Obama’s Rhetoric Was The Only Thing “Shovel-Ready” About the Stimulus

Economist Robert Higgs examines the numbers dispersed thus far by the federal stimulus plan and finds that only a small fraction of the dollars spent have gone to “shovel-ready” projects – a main selling point of the bill. 

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.

Higgs continues with more details of the spending, arriving at a conclusion most sober observers of government spending warned of upon the bill’s passage: that it would amount to a massive payoff to political constituencies and serve mostly to expand government:

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.