I Now Report Sightings of Shovel-Ready Projects
By Robert Higgs • Thursday October 14, 2010 6:14 AM PDT • 10 Comments
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 
Three weeks ago I spotted another ARRA shovel-ready project in northern Mississippi. They were making a new 4-lane highway through a very rural area to replace the hardly used but perfectly functional 2-lane highway on which I was driving. Unlike your experience, I didn’t see any actual workers, but I saw plenty of idle equipment and ARRA signage.
Which brings up a separate issue, how much money is the government spending putting up all of this signage? In addition, I think that they should also print the price of these projects on their signs, because that would help everyone understand exactly how valuable the project is.
RRW | Oct 14, 2010 | Reply
In the 1930s we referred to them as shovel leaners, but I did see some noteable positive results, in Allentown PA
ralph | Oct 14, 2010 | Reply
In a recent interview with the New York Times (published 10/12/10), Obama followed up his shopworn case for federal spending on public infrastructure with a revealing admission:
“But the problem is, is that spending it out takes a long time, because there’s really nothing — there’s no such thing as shovel-ready projects.”
Yet even today (10/14), the White House website assures us that infrastructure spending “can put Americans back to work rebuilding our country.”
I guess pork isn’t the only thing that can be tossed around with a shovel.
Carl Close | Oct 14, 2010 | Reply
Why didn’t you stop by to see me on your way to where the “tusks are looser”, as Groucho Marks would have said?
As you know, “shovel-leaners” were the iconic public face of the Works Progress Administration during the New Deal, which was shot through with favoritism and political corruption. When will the “man-in-the-street” grasp that the Keynesian “multiplier” certainly is less than one and, more likely, less than zero?
William Shughart | Oct 14, 2010 | Reply
We ought to shovel these stimulus packages 6 feet under, where they belong.
D. Saul Weiner | Oct 14, 2010 | Reply
One question I’ve been wondering about in relation to this whole thing, at least locally, is are the signs being placed on projects which predated the stimulus and have they actually received stimulus money? Or are they just going around putting up the signs where any road projects are going on?
I ask this because I’ve noticed the signs on two road projects in my area, one rural and the other on a downtown (very small downtown) street. The project in the rural area has been ongoing for at least a decade so silly me assumed that the funding was already in place long before the stimulus. But there’s the sign. I have no idea exactly what the sign downtown is supposed to represent because as of yet no work has been undertaken. About a mile down the same street some sidewalks were put in last year but at that end is a sign that says “Project paid for by your sales tax dollars”.
Besides, all this discussion of signs reminds me of comedian, Bill Engval’s routine where he suggests handing out “stupid” signs to people who do or say idiotic things. Except of course that the joke is on us in this case.
RickC | Oct 14, 2010 | Reply
Isn’t it obvious that the real stimulus money is being spent on the manufacturing of the signs? Isn’t that what all the incarcerated drug users do in their time in the prison?
This just proves that any idiot can create a job – it takes an entrepreneur to create productive work.
Ed Burley | Oct 18, 2010 | Reply
The one thing that has not been discussed from the start of the debate over ARRA is perhaps the most obvious (at least to me), and thus perhaps the very reason why politicians never discuss; what about the money paid in taxes for gas, tires, autos, parts, etc... etc...
Prior to the Nixon Administration, all such taxes were put into a separate highway fund. By the late ’60′s the highway fund was bursting at the seams with extra cash – no one could have known back in the ’30′s that there would be so many autos on the road – and thus there was more cash than they could ever spend.
Being in a tough fiscal situation, the Nixon Administration opened the flood-gates between the highway fund, and the general fund, and so it has remained ever since.
As a result, the “auto related taxes” that we pay to maintain our roads, are spent on everything but, and then when neglected, and in dire need of repair, Congress passes ARRA (and makes money out of thin air) to pay for those projects – which as the aforementioned explains, pays for everything BUY the needed infrastructure repairs.
The obvious solution would be to close those flood-gates, and have all “auto related taxes” go directly to infrastructure repairs.
This of course does not address the obvious – what is the national government doing in the road repair business? Isn’t every road in America in a state (with the obvious exception of D.C.)?
joe4liberty | Oct 19, 2010 | Reply