GAO report on Stimulus

The GAO has released a new report on the Stimulus.

GAO's review of prime recipient reports identified the following: Erroneous or questionable data entries that merit further review:

  1. 3,978 reports that showed no dollar amount received or expended but included more than 50,000 jobs created or retained
  2. 9,247 reports that showed no jobs but included expended amounts approaching $1 billion
  3. Instances of other reporting anomalies such as discrepancies between award amounts and the amounts reported as received which, although relatively small in number, indicate problematic issues in the reporting.

Pretty astounding huh. Believe this or not, 75% of the reporting was supposedly reviewed by a Federal Agency, while only 1% was reviewed from the recipient of the funds.

10% of funds recipients did no reporting and there were significant errors despite government training.

Rueters has more errors:

Illinois reported the North Chicago School District saved the jobs of 473 teachers with stimulus money, even though it employs only 290 teachers.

$173 Billion, or 22% of the $787 billion has been paid out.

I think the only good news is there is money left. Maybe Congress has a chance on a redo with this original money to create a real jobs program.

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The mistake that WH made was claiming

that x amount of jobs were created or saved. They should have stuck to a standard line. - Financial Information for the Rest of Us.

They shouldn't have rammed it through

spending like a drunken sailor and they did not craft a Stimulus correctly either for job creation.

I think what they have done is stimulate the deficit hawks, the people screaming for smaller government and so on instead of stimulating job creation.

I'm really wondering if they can pass Stimulus II with some real job creation with the rest of the money. I imagine it's already committed though.

But we have to look at what was compromised.

A lot was given up in favor of "tax incentives". The other issue is how well was the original proposal drafted - the Obama Administration had three months to craft a proposal. New Yorker article said that Christine Romer's economic model was saying the stimulus needed to be much bigger closer to trillion but that was rejected. - Financial Information for the Rest of Us.

I wrote up a series on the Stimulus at passage

and dig into it as much as I could. At the time I implied it was ineffective and that's because they had no conditions on employing U.S. citizens/perm residents and making sure funds went to U.S. companies, stayed in the U.S.

I also questioned giving funds to the same type of contractors who already wasted billions.

So, they can claim they had to "compromise" but the original bill was just "throwing money at it" and they were going by a very vague rule of thumb that 1% GDP equals 1 million jobs.

Well, I knew that was nuts. Not in today's offshore outsourcing, race to the bottom world would such a "stick your thumb in the air, throw money at it and expect jobs to be created" ratio.

They quoted that ratio over and over and I am pretty sure I wrote at the time, that is not going to hold, not without a very directed, managed, with conditions the money stays in the domestic economy and goes to income, stimulus...

what do we have today? Money going offshore, money going to no-bid contracts.....

As for second stimulus

Yes, it's probably already committed. Now, keep in mind the bulk of the stimulus money hasn't been spent yet.

The second stimulus is totally a political matter - whether Democrats want to do something before elections which again may make for bad policy.

Bottomline: Obama should consider cleaning house with his economic team. - Financial Information for the Rest of Us.

direct jobs program

You've written one but there are a host of economists, economics blogs, etc. pushing for some sort of direct jobs program, along the lines of the CCC, New Deal.

Maybe I should round up all of the proposals I've been reading and present them in one blog post.

Or you could, but to me the mantra should be jobs, jobs, jobs.

Back in the Day

Of LBJ, legislation had some imagination, even if he was using the template of FDR. The War on Poverty had promise (Job Corps, VISTA, and Community Action Programs), but was never adequately funded thanks to the other war in Southeast Asia. The Vietnam war had scale, while the war on poverty became just another agency with political jobs (remember Rumsfeld under Nixon?). Yes, there were scandals (Blackstone Rangers in Chicago) in the War on Poverty but it did have some political genius in its origins. It just lacked vision, plus the unemployment rate wasn't high enough for Nixon, so it became just another extension of the White House. Nixon was a deficit hawk, except in election year (1972). Bush II made him look like a piker with the amounts he dumped into Iraq -- instead of Blackstone Rangers, Blackwater and KBR got the largesse. The leaders of Blackstone Rangers went to the slammer because they couldn't account for a few million dollars of anti-poverty money, but they would have made out like bandits in Iraq, where huge shrink-wrapped packages of $100 bills became non-accountable. I have gotten away from my original point, which was to suggest that LBJ (minus the Vietnam war) could have found a way to spend enough to put people to work rebuilding America in a smart way. Yes, there would also be inflation -- which is what the Fed dearly hopes for today -- but people like Boone Pickens would find in LBJ a man ready to listen to their ideas and put America back to work.
Frank T.

Frank T.

LBJ, War on Poverty

It would be interesting to see a full bore blog post overviewing those programs, their effectiveness, their costs, their wastefulness.

We haven't really looked that much at LBJ and frankly in my head, I have it all categorized as "wasteful social engineering" based on political payback sort of programs, which I am sure if false.

Vietnam covers up a lot of what LBJ was really up to, so maybe an objective light into all of it, with stats might be worthwhile.

My issue with US programs like this is they don't model countries like Finland, Sweden, France and so on, who seem to put together programs that make way more sense, are way more efficient overall in terms of outlays vs. results.

But, that said, let's go see what LBJ put into place, for his administration is in many ways a tragedy. Vietnam overshadowed all other activities.

It should be jobs, jobs, jobs, and if it happens

it will have to happen in Congress because WH isn't going to lead on this. Boldness isn't their nature.

Amazing, think of all the lasting institutions that were created as a result of the last Great Depression and compare to what we have today - NOTHING. I know we are living in much different times but at least there was leadership in the White House - what we are getting is some post partisan bullsh*t that wants to pacify Wall Street. - Financial Information for the Rest of Us.