The Corner

Was the Stimulus Wasted?

Edward Glaeser has done some work showing that much of the stimulus was spent in parts of the country where unemployment is relatively low. Jared Bernstein’s great comeback is that unemployment benefits — a part of the stimulus Glaeser intentionally did not take into account — went to states with the highest unemployment! Who could argue with that? Bernstein seems to know that something more is needed, so he adds:

The Recovery Act cannot meet the vision of the President and Vice President if we were to limit it solely to projects in states with higher than average unemployment.   Throughout the country, it must make key investments in infrastructure, including not just roads and bridges but transit, high-speed rail, broadband, clean energy, and the smart grid.  And even when it comes to good, old-fashioned roads and bridges, those investments have to be made where they’re needed, not just wherever unemployment is the highest.

Hmm . . . See, I thought we had a regular appropriations process for spending money on infrastructure and energy, roads and bridges. I thought the point of stimulus spending (here defined as spending, not income transfers) was to create jobs. In fact, conservatives argued at the time that most of the spending in the president’s stimulus bill was not about job-creation, but about providing a down-payment on a liberal spending agenda by circumventing the normal appropriations process, where each item taken individually would have faced a tougher road. Bernstein’s excuse-making is a vindication of this argument.

Conservatives also argued that spending on infrastructure would not provide much bang for the buck in terms of job-creation precisely because of the arcane legislative formulas that, according to Glaeser, have distributed the money disproportionately to low-population-density states. It’s high times if you’re a road-construction worker in Wyoming. If you’re a laid-off autoworker in Michigan — well, according to Bernstein, the White House is doing its very best to keep your unemployment checks arriving on time.

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