I Now Report Sightings of Shovel-Ready Projects
By Robert Higgs • Thursday October 14, 2010 6:14 AM PST •
I was on the road a good deal last week, driving from my home in southeast Louisiana first through a long stretch of Mississippi to Tuscaloosa, Alabama, then to the outskirts of Birmingham and on to Auburn, Alabama, and finally from there back to my home by way of Montgomery and Mobile. Along the way, I was slowed from time to time as I passed by road and bridge repair sites, most of which were marked with a prominent sign indicating that funding for the work springs from the American Recovery and Reinvestment Act (ARRA), better known as President Obama’s “stimulus” bill.
Naturally I was thrilled to see my tax dollars at work, although honesty in reporting compels me to add that not much actual work seemed to be going on at the sites I witnessed. Most of the men visible there were just standing around. Of course, such standing is typical of public construction sites, so I do not suppose that what I saw was in any way owing to ARRA in particular.
This huge legislative enactment provides for a great variety of increased spending and some reduction in taxes over a period of ten years. The Congressional Budget Office computed that the net amount of money to be injected into or not removed from the economy as a result of the law’s provisions totals about $787 billion. At the time the bill was being debated and discussed, a common plea in its defense had to do with funding so-called shovel-ready projects to repair or replace public infrastructure — roads, bridges, and other structures — widely taken to be in a state of decay or disrepair. This plea made an appealing talking point, inasmuch as most Americans place at least some value of the services derived from such infrastructure.
Alas, only a tiny proportion of the funds expended so far has been directed to this well-advertised objective. According to the government’s website for tracking expenditures made from ARRA (Recovery.gov), as of October 1, 2010, $452.4 billion has been made available to a long list of government agencies, and $307.9 billion has been spent. Of the total amount disbursed, $88.3 billion has been expended by the Department of Health and Human Services, $63.0 billion by the Department of Education, and $62.5 billion by the Department of Labor. These three departments account for almost 70 percent of the total federal spending so far. The Department of Transportation’s outlays come to $20.5, or 6.7 percent of the total.
Shovel-ready infrastructure projects have evidently proved difficult to find. Small wonder, then, that President Obama recently confessed to having “realized too late that ‘there’s no such thing as shovel-ready projects.’” Despite this realization, the president has not proposed that ARRA be repealed. Perhaps he had other objectives in mind from the start.
Among other leading spenders of “stimulus” money are the Department of Agriculture ($17.5 billion), the Social Security Administration ($13.7 billion), the Department of the Treasury ($7.6 billion), and the Environmental Protection Agency ($4.0 billion). A common element of these government departments and agencies is their shortage of shovels, not to mention shovel-ready projects. They also excel at dishing out subsidies to undeserving but politically potent private-sector recipients and at paying handsome salaries and benefits to drones and wreckers on the government payroll. The EPA also more than pulls its weight in impeding genuine economic progress, by adding costs and risks to all sorts of construction projects and many forms of ongoing production.
So far the National Aeronautics and Space Administration has spent $711.4 million of the more than $1 billion allocated to it. Is it possible to shovel outer space? No doubt the General Services Administration, the Department of Veterans Affairs, the National Science Foundation, the Railroad Retirement Board, and the National Endowment for the Arts are shoveling something. I leave it as an exercise for the reader to ascertain exactly what they are shoveling.
Yet, as I have affirmed, some work evidently is going on in Mississippi and Alabama to fix the roads and bridges. Honest. I saw it with my own eyes.
Tags: Bailouts, Budget and Tax Policy, Business, Economics, Education, Employment, Government subsidies, Labor, Mercantilism, Money and Banking, Nationalization, Politics, Presidential Power, Propaganda, Social Security, Socialism, Taxation, The State, Transportation, Unemployment, Welfare