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Brooks Wilson's Economics Blog: Questionable Stimulus Spending

Tuesday, November 3, 2009

Questionable Stimulus Spending

Susan Ferrechio writing for the Washington Examiner in, "After a flurry of stimulus spending, questionable projects pile up," lists projects that she views as unworthy of public funding.  I narrowed her list to those that reeked of corporate or political welfare.  By the latter term, I mean projects designed to reelect and Congressman or Senator.  I purposely left off those that might be considered bad scientific inquiries; I do work at a college after all. 
The $787 billion stimulus bill was passed in February and was promised as a job saver and economy booster. Here is where some of the money went:

- $30 million for a spring training baseball complex for the Arizona Diamondbacks and Colorado Rockies.

- $11 million for Microsoft to build a bridge connecting its two headquarter campuses in Redmond, Wash., which are separated by a highway.

$430,000 to repair a bridge in Iowa County, Wis., that carries 10 or fewer cars per day.

- $800,000 for the John Murtha Airport in Johnstown, Pa., serving about 20 passengers per day, to build a backup runway.

- $300 apiece for thousands of signs at road construction sites across the country announcing that the projects are funded by stimulus money.

- $9.38 million to renovate a century-old train depot in Lancaster County, Pa., that has not been used for three decades.

- $2.5 million in stimulus checks sent to the deceased.

I consider payments to the deceased to be political welfare, a thank you statement for the dead who continue to support local politicians, and not a clerical error.   

Although all economists prefer good projects to bad, these projects highlight an issue in the debate between economists who supported and opposed the stimulus.  Some economists who opposed point to the low or negative returns to taxpayers from these projects.  They also believe that some projects crowd out private investment.  If the bridge connecting Microsoft's two headquarter campuses were profitable, Microsoft would build it without government money and government spending crowded out private investment. 

Supporters of the stimulus are less worried about the long term quality of investment.  They believe that spending now raises employment now, lowering costs associated with the recession and these lower costs now offset some or all of the future higher costs due to bad investment.  Using similar logic, if Microsoft planned to delay construction of the bridge until the economy rebounded, then the stimulus money could be considered the cost of building the bridge now when increasing activity if more valuable to the economy as a whole. 


  1. As far as the baseball field is concerned, I believe that any improvements, renovations, or additions to such a facility, should be covered at the owner's or the investor's expense. Are there any restrictions concerning the use of bailout funds? If there are, they need to be revised and enforced. While a new practice facility might be ideal for the team, I don't see it being very profitable or necessary for that matter. And the bridge for Microsoft... why? If it is only for the sake of convenience, they better hold off on the construction. So I commend them on that. Not that my opinion carries much weight anyway.

  2. Cameron Dorsett4/11/09 11:08 PM

    Wow, what's new? More careless government spending. I guess we should expect this to be the norm when it comes to the "hope" and "change" the Obama administration promised. What kind of role do presidential economic advisors hold? They must stand by like flies on a wall, while our corrupt government officials make decisions. I'm absolutley shocked to see the facts listed above. I would hope that there's someone with enough brain power to make a few better choices as to wear our money goes. Looks like me and my future children get to look forward to paying for unused highways, runways, bridges, and of course all of our good friends buried six feet under.

  3. Tyler Fadal8/11/09 9:27 PM

    I believe that a group of junior high kids could think of more effective and effecient ways to spend that stimulus money! Obviously the presidents economic advisors are either incredibly ignorant or they are 100% partisan, and have let their partisanship completely cloud out their scientific view. Shouldn't Obama's economic advisors hold their scientific beleifs closer than their partisanship? If they don't then they lose all of the their effectiveness in analyzing and making choices. I am shocked by the facts above, yet I am not suprized that the government decided to spend our money in such pointless ways. This has come to be expected. The only thing good I can see out of all this is that since the government is spending our money like this maybe there's a chance that the government will use some of that money and pave the dirt road I live on that sees at least 20 cars a day...

  4. Ryan Mezynski9/11/09 6:35 PM

    No government is perfect when it comes to how they should speed taxpayer's money, but I doubt this spending was just bad decision making. I am sure that someone had connections to this money. Was all this spending bad for the economy? Take the Microsoft bridge for example, even though it is separated by a highway, it could save some time, which should result in more productivity. As I have learned, the more productive a country is, the higher the slandered of living.

  5. Trent Stiles10/11/09 6:35 PM

    Come on what type of government would give out money to something thats not worth time unless really needed. Why not use this money for a better use then things that are rarely used or not at all. Im sur the government could think of better ways then just handing out money just because someone asks. Why not find other ways that actually improve something that is used quite frequently.

  6. Jordan Rhodes12/11/09 6:52 PM

    This proves that government officials are pros at pretending to be productive. They are also pros at spending money, money that doesn't exist. For the amount of time panicing over inflation, we could actually think, stop printing money, and stop spending citizen-earned money on bridges and road signs! What America needs is a SMART leader. Someone with experience that know money, how it works, and where it should go without putting our country trillions of dollars in debt. I wonder where this country would be if the government actually lent their economic advisors an ear. Or do the advisors even do anything?

  7. Zach Dickerson2/12/09 7:00 PM

    Sounds like people/companies with the right connections can use government(tax payer's) money to pay for there unnecessary rediculess "toys". Just another reason we have a trillion dollar deficit

  8. A. Katherine Tuel5/12/09 5:02 PM

    Wow, this reminds me of how everyone says "Where is all that money going?" or "Why does the government spend all that money on blank, but not enough money on blank?" Let's just hope that Obama spends more effectively with his plan of "Hope"