The $787 billion dollar stimulus bill that was signed into law on February 17 promised to include help for the hardest hit areas of the economic crisis, according to President Obama. While the effects of the stimulus bill are still mostly undetermined, unemployment has continued to rise steadily from the 8.1% it was in February and will likely break the 10% barrier when unemployment figures for July are released in a couple of weeks. Unemployment is not the only barometer of economic activity, but when 1 in 10 people in the workforce is out of a job, it severely impacts what has always been the largest part of the economy in the US: consumer spending.
A recent evaluation of where the stimulus package dollars are being spent has revealed an alarming trend. Areas that are the hardest hit by the economic downturn have been receiving the least amount of help from the stimulus bill. The states with the highest unemployment, bankruptcies, and foreclosures have received the least amount of funds. Both the Wall Street Journal and the government website Recovery.gov track the spending of the stimulus bill. The findings are consistent. For every percentage point increase in a state’s bankruptcy rate, it has received $86 less per person on stimulus spending. For foreclosure rates, it is $82 less per person. There are almost countless more examples of this disparity, but the conclusion is clear. The rich continue to get richer and the poor poorer. Maybe this is simply the undeniable truth of capitalism, but it is certainly contrary to the promises that the Obama administration made when they pushed for passing the bill rapidly in February.
Adding to the dilemma are reports of stimulus dollars being spent on unscrupulous projects. The National Endowment for the Arts received $80 million dollars of stimulus money to help revitalize museums, theatres, city orchestras, and other areas of the artistic community that have suffered during the recession. However, some of the “other” areas that have been revealed included $50,000 that went to the Framline film house that recently screened the film Thundercrack, which is self described as “the world’s only underground kinky art porno horror film, complete with four men, three women and a gorilla.” Another $25,000 went to a San Francisco organization, CounterPULSE, which hosts a weekly dance show entitled “Perverts Put Out.”
These two examples are surely not the only ones where U.S. taxpayer money is being used for things that really do not help the broad economy. Critics of the stimulus bill have contended since the beginning that spending so much money in a short amount of time will lead to great injustices like this. For as much oversight and transparency as the Obama administration has claimed, it seems tragic that the areas that have been hardest hit, like Detroit, still lack similar stimulus funding to places like Washington, DC. Washington has the nation’s lowest unemployment rate at 6.2%, yet has the highest stimulus spending in the country with $3,712 per capita, compared with $504 in Florida.
So what is the answer? Unfortunately the answer might just be that this is the best that we are going to get. With so many areas fully taxing the Obama White House, from health care reform to US troops overseas and the broader War on Terror, the government does not have the time or resources to scrutinize every dollar spent. Let’s hope that the stimulus funds are used for the broader good and that as the remaining 2/3 of the funds are spent, we can all do a better job and being good stewards for the American economy.
Dave Baldwin is a businessman, musician, and divorced father of two boys. They live together in El Paso, TX.