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Wednesday, January 28, 2009

Stimulus Bill: Who Wants To Waste It Up?

You want a good way to waste a lot of time by way of self-tourture? Read all 647 pages of the "American Recovery and Reinvestment Act of 2009," brought to you by YOUR 111th Congress!

A lot of stuff is floating around in the media about the ridiculousness that is floating around in this $1 TRILLION bill (for example, $335,000,000 for STD prevention given to the Center of Disease Control and Prevention--call me crazy, but the Center of Disease Control doesn't stimulate much of anything at all, let alone the economy), but just this little item on page 11 completely floored me:

SEC. 1108. APPROPRIATION FOR GOVERNMENT ACCOUNTABILITY OFFICE.
20 There is hereby appropriated as an additional amount
21 for ‘‘Government Accountability Office—Salaries and Ex22
penses’’ $25,000,000, for oversight activities relating to
23 this Act.

Yes, you read that right. $25 MILLION just to make sure the money in this bill is being spent right. $25,000,000. Twenty....five.....MILLION.

You don't think there's a consulting firm out there that could do this work for 1/8th of this amount? Not to mention that a consulting firm will not be made up of partisan appointments to the leadership and staff?

Sweet Christ, Heavy Soul would be happy to make sure the money that is earmarked is going to where it's supposed to go in a timely matter for, like, a couple of grand!

And think about it from this aspect: our government is so fundamentally flawed that even when they are spending $1 trillion (that we don't have, by the way), they know it's going to be screwed up so they go ahead and throw in an extra $25 mill just to set up yet another government office to make sure the money gets spent.

OUR GOVERNMENT DOESN'T EVEN KNOW HOW TO SPEND MONEY!

Do you realize how much money is being spent here? It basically comes out to be around $10,000 per household in the United States.

There are so many flipping earmarks in this bill that a ton of this money is going towards programs and causes--that is insane.

Why don't they send this money out so it actually STIMULATES THE ECONOMY? Why can't they do something like send $500B to the states for infastructure projects, and then take the other $500B and send out tax rebates? Take $250B and send out tax rebates to the people, and take the other $250B and waive corporate taxes or something for a few months.

That's a shaky plan, sure, but I just came up with it. And that's the problem with the ARRA: so did they. And the Obama Administration is using the same damned tactics the Bush Administration used to push through their agendas--by using terrifying language that scares the shit out of everybody, which leads to "plans" like this getting shoved through without debate or concern as to what is actually hidden in this bill. Yeah, that's right, I compared Obama's administration to Bush's administration. Turns out that Obama was impressed with how Dubya got things done around Washington. "Scare 'em 'till they vote yes! And if you don't like it, you probably don't like people who have lost jobs!"

That's ultimately the point: there's certainly things in this bill that actually will do things to stimulate the economy. But more than anything, this is a vehicle--scratch that, a tank--to hammer through Obama's and the Democrat's agenda as quickly as possible with little to no debate.

I'm 11 pages into this bill, and I already want to lead a revolution. I cannot even begin to imagine what lies ahead in the remaining 636 pages.

"It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood." - James Madison

If this is the "change" that I and so many others voted for, I'm really depressed.

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Comments:
First, the bill is just coming out of the appropriation committees in both houses so they've swelled the total with their own spending. We can argue if that's good spending or not, but blaming Obama for specific allocations isn't really an accurate reading of the process. Assuming it passes the senate, the spending will change greatly in negotiations before Obama ever sees it.

Second, Obama has specifically said he'd like the family planning stuff cut. I'm glad you're picking up a Republican talking point and running with it though. Because they're clearly the people to listen to when it comes to fiscal responsibility.

Third, yes it's an ugly, messy bill filled with pet projects, many of which are simply the Dems trying to right some wrongs of the Bush years (or what they feel are wrongs). That said, it's not easy to spend a trillion dollars and attacking the oversight seems a little silly. After the last 8 years of ignoring and gutting the GAO, why would we want to short change them now? $25 million of $1 trillion is nothing. Nothing. I know it sounds like a lot, but it's not. At all. I'm not being insulting here, but I can't stress this enough. Nothing. Zip. Nada.

Fourth, and this is the key: wherever they spend the money stimulates the economy. There's an argument to be made that they shouldn't use the government to spend the money--and I assume you agree with that--but they key here is to get money into the economy and spending it, even in an organization like the CDC, does that. If the CDC is giving 40 people paychecks, those 40 people spend the money, buy homes, etc. They also provide necessary services while they're at it. Not to mention the funds going specifically to infrastructure. People get paid, they spend the money, and the country gets something out of it.

That said, most of the money is not being spent by the government. Obama has said 90% of new jobs will be in the private sector. Will it happen? Who knows.

The alternative favored by Republicans is tax cuts. Contrast these to spending the money and any real economist will show you why this is a less effective use of money. They are slower and mostly go to savings not spending. $1 trillion dollars in spending is much, much better than $1 trillion in tax cuts if your goal is to stimulate the economy.

So I guess what I'm saying is, you might not like where the money is being spent, but if your alternatives are tax cuts or doing nothing...
 
Nowhere did I say that tax cuts or doing nothing is the solution. Nor did I say that oversight is not needed.

What I did say is that it does not cost $25 million to do this job. The point is it will cost the government $25 million to do this job, when you could hire a successful consulting firm to do it for millions less.

And $25 million is SOMETHING. It's a lot of something. And that's how you know that they've got you--they've thrown around numbers like this for so long so casually that everyone says things like "$25 million is nothing."

You know what $25 million would do in a year? Pay 595 people about $42,000 ($20 an hour) a year. Ask some of the small towns in Iowa that have lost plants if they think $25 million is a lot.

You think this new branch of government is going to employ 595 people?

Ad-rock, it's entertaining to me that anytime I point something out that is ridiculous, you say that I'm taking a "Republican talking point" and running with it. Who cares what it is? Who cares if that is where I got that from (which it's not, I got it straight from the bill)? Is it going to stimulate the economy or not?

(And for the record, I don't trust anyone in Washington when it comes to fiscal resonsibility.)

Are you telling me that giving one organization $335,000,000 is going to stiumulate the economy more than, say, the State of Nebraska spending $335,000,000 on contracts? You could get 16 or 17 MAJOR projects out of that sum of money, with each project employing hundreds of people.

Lastly, you are correct that you cannot blame Obama on specific allocations made in this bill. He didn't write it. But he is the one who is selling it. He is the one saying that this bill needs to be voted on yesterday because the whole world is going to implode if it doesn't get through immediately.

I don't make the stuff I sell, but you better damned well believe that if it isn't in good shape when the customer gets it, I'm the one that is blamed for it. Ask your brother about that, he would tell you the same thing.
 
I would feel more comfortable with you providing a source for your mythical consulting firm that will do this work for less than $25M.

I suspect the number is quite a bit higher than this.

In context, $25M is 1/4 of one basis point on the total amount. In general I think you could expect to spend 10 - 15 basis points if you hired an investment manager to handle your money.
 
Roll Call: Raise your hand if you know how to speak in BPS talk....aye
 
Okay - So I used silly language. Point being consulting engagements of this type would generally be priced in relation to the size of the asset pool. So you need to look at the dollar amount in the broad context of the stimulus bill.

If anything, the amount seems troublingly low -- not high.
 
I guess I don't see the difference between giving the money to the CDC and giving it to the state of Nebraska. I'm definitely not an expert on these matters, but, outside of having some ideological preference for state government agencies over national government agencies, what difference does it make?

We could guess Nebraska would spend it better, but nothing about the Unicameral and Heineman's drive to ban abortion and reinstitute the death penalty this term leads me to belive the state government is going to be any more responsive or less partisan than the federal when it comes to dealing with an economic crisis. If anything, they'd use that money to fund more tax cuts which, as I said before, would be stupid.

That said, a lot of the stimulus money is being funneled through the states, especially for road projects. Nebraska just isn't very high on the list since our economy isn't doing so poorly. Google any state name and 'stimulus money.'

Look, I think we both would like as much money as possible to go to worthwile projects that benefit the national infrastructure whether that means roads, energy, or whatever. Those things continue to help business long after the money is spent and jobs are created. I have no doubt that is what we'd have if Obama were king. Fortunately, he's not, but in this case it means a lot of b.s. from both sides whether an insane insistence on more tax cuts from the right or government programs from the left.

G.A., I didn't mean to suggest you were in favor of doing or not doing anything, but I think it's clear at this point the options are spend, cut taxes, or do nothing. Economists appear to be pretty solidly behind spending with most even suggesting we're not going to be spending nearly enough.

I will now try to refrain from posting for everyone's benefit.
 
Speaking of stimulus, I need a job pretty badly at the moment, so any help would be greatly appreciated from any of you folk.
 
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