At a legislative hearing Wednesday to review how Arkansas has spent its share of federal economic stimulus dollars, Democratic Sen. Larry Teague invited state finance officials to tell the committee “how much good we did with that money.”
I’m pretty sure he must have been joking.
This fine write-up from John Lyon of the Arkansas News Bureau details the damage. As the stimulus program winds down (most funding will be exhausted by the end of September, as scheduled), the state has spent some $2.65 billion. That’s roughly 85 percent of the $3.1 billion total.
Was that money well spent? Oh, stop being a jackass, you know the answer.
The vast majority of the funding went to existing programs in health and human services, education and unemployment compensation. Some $807 million—roughly a quarter of the total—was for unemployment payments.
“But it’s all good for the economy,” right? This recent piece from the crackerjack analysts at the Tax Foundation says “no,” arguing that money spent for transfer payments from one set of taxpayers to another do less to stimulate growth than funds spent on infrastructure investments such as roads, airports, etc. Writes the Tax Foundation’s William McBride:
For the most part, transfer payments amount to taking money away from working people and giving it to non-working people, i.e. paying people to not work. As such, whatever the merits of a social safety net, we should not be surprised to find the tradeoff is lower growth.
Of course, infrastructure spending doesn’t always deliver on its promises. But spending on highways and such probably has a better track record than simply shifting money around from taxpayers to tax-consumers, if you simply must have the spending.
In a June 19 Arkansas Democrat-Gazette article (subscription required), Gov. Mike Beebe and other state officials hemmed and hawed around the question of whether the stimulus dollars sent to Arkansas did much to buoy the economy. The ADG generously scored the result as “unclear.”
But surely the stimulus program created lots of jobs, eh?: