation and improved process productivity reduces the number of
employees needed to do a job. Improved energy efficiency harms
oil and gas companies and electric power companies. Improved primary
healthcare harms the profitability of hospitals and specialists.
Almost ANYTHING worth doing also harms SOMEONE'S financial interests.

ALSO NOTE : The WPA stimulus in the 1930s - if adjusted to the
same percent of TODAY'S GDP - would involve a budget of about
$1 Trillion PER YEAR.

It's far more efficient to HIRE PEOPLE DIRECTLY than to try to
BRIBE and cadjole businesses into doing so. 500,000 a job
is a waste. One could directly hire 10 times as many people.
At $50,000 a job - still generous - one could hire ALL the
unemployed for less than $1 Trillion.

THAT would get the economy restarted. If it also built and
created things of long term value - so much the better.
(But this would no doubt step on vested interests' toes).

(-XB)

Feb. 03 2012 03:22 PM
Jack Jackson from Central New Jersey

Isn't it??? If, rather than give tax breaks and fund 'shovel ready projects', the Obama Administration had gone all socialist for real and just hired people for $50K sinecures, we'd have a negative 5% unemployment rate!

Feb. 03 2012 12:11 PM
Michael Derenze

oops .thanks for the correction sorry.staggering number.

Feb. 03 2012 11:55 AM
jgarbuz from Queens

One Trillion ($1,000,000,000,000) dollars divided by 3 Million (3,000,000) jobs = $333,000 per job.

Feb. 03 2012 11:43 AM
Jack Jackson from Central New Jersey

@MichealD...

You are using a billion not a trillion. Multiply your quotient by one thousand.

Feb. 03 2012 11:43 AM
Michael Derenze from long beach,ny

If i divide 1,000,000,000 by 3,000,000 I get something more like$333.00 not 500 thousand.that number is grossly wrong and should be corrected -if my figures are right .I humbly suggest you check again

Feb. 03 2012 11:40 AM
Jack Jackson from Central New Jersey

Given the pushme-pullyou aspect of American politics, could the stimulus have been designed or implemented any better?

Don't you find it odd, that the GOP who are now making political hay with cries of 'Stimulus!', 'Bail-out!','Deficit!' and 'socialist!' had no problem running up the nation's credit limit? Or is it possible that the President's men were off the mark... Geithner, Summers and Emmanuel failed to measure the scope of dissatisfaction with the Bush Administration's mishandling of the economy and the size of the mandate given the Democrats by the nation in the election.

My opinion, personal savings ought to stand on equal footing with capital gains. Incenting the middle class to save money is as important as 'rewarding' the wealthy for not consuming and can form a larger pool of investable funds. How about this? Tax savings and capital gains as income when the government is in deficit, at half that rate when the budget is in balance.

Feb. 03 2012 11:37 AM

i got a tax break for being in school last year. i hope i get the same this year

Feb. 03 2012 11:34 AM
RL

Jim, just because baby boomers are retiring, a rate higher than retirees ever have, and that will continue, it tells us nothing about the state of the economy.

Feb. 03 2012 11:33 AM
Ian

$500K per job is a non-sensical measure. The money not only resulted in a job - it also produced better roads, better educated kids, etc, etc - whatever it was that the added workers produced.

Feb. 03 2012 11:26 AM
Em

Anyone who thinks we had any alternative to this stimulus is deluded. But we're still forgetting what got us there. What is the point of any of the of this if there has been no meaningful regulation of the financial sector and the remaining risks of hedge funds and high frequency trading which will lead to the next stock market collapse that will make the most recent meltdown look relatively harmless. The addiction of the super wealthy to game-theory/casino economics is far more dangerous in the short term than our national oil dependence.

Feb. 03 2012 11:25 AM
Yoichi Hariguchi

Stimulus had COBRA subsidy (60% of COBRA premium from the gov). It really helped one of my friends. Is it still available?

Feb. 03 2012 11:25 AM
Amy from Manhattan

Why isn't the Obama administration saying all these things? Why aren't they doing better at publicizing the successes their programs have had & countering the Republicans' accusations?

Feb. 03 2012 11:24 AM
Jim from Astoria

@RL -

Please see this chart of labor participation rate at the BLS;

http://data.bls.gov/timeseries/LNS11300000

Feb. 03 2012 11:23 AM

The stimulus package extended and supplemented my unemployment payments. Money that I really needed. Also the package enabled me to sell my deceased mother's home in a short sale without having the difference credited as taxable income, which would have amounted to $175,000, the equivalent to 2 years salary when I was working. The package was a big help, but I wish there was some money allocated to help the newly unemployed start their own businesses.

Feb. 03 2012 11:22 AM
rp from manhattan

Focusing so much on the cost of the jobs doesn't do the program full justice. Much (not all) of the money was used for infrastructure and other CAPITAL investments gave our economy a major capital asset and a resource for future growth. We lived off the capital assets produced from the 30's through the 50's almost until the end of the last century. So looking only at the cost per job does NOT fully assess the value and success of a stimulus program.

Feb. 03 2012 11:21 AM
jason brougham from upper west side

If the stimulus bill cost nearly a trillion, and none of the 2.5 million workers got the $500k, where did the rest of the money go?

Feb. 03 2012 11:21 AM
jaime delio from ellenville,ny

Not fair Brian! You cannot divide money spent by jobs created. you forget the majority of the money was spent on materials. Those materials ordered also created jobs

Feb. 03 2012 11:20 AM
jgarbuz from Queens

I predict that if the unemployment rate goes down to 8% by November, the electorate will give Obama a second term. They won't gamble putting in a different administration if they feel the trajectory moving in a positive direction.

Feb. 03 2012 11:20 AM
Eileen McIntyre from Morganville, New Jersey

Every time I drive on the new road surface on Route 18 in New Jersey, funded by the American Reinvestment and Recovery Act (the signs are posted!), I say Thank You President Obama, this is exactly how I'd like to see my tax dollars spent.

Feb. 03 2012 11:19 AM
Rick from Connecticut

Brian your calculation on the cost per jobs only included the cost per job, but not the materials for solar, bridges, infrastructure,construction etc.

Feb. 03 2012 11:19 AM
Joe from Flemington

Direct effect to me of stimulus money.
My daughter obtained a paid summer internship at Rutgers University who one a grant provided by the stimulus.

This position led to subsquent opportunities. She graduated in May and received a position. The hiring manager cited the skills gained that summer as one of the deciding factors for her hire.

Feb. 03 2012 11:18 AM
Denise Maher from dumbo

I miss the COBRA subsidy! When I was laid off in 2010, the recovery act subsidized my health insurance continuation coverage by 60 percent. At less than $400 for my 3-person family, it was affordable. But that's over, and now, when I was laid off in late 2011, my COBRA payments are back up over $1600 without the subsidy!

Feb. 03 2012 11:18 AM
RL

Jim, you've played slippery with the facts on everyone of your points. 400 jobs would be over 3.5% growth which is way more than "catching up". Manfacturing jobs are growing like they haven't in years. Lots of statics report on the "underemployed" ie. partimers. And I don't know where you're pulling #1 out of.

Feb. 03 2012 11:17 AM
Edward from NJ

Regarding the size of the package, how exactly do you adjust for inflation with all the moving parts? Consumer prices, wages, etc. don't all move in lockstep.

Feb. 03 2012 11:17 AM
bernie from bklyn

why was my previous comment deleted? i brought up the SEC's decision to not penalize the big investment banks and grant them waivers to keep up their criminal behavior.
so, how did the stimulus touch my life? well, here's one way- goldman sachs was able to take TARP money and the free money printed by the Fed that was paid for by MY TAXES to commit fraud and financial high crimes with impunity and with complete government complicity.
http://www.nytimes.com/2012/02/03/business/sec-is-avoiding-tough-sanctions-for-large-banks.html?hp

Feb. 03 2012 11:17 AM
John A.

Was Solyndra the only company of its type to receive funds?
No other solar companies, smartgrid tech, etc?

Feb. 03 2012 11:15 AM
Jim from Astoria

Aargh, the unemployment number is misunderstood. Yes, it could be worse, but it's certainly not good.

1) Participation of workforce continues to drop almost every month lowest in 30 years.

2) Shift from manufacturing to lower paid service jobs

3) No distinction between part-time and full-time jobs

4) Need about 400K jobs a month to start catching up

Feb. 03 2012 11:10 AM
Johnnjersey from NJ

I heard 1/3rd of the stimulus was tax cuts. It was the only way to get R's in Congress on board. Yet they skewer the stimulus all the time. Do they think the tax cuts didn't work? Or was it just the other two thirds?

Feb. 03 2012 11:09 AM
manny from brooklyn

The problem as stated by Mr. Lehrer simply is just WRONG. Its not whether the stimulus created more money, or opportunity, its whether or not top-down Reganomics with Obama's face is effective in quenching peoples need for security.

Feb. 03 2012 11:08 AM

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