1,557 pages of pork
January 4, 2009 – 3:00 pm
Obama wants to enact a “bold” stimulus plan. And to do it VERY quickly. It’s hard to find ways to spend $775 billion-$1 trillion quickly—much of it will be tax cuts, apparently, and much of it transfers to the states to help them with Medicaid costs, but plenty will go to “infrastructure projects.” To help him find ways to spend money on infrastructure, Obama requested local government officials prepare a list of “shovel-ready” projects that can begin just as soon as the money can be shoveled out the door.
The U.S. Conference of Mayors responded with alacrity, and chutzpah, generating a 1,557 page report with approximately 19,000 projects that they’d like to see funded by the federal government. That’s approx. 19,000 earmarks, approx. 19,000 pork-barrel projects, approx. 19,000 ways to spend money the government doesn’t have on projects that will do little, if anything, to stimulate the economy long-term.
Here are some highlights:
- $621,000 for intercom/PA upgrades in Anchorage, AK
- $40,000,000 for 3 new parking garages in Huntsville, AL
- $15,000,000 to “train staff on pre-treatment” of “waste waters” in Avondale, AZ
- $220,000,000 to expand the Anaheim Convention Center in Anaheim, CA
- My favorite: $65,000,000 for “residential sound insulation” to “mitigate properties from jet noise” in Inglewood, CA
- $111,400,000 for “storm drain replacement” in Long Beach, CA
- $170,000,000 for library and city hall expansion in Pleasanton, CA….(there are literally hundreds of “library” requests)
- Sacramento seems particularly greedy. The California city puts in 29 requests totaling $2.8 billion. Skimming the report, the number of requests is not that large compared to other cities, but the $ scale of the requests seems huge.
- $527,600,000 for renovating Terminal 2 at the San Franciso airport
- Miami and Miami-Dade together have 38 pages(!) of requests running well into the billions. It includes two pages (from 209-211) of “landscaping and beautification requests” and $203k for new bleachers in the gym at Redland Middle School.
- $5,000,000 for a new police station in University Heights, OH
- $250,000 for asphalt paving and “alley upgrades” in the “Townside area” of Sand Springs, OK
(I got a little tired after reading through the California list. I encourage readers to go through the report themselves and highlight their own favorite projects in the comments section below)
And it appears Congress will have at most a month to consider the stimulus legislation, not enough time TO READ it, much less consider the merits of individual projects.
Those projects selected for the stimulus package may provide short-term stimulus as the money is being spent, but once the money is gone, and the debt incurred to pay for all of it has to be paid back, this whole exercise will have been proven totally foolish and counter-productive for the economy.
Why counter-productive? If the projects we build don’t generate revenue or savings to offset the debt incurred to build them, then they will be a long-term net negative for the economy. Long after we’ve stimulated the economy by spending the money, we will be depressing the economy paying off the debt.
But if the government is going to spend so much money, better to get something than to get nothing, right?
This is the commons dilemma in action: “individuals acting independently in their own self-interest may ultimately destroy a shared resource.” The typical example is individual herders who let their livestock overgraze a parcel of land. Eventually there’s no vegetation left to graze and everyone’s livestock starves. If every American insists on getting his piece of federal government largesse today, the government will have no capacity to spend later on. Tomorrow’s taxpayers will simply be paying off today’s debts.
I was always skeptical about Obama’s promise to “change the way Washington does business,” but certainly I felt things like earmarking would be eliminated. The fact that dollars may get spent on environmentally-friendly projects gives me little comfort. The lower energy costs incurred over time likely won’t pay back the upfront cost of the upgrade itself.
According to AFP,
Obama “also pledged to get mid-term and long-term budgets “under control” and make sure money isn’t wasted on pork barrel projects, but cautioned that the country would have faced a colossal budget deficit even if a stimulus package was not required.”
We would have faced a collosal budget deficit anyway, so why not keep spending? Again, my friend’s advice is apt.
Posted in bailout, debt, government spending, taxpayer issues |
11 Responses to “1,557 pages of pork”
I received the book IOUSA for Xmas and looked forward to reading it, but, on further consideration of what is to come that will put everything in the book in the shade, I wonder if I should bother.
There is a large chorus boosting the stimulus idea now. It’s hard to find anyone urging caution. There is no limit - nobody is suggesting where the flood of money should stop only that we have to start the flood ASAP.
Since there are two sides to every coin (we all know that house prices can go down as well as up), it’s a little scary to see another bandwagon, built without any brakes, ready to roll
By CB on Jan 4, 2009
Just perused thru Virginia and noticed something for the first time, this is a MASSIVE handout to urban mayors (who will tout/claim the increase in employment) and a kick in the nuts to everyone else.
How many mayors also own/operate their own “general contracting” companies? How many will get pieces of this pie?
Alexandria mayor William D. Euille, CEO of general contracting firm William D. Euille and Associates, step right up!
By million on Jan 5, 2009
So what do you propose be done?
As I see it many of these “expenditures” are merely alternative ways to stave off unemployment with city/state projects. I’m all for minimizing the costs of unemployment by creating “ethereal” employment opportunities, whether pork or not.
By Terr on Jan 5, 2009
What do I propose? Americans need to learn to live with less.
All of these expenditures may protect employment in the short-term, but when the debt has to be paid back, the increased burden on the Federal Government will mean spending has to fall more tomorrow than it will be increased today. So in the long-term, unemployment will be higher than it would have been if we just took our medicine and let the recession happen.
By RolfeWinkler on Jan 5, 2009
This is silly stupid economics like we have seen in the past over and over again. It doesn’t work as we have seen over and over again. It won’t add jobs long term, while adding a yet even larger burden long term for those now unemployed as a consequence of this proposal.
We desperately need jobs not expanded convention centers that will sit idle due to the massive economic slow down in the public and private sectors alike. We do not need new wings on libraries that are not used near their potential now. Go take out a book and bring it home to read it.
Let’s get unemployment extensions with required re-training in fields in those areas doing well enough to hire now or in the short term.
How about massive tax cuts to American companies that bring home jobs from off shore and fill these positions with American workers.
Let’s see only infrastructure request that jeopardize the public. Bridge repairs and highways paved for example. No request that is not a public safety issue should be signed off. This won’t add jobs long term but will repair a decaying infrastructure in desperate need unlike adding on space to older buildings. You don’t put an addition on your house when your roof is falling down and your deck has collapsed do you?
Silly stupid politicians at their finest…
Change? Where is it at? Biden? A career politician? Look at his team of old school, good ole boy politicians making the same mistakes that got us here. Spend, spend, spend our way to prosperity!
Have we learned nothing as a country in the past 7-10 years?
By Stu on Jan 5, 2009
“Have we learned nothing as a country in the past 7-10 years?”
Nope. Not a friggin’ thing. Ask “Terr” about it.
By John on Jan 5, 2009
Where’s my $10 billion to expand/improve passenger rail?
By Drew on Jan 5, 2009
Anyone see the auto sales figures for December yet? I think they averaged an across the board declines of between 30% - 35%. How is that bailout looking now Mr. Paulson. A cool $14 Billion right out of the future tax payers of Americas pockets and right into the bloated salaries, bonuses and unions pockets in one fell swoop. Who thinks us tax payers will get any of our money back? I will go out on a limb and say not only do we lose it all, but there will be more give aways of the public tax payers monies before this is over. It is border line theft in my opinion!!!
Now we have Obama looking like the guy in the wagon selling snake oil from town to town in the western days. The only difference is that the snake oil salesman got shot if he did it more than once to the same bunch of people. We reward these same acts of thievery by voting people that do that in as president!! a very sad commentary on American voters indeed…
By Stu on Jan 5, 2009
Today is a perfect day to opine on bailouts. We clearly see why they simply do not work in changing market conditions. They do not sway market sentiment or cause people to do something they would or wouldn’t have with or without them. Today is a perfect day to show how and why the American Tax Payer just got poorer due to the reckless Fed and their failed bailout policies. It is borderline thievery in my opinion and Paulson et al should be brought up on charges for their recklessness and poor economic behavior. This from people who got us into this mess is of no surprise to me, but ignorance and incompetence is no excuse for doing what they are doing. The Congress should also be held in contempt for standing idle, and witnessing the raping of future tax payer money that will cause a deeper and longer recession / depression than anyone could have imagined. Pelosi should be absolutely ashamed of herself for allowing such incompetence under her watch as speaker. Sinful in it’s best case of behavior if not criminal negligence.
Today we see further evidence that the bailout of the auto manufacturers was a complete waste of time and money. All we did was allow for an increase in bloated salaries, larger bonuses and continued union abuse of wages and privilege. A total joke for what we could have demanded with a competent congress in charge. We should have demanded all sorts of concessions, but preferred to continue the reckless and unproven methods to date that have gotten us nowhere. AIG will be more of the same and so will Fannie and Freddie in the end. All worthless endeavors of future public tax payer money thrown at problems far to deep to even generate a positive blip never mind a correction. Market forces react via the market and not how much money is thrown around by a non producing government.
At no time in history have we seen such abuse of power and total disregard for public sentiment which is who these folks ultimately report too. Off course we continue to vote these incompetent fools into office so I guess we can only blame ourselves as we are getting exactly what we asked for. I personally voted every single incumbent out of office, but was in the minority by far from the final vote counts. Be careful what you ask for because you might just get it is what happened here.
So today we see auto sales from across the board literally plunge in what can only be described as a virtual free fall. This will only get mirrored in future months ahead as the industry is dead. There is no pent up demand for autos and no incentive to take on further debt to buy one. Heck, many people would not qualify even if they did want to take such a reckless maneuver. Why pay $30K for a new car when you can get the same vehicle 2 years old with 30K miles for $15K? People are just not this stupid and the lease market is tossing used cars onto the market much like what foreclosures are doing for home inventory. This increased volume of inventory is causing better and better deals in the used car market which the new autos simply cannot match. Much like new home sales have dived so will new car sales.
We see today the following:
1. Chrysler Sales DECLINED by 53% in December.
2. GM Sales DECLINED by 31% in December which represents a 49 year low.
3. Ford Sales DECLINED by 32% in December which represents a 47 year low.
4. Honda Sales DECLINED by 35% in December.
5. Toyota Sales DECLINED by 37% in December which is only its second drop in sales in its history.
6. Nissan Sales DECLINED by 31% in December which represents a 16 year low.
A bailout using future and yet uncollected tax payer revenue of $13.4 Billion was given to these stalwarts of their industry (Gm, Ford and Chrysler) just last month. Who thinks this will make any difference what so ever in these companies going bankrupt other than to provide a few more months of cash in their pockets at us tax payers expense? This has all the looks of a classic money grab, but it is our children’s money they are grabbing… what a country! In the end I suspect Chrysler fails first and maybe before the March deadline, followed by GM and ultimately Ford. Without bankruptcy protection from creditors and new union deals if not doing away with them completely all three have no chance of survival in my opinion. They are all dead on the vine and just waiting to falter. A cash lifeline of future tax dollars will not get Americans to go out and buy cars. In fact without a cash infusion of Billions to tax payers themselves nothing will change from what we just witnessed in December. I would venture to say it will only get worse. AIG, Fannie and Freddie however will make the auto deal look like pocket change you find in your sofa when all is said and done. As some would say “you ain’t seen nothing yet”
God help us if the Obama plan goes through as proposed and our government continues their reckless and incompetent bailout proposals at the expense of our countries future… god help us all…
By Stu on Jan 5, 2009
The problem at the root is a multi-year oil price shock. Massive economic disruption was widely predicted to follow from high oil prices. Super-high prices came and stayed until the world economy choked. World oil production has been stalled near 85 million barrels per day since 2005. No investment will help much unless it is in energy conservation or new energy sources. Given the new Peak-Oil reality all infrastructure investments should be vetted considering energy. For example, adding lanes of freeway would be truly useless as traffic is declining.
There doesn’t seem to be any feeling that US government resources are limited and must be directed to the most useful ends. So far few seem to understand the problem.
By Kye Goodwin on Jan 5, 2009