How the federal government flushed away the $833 billion stimulus Peter Suderman from the May 2013 issue (Reason Magazine) http://reason.com/archives/2013/04/15/down-the-drain If you want to see where a little bit of your $833 billion stimulus went, head south from St. Louis on Interstate 44 until you reach the Mark Twain National Forest. On March 13, 2009, less than a month after President Barack Obama signed the American Recovery and Reinvestment Act (ARRA) into law, the federal government awarded $462,912.30 to a Spokane, Washington, construction firm called CXT Incorporated to build and install 22 “precast concrete toilets” in the park. These bunker-style commodes did not add to the number of bathrooms in the forest; they replaced existing toilets that didn’t meet Forest Service condition standards or accessibility requirements. And they were not just isolated outhouses. New Mexico got $2.8 million to spend on new toilets in its national parks. Another $42 million went to upgrading toilets and other sanitation facilities in Alaska. The stimulus wasn’t sold as a plan to build bathrooms. “We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead,” President-elect Obama said in a November 2008 address. The stimulus, Obama vowed, would “put people back to work and get our economy moving again,” creating between 2 million and 2.5 million jobs. Instead, the economy followed the money right down the drain. What went wrong? Plenty. The stimulus was rushed to passage based on economic assumptions that remain hotly contested. Its implementation was marred by politics, logistics, and red tape. And the aid it directed toward the country’s least well off may have undermined the very recovery it was designed to hasten. This is what happens when politicians insist that something big must be done, even if they’re not sure what that something should be. (More at the link)
That $462K for 22 toilets works out to over $21,000 per toilet. Grainger (www.grainger.com) sells commercial grade (suitable for rest stops) toilets for $475 max and urinals for $850 max. Where did the rest of the money go? $2500 to install the toilet? Seems like a really high price to pay, but heck, we're flying the plumbers first class to St. Louis and driving them in a Limo to the national forest. That pays the guy about $100/hour, if not more, to install the actual toilet.
The reality is that those disbursing the money didn't care how the money was spent. The entire idea behind the stimulus was that money get out into the economy in any way possible. That money would then flow through the economy and jump start it by making people richer or for them to feel richer. The economic theory behind Obamanomics is beyond absurd. It has been discredited by study after study after study. The efficiency of expenditures and the velocity of money are inextricably tied. Keynesians will always point to a short-term gain, which is generally true. They never like to talk about the long term effects, however. It's like cocaine: you get a ton of stimulation, then a crash. The only way you can get that high again is more of the drug. With Obamanomics, it was so poorly distributed (in reality, there were just too much money for too few projects, so a bunch of them were jokes), we didn't even get the short-term gain. Now all we're left with is the crash.
