What's the Stimulus Doing?
Keeping in mind that a lot of the money hasn't been spent yet, we can say one thing the stimulus is doing: closing state budget deficits. The Center for Budget and Policy Priorities says that the $140 billion or so dedicated to state spending "is enough to close, on average, roughly 30-40 percent of state budget shortfalls." You want a graph?
You can't handle a graph.
Okay, maybe you can:
As Matthew Yglesias writes, this sort of thing is important. "Certainly conservatives don’t seem like the kind of folks who’d deny that steep tax hikes amidst a recession will make things [worse]. But tax hikes are, obviously, one way to plug a hole in state budgets. And sharp state spending cuts have the same pro-cyclical impact." Beyond that, state services are important in a countercyclical sense: Many more children need health-care coverage when adult unemployment hits double digits. If states have to pull back on S-CHIP as the recession worsens, it's real trouble.
It's also worth saying that this money will help preserve a lot of jobs at the state level. This was an element of the plan that never got enough attention for my tastes: Preserving jobs is really important. More important, arguably, than creating new ones. First, it's cheaper to preserve a job than to create one. Second, it's more effective. The evidence we have suggests that a worker who is laid off from one job frequently finds that his or her next position is at a lower wage, with less responsibility. And the worker is frequently not as productive, at least for a while, because the learning curve at a new position can be steep.
Now, the full stimulus was almost $800 billion, and this is only $140 billion. You can't judge the effectiveness of the whole simply from this part. But this is a key part. And if we're looking to do a second stimulus, a significant infusion of aid to the states would be a good place to start. It would be good policy right now to basically erase state budget shortfalls, and even allow states to increase the service spending, given that it's more necessary than ever.
By
Ezra Klein
|
July 10, 2009; 6:19 PM ET
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Posted by: scott1959 | July 10, 2009 8:23 PM | Report abuse
Gee, that will work for this year. But, what about next year? Are the states supposed to increase their spending again in the hopes that the Federal government will bail them out one more time. Which will only increase the Federal budget deficit. Good Work, you should use one of your dinners to apply for a job in the Obama administration!
Posted by: indawilderness | July 11, 2009 5:42 PM | Report abuse
Keep spinning for your god, Ezra - more and more Americans are now wising up.
Posted by: johnhiggins1990 | July 12, 2009 2:33 AM | Report abuse
What's the 'Stimulus' doing? Why, it's doing what it was created to do. It's paying off Obamas' BROWNSHIRTS. Unions, ACORN, Democrat Strongholds. You didn't think it was gonna create any jobs, did ya? And you make a good point, about it "Saving a lot of jobs at the STATE LEVEL". And what kind of 'JOBS' are those, class? Correct. They are STATE EMPLOYEE UNION JOBS. I wonder who they vote for? And another thing...Why HASN'T a lot of the 'Stimulus' MONEY been spent yet? I thought that the whole idea of STIMULUS, was to get the money out there RIGHT AWAY. You know, like he has for HIS BUDDIES. For HIS SUPPORTERS. Anybody seen any BRIDGES being built? Any HIGHWAYS? Or is it all just WELFARE? Get real EZRA. The BASE of the DEMOCRAT PARTY is the LOWEST COMMON DENOMINATOR. The BUM. The SLACKER. The LOSER. The FELON, the DRUG ADDICTED, and the TRANSGENDER. And they are led by a man who has never had a REAL JOBin his life. Never gotten his hands dirty. Never made a payroll. Knows NOTHING about business, or creating JOBS. GOD must be very angry with us. And NO, Johnathan Alter, I don't mean OBAMA, when I say GOD. Idiot.
Posted by: GoomyGommy | July 12, 2009 8:11 AM | Report abuse
So, where are the 3 million jobs they promised would be created by passing the stimulus bill?
How does closing the state budgets create any jobs?
Posted by: ElViajero | July 12, 2009 8:43 AM | Report abuse
Obama & the Democrats are doing to the USA what left wing Socialist Democrats has done to the Golden State!
California the Golden state, American future, is fast becoming the poster child for an bankrupt third world State!
An unholy alliance of Socialist Democrat politicians, Unions, and Illegal Aliens supporters are feasting at the trough of tax payers paid benefits while taxing & regulating business and the tax paying public into poverty.
The pandering of Left Wing Democrat Politicians to their constituency of Unions, Illegal Aliens and open border supporters, are driving business and citizens to other states & countries, while leaving the parasites & welfare leeches in an increasing bankrupt, crime ridden, dysfunctional state!
For years California has ignored economics 101 and imported Criminals, Uneducated Peons, and poverty from Mexico, which increased Medical, Welfare, Crime, Prison, etc. & adding a estimated 10 to 16 billion per year to Calif. State expense to support the invading horde of Illegal Aliens while exporting business and educated tax payers.
Like all Socialist & Marxist States the results have been a astronomical increase in social welfare, schooling, prison cost etc. and a lowing of Living standards, Education standards, Tax receipts & finally Bankruptcy.
Failure to abide by our Constitution against invasion & enforce our Immigration laws and constraints on wages and benefits for public employees will result in turning the Golden State into MexiCalif and the end of the Calif. Dream and the beginning of the MexiCalif. Nightmare!
The policies of Obama and Wash. DC Democrats are intent on following Calif. policies and are resulting in the same creeping socialist process across American.
Amnesty & Citizenship as a reward for their invasion of the USA, will result in the rest of the USA turned into a Spanish speaking third world cesspool, modeled on Mexico and follow California into a polluted, over populated, Spanish speaking third world Nation of Crime, Corruption, Poverty, Cruelly & Misery!
This will result in a population depending on Welfare and the Democrat party, thus assuring the lock on power for the Socialist Democrat party of the United States of Mexico!
Posted by: american1 | July 12, 2009 9:01 AM | Report abuse
GOVERNMENT BAILOUT OF GOVERNMENT.
OBAMA GOVERNMENT TRYING TO SAVE ITS STATE AND LOCAL GOVERNMENT CONSTITUTENTS.
GROW GOVERNMENT AND LET THE PRIVATE SECTOR ECONOMY WITHER AND SHRINK SO THAT GOVERNMENT MUST THEN FILL A BIGGER GAP.
GOVERNMENT BORROWING THEN CROWDS OUT PRIVATE SECTOR BORROWING, ACCELERATING A DOWNWARD PRIVATE SECTOR EMPLOYMENT SPIRAL.
WASHINGTON POST IS LAST TO SEE IT AND LAST TO QUESTION THIS DUE TO SELLING ACCESS TO THE BOWELS OF THE GOVERNMENT MONSTER.
Posted by: bamvol | July 12, 2009 11:16 AM | Report abuse
The stimulus preserved my job! I actually did get laid off, but I work in research. We'd had a proposal in limbo for a year and a half (on our third and final revision), right on the cusp of an acceptable score for funding. When NIH got the extra 10 billion from the stimulus, our grant got funded and I got hired back. It happened really fast, too! I think we heard about the funding two weeks after the stimulus passed. ;)
Posted by: roquelaure_79 | July 12, 2009 3:11 PM | Report abuse
There is so much partisan enmity in comments. The dividers in our nation sure did a good job of it, too bad they couldn't put that time and energy into good measures for the American people.
The stimulous is going to take time-but its important for voters to urge their reps to push the stimulous money into projects that create jobs AND rebuild our crumbling infrastructure. That's our job, to push our reps - how'r WE doing?
We need to push for a manufacturing base here as well. But will we spend $20 more for a product made in the USA? We need a streamlined healthcare system for all Americans very badly. Those who are against it are one shift in circumstances from becoming one of the unlucky ones. Should we have healthcare for all, or should we continue to: build the military industrial complex, fund corporate welfare, give civil servants too generous pension plans, subsidize big-agriculture, accept corrupt practices in our gov't officials, etc, etc.
When I retire and have extra time, I plan on being more of a thorn in the side of our elected officials than just a letter or email to them - please join me!
Posted by: irenehanlon | July 13, 2009 11:25 AM | Report abuse
The comments to this entry are closed.
Although this certainly plays into Krugman's "50 Hoovers" theory. How can the stimulus do its job when the stimulus (31%) equals the spending cuts (32%)? To the extent this plays out nationally, we DO need another stimulus.