We already know that much of the so-called stimulus was not stimulus at all. A lot went to simply bolstering falling state revenues to put off their declines. One might argue that investments in research and technology have an economic payoff. But even the most ardent Keynsians has trouble arguing that pure transfer payments are an economic stimulus, especially when they’re mainly shoring up unemployment benefits.
But more and more info is coming out about the money that wasn’t just used to bail out the states. Here’s the latest:
Federal audits are turning up misspent taxpayer dollars in a $5 billion stimulus program aimed at lowering the utility bills of disabled, poor and older Americans by making their homes more energy-efficient.
In West Virginia, which received $38 million in weatherization funds, some of the money went for lobbying, to consultants who did little work and to recipients with connections to state officials who are doling out the funds, the Energy Department’s inspector general found.
In one case, West Virginia paid $25,000 to a lawyer for writing two sentences stating that weatherization contracts had been reviewed, reportedly after four hours’ work at a state office, according to a report analyzing how the federal stimulus money was used. A $20,000 consulting fee was paid to the former director of the state’s weatherization program after he left the job in May 2009 even though there were no specific work requirements set for the consulting contract.
I realize that to the true Koolaid-drinkers, none of this matters. Every dollar is a stimulating dollar, whether it’s wasted on a lawyer writing two sentences or used to fund energy research. But those of us with at least one toe in reality have to be angry about this. The Energy Department’s inspector general has warned that the weatherization program has little oversight, no internal controls and no accountability. Even if you think that weatherization is going to stimulate the economy, that’s $5 billion we might as well have set fire to.
It’s not like accountability in spending is a big mystery. The science community has been doing this for years. Right now, one of the most potentially important scientific missions of the next decade — JWST — is in danger of getting the budget axe. That’s because someone actually looked to see what was going on with the taxpayer’s money. Some branches of the government do this all the time. But with the stimulus, we decided that accountability meant nothing — spending as much money as possible, no matter what, was the important thing.
In this sense, Keynsianism can claim something in common with communism. Even if you were to concede that it works in theory (ahem), it has serious problem when you try to practice it. Small directed government programs can be managed, controlled and rendered accountable. Big huge unabashed spending initiatives can not be.
And while I’m up — let’s stop pretending that we’ve “only” had $787 billion in stimulus spending. We’ve racked up $4 trillion in deficit spending in the last three years — double what the Keynsians assured us we needed. The more we learn about the stimulus, the clearer it become that there really is no difference between “stimulus” spending and just plain spending. Why are we pretending otherwise?
Update: Oh, yeah. The stimulus also helped pay for Project Gunrunner