Saturday, December 26, 2009

The Real Recipient of the Economic Stimulus?

$787 billion is a lot of money to spend. Most of us, given that amount of cash, would probably find it hard to spend the entire amount. To illustrate - I like Corvettes. They retail for about an average of $55,000 each. There are only about 27,000 made each year, though. So, if I bought every single one made this model year, I would spend about $1.485 billion (not including any discount that Chevy may give me for such a super-sized order). That would be a little less than 0.2% of the whole economic stimulus package passed by Congress last February. I could do that for 528 more years before I ran out of money. Put simply, I could buy every Corvette ever made (starting in 1953) – and still not come close to running out of stimulus money (but, boy, would I be happy!)

How big is $787 billion? Well, if someone paid you $1 million a day every day for the rest of your life, it would take until April 4165 before you collected all of the money (yes, more than 2000 years from now). Never fear, though, as I think the federal government will find a way to spend it.

Near my house, there has been some road construction going on lately. Well, that’s a little optimistic – I’ve rarely seen anyone actually working there, but there are some signs of occasional activity. There are concrete barriers and orange barrels blocking off some lanes of traffic. It’s as if they are going to do something to improve the road. But I can’t figure out what it is. Months have gone by, and my roads (what lanes have been left open) just stay the same.

Before approaching the area, from both directions, the workers installed a sign some months ago. The sign lets us know that funds from the American Recovery and Reinvestment Act are being used to implement this construction. I guess the sign is supposed to make me proud…but it doesn’t. From what I can tell, the only thing that the government is using my tax money for is to provide orange barrels, and erect a sign telling me about it.

I suppose this could be considered to be “stimulating” the economy if one were to evaluate how plastic barrel rental shops and aluminum signmakers are weathering the downturn. Hey, if you want to make a good investment, those look like two market segments whose stock should be on the rise.

I’ve said it before, but it bears repeating: the best way the government can stimulate the economy is to take less money from me at tax time, and give me the decision about where that money should be spent – rather than deciding for me. People are much more likely to consume or invest wisely on their own. We don’t need the government deciding where that should happen.

Because all I have for my tax money today is an obstacle course and some roadside reading material.


Want to see some more government “song and dance”? Visit their website to see exactly where your money is going. There is a state-by-state accounting of where the stimulus money is being spent. I must say, I tend to disbelieve much of what I see here. For example, if you hover over the state of Michigan, they will tell you that they have created (or saved!) 10,073 jobs. Um…my parents live in Michigan, and I’m pretty sure the government is stretching a truth here…..

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