Marketplace Scratch Pad

The great stimulus debate

Scott Jagow Mar 8, 2010

It’s been more than a year since the stimulus package dispatched hundreds of thousands of federal dollars to cities and states for projects that were supposed to help save the economy and create jobs. The White House gave up trying to do the job math, so it may be difficult to ever get an accurate measure of the stimulus effect. But the controversy over how the money’s being spent is as intense as ever.

The Civitas Institute, a conservative think tank, made a list of the 10 worst stimulus projects in North Carolina:

  1. Study of monkeys using cocaine: $71,623
    Wake Forest University was granted money to “study the effects of self-administering cocaine on the glutamate system on monkeys.” Well, at least the monkeys will be stimulated.

  2. North Carolina Dance Theatre: $50,000
    This grant is used to retain four professional dancers from the North Carolina Dance Theatre’s second company. Nice for them, but why are tax dollars financing what should be a privately-funded philanthropic organization?

  3. Reducing hot flashes through yoga: $147,694
    Funds granted to Wake Forest University to study “preliminary data on the efficacy of integral yoga for reducing menopausal hot flashes.” The President warned us that the stimulus plan was needed to avoid an economic “catastrophe.” How does this study help revive the economy?

The school says by saving jobs, since the money contributed to the salaries of six people.

The South Carolina Policy Council has a list too:

1) Rehabbing the Charleston County Airport runway: $708,823
Jobs “created”: 0

This isn’t the Charleston International Airport, it’s the small, county airport. The public does not use this airport; it is mainly for private, chartered trips. Why force taxpayers to pay for a runway rehab? Moreover, this is another example of temporary jobs masking as “created jobs.” If the government is so worried about losing teachers’ jobs and law enforcement positions, why spend almost $1 million on an airport that seems to cater to wealthier travelers and other private parties?

8) Picnic shelters: $55,100
Jobs “created”: 1

Typically, picnic shelters are pretty simple structures. For $55,100, these better be the Taj Mahal of picnic shelters. In any case, it’s unclear whether this is for a full-time, part-time, or temporary position.

In Florida, there’s debate over stimulus funding for certain scientific studies — how alcohol affects a mouse’s motor functions and how the environment affects the mating decisions of female cactus bugs:

Are they scientifically worthy? Is the stimulus cash wisely spent?

No, says Nova Southeastern University economics professor Albert Williams. “There is no guarantee that these quirky projects will in fact create jobs,” he said. “They can create one or two little jobs.”

Yes, counters fellow academic Charles Zelden, an NSU history professor. Money plowed into research is just as stimulating to the economy as money spent on, say, repaving roads, Zelden said.

“Dollar for dollar, it’s the same thing: You give money to people who will spend it in the economy,” he said.

In your opinion, who’s right?

You can try follow the spending at the website for the Recovery Act, but as this story from Pennsylvania points out, states are having a heckuva time keeping up:

Some grant money has to be reported three times: once to the federal agency that is distributing funds, once to the state and once to the federal recovery oversight board, she said.

”The real story is how many millions of taxpayer dollars are being wasted on trying to figure out the rules,” Sywensky said.

In other states, there are debates about tax money that isn’t federal stimulus. A great example comes from New Jersey. Morgan Stanley is lobbying for $300 million in tax breaks to finish building a casino:

Fresh from using $10 billion in federal bailout money to save itself, Morgan Stanley is now gambling that its investment in a 1,900-room casino-hotel on Atlantic City’s boardwalk will hit another type of jackpot.

The financial services company, which has invested hundreds of millions of dollars in the project, is betting that state leaders will grant it $300 million in tax breaks to help finish the partially built casino.

“I’m struggling to pay my taxes, and we’re giving Morgan Stanley $300 million to build a casino,” said Bob McDevitt, president of Unite Here Local 54, the largest casino employees union in the city. “Why should the people of New Jersey finance this project?”

State Sen. Raymond Lesniak has an answer to that question:

(It’s) about “jobs, jobs, jobs, jobs, jobs, jobs.”

Is it?

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