This week, we received more bad economic news showing that gross domestic product had grown slower in the second quarter of 2010 than had been initially calculated. The majority of economic indicators — including new claims for unemployment, new housing starts, and sales of used homes — are lagging.
According to the President’s economic advisors, it wasn’t supposed to be this way. Government stimulus spending was supposed to reach its high point now, fueling a “recovery summer.” Instead, the February 2009 stimulus bill created a mess of ineffective government programs and wasteful spending.
Vice President Joe Biden was supposed to be the administration’s leader against wasteful stimulus spending. In a joint address before Congress, President Obama stated that he would be the perfect man for the job because, “Nobody messes with Joe.”
But in an address this week, the Vice President praised the government weatherization program that has been broadly criticized as a terrible example of government waste. The rules for the program were delayed for months as government bureaucrats had to account for numerous wage requirements written into the bill.
Now that the program is up and running, things have been messy. According to the Associated Press, no home in Alaska has participated in the program yet. In Texas, the contractor receiving the most money in the state did shoddy work on the majority of homes it weatherized. In Biden’s home state of Delaware, the program has been shut down since May after auditors discovered fraud.
The weatherization program isn’t the only one with problems. Sen. John McCain (R-AZ) and Sen. Tom Coburn (R-OK) recently released a report highlighting 100 examples of wasteful spending.
They discovered a number of scientific studies of dubious value, including some spending money overseas. One study collected ants on remote Indian Ocean islands at a cost of $1.9 million. Another study received $762,372 to create a “dance draw” program with the stated intention of creating YouTube videos that would be as popular as the “double rainbow” or “dramatic-looking prairie dog.”
But it wasn’t just low-dollar studies that wasted money. The Women, Infants, and Children nutrition program received $400 million in additional funds even though it already has a $125 million contingency fund to cover unplanned expenses. In 2009, the program only used $38 million of these funds and does not expect to use them at all this year. That means $362 million of stimulus money sitting in a government account unused.
The stimulus bill is not doing the job that it was supposed to, but we still have important programs in need of funding. Congress recently borrowed more money to renew the emergency unemployment compensation program. The subsidy to help the unemployed pay for COBRA extended health insurance was allowed to lapse since the Democratic leadership was unwilling to find a way to pay for it. Just rescinding a portion of the unused stimulus funds could pay for these extensions without creating more debt.
The stimulus isn’t working because the government is incapable of efficiently allocating resources. We only need to look at the failures of centrally-planned economies to see what happens when government thinks it can take over the job of the private sector.
There’s an old Soviet cartoon where a worker is lauded by party leadership for the tonnage of nails he produced. The punch line is that he just produced one gigantic nail that wouldn’t be useful for building anything.
In the private sector, individuals risk their own money. When a manager in the private sector fails to bring in business, the consequence can be losing his or her job. Government bureaucrats spend public money. When was the last time you heard about a federal program manager who was fired because taxpayer dollars were wasted? We shouldn’t be measuring the success of federal programs by the sheer number of dollars spent.
With billions of stimulus dollars still unspent, there is still time to stop waste before it happens. There are better ways to spend taxpayer money, including long-term investments in transportation and infrastructure. There should be no room for waste when trillion-dollar deficits are burdening our nation’s economic growth.
Rep. Joe Pitts (R) represents the 16th Congressional District of Pennsylvania.