Defining a "Stimulus Package"
Jim Manzi has a good summary of the major components of the proposed stimulus package at The American Scene. A couple of charts stood out:
Manzi discusses this in some detail, but the timing difference between the spending component ($604 billion) and the tax reduction component ($212 billion) of the package is fairly dramatic. Notice that almost half of the spending will occur during or after 2011 (with only 15% in 2009). This is hard to reconcile with the idea that this spending is intended for the current recession. Here’s Manzi:
Here are all the items that I saw them identify as individual programs with more than $10 billion of projected outlays, in the order that they call them out:
• $20.0 billion to increase the maximum benefit under the Supplemental Nutrition Assurance Program (i.e., Food Stamps)
• $18.5 billion for energy efficiency and renewable energy programs
• $20.4 billion for programs administered by the Department of health and Human Services
• $20.0 billion to renovate elementary and secondary schools
• $17.6 billion for Pell grants and other student financial assistance at post-secondary institutions
• $29.1 billion for other elementary and secondary educational programs
• $30.0 billion for highway construction
• $13.1 billion for other transportation programs
• $11.2 billion for housing assistance programs administered by HUD
• $19.5 billion (minimum, could be higher, as per Title XIII) for education grants to states
• $27.1 billion for increase unemployment benefits
• $13.3 billion to increase health insurance for unemployed workers
• $11.1 billion for “Other Unemployment Compensation”
• $20.2 billion for Medicaid and Medicare incentive payments to encourage providers to improve healthcare IT
What does this sound like to you? It sounds to me like a wish list for the left wing of the Democratic Party.
I tried to go quickly through the spending for all categories and crudely map them to the OECD classification system that allows for the comparison of spending across governments in the developed world. The huge categories of spending under this bill that I could map to categories other than “General Spending” are in Social Protection (about $90 billion), Education (about $90 billion) and Environment (about $55 billion). Interestingly, Defense represents only about 3% of the spending in the bill (as opposed to 12% of U.S. government spending overall, or about 3% of French overall government spending as a point of comparison) and Public Safety represents only about 1% of spending in the bill (as opposed to about 6% of U.S. government spending overall, or about 2% of French government spending overall). In other words, the net effect of this bill is to shift the distribution of U.S. government spending as a whole away from defense and public safety and toward social programs: for good or ill, to make the U.S. into more of a European-style social welfare state. Because the amount of spending is so huge, this will be a material, not notional, shift. Eventually, we will emerge from this recession / depression / whatever it’s going to be. When that happens, is this really the kind of government we’re going to want?
I am of two minds here. First, I do not have a problem with funding health insurance or unemployment insurance, per se. Secondly, the Democrats won, and they can pass whatever legislation they so choose.
But is it too much to ask for truth in labeling? A “stimulus package” in which almost half of the spending won’t be spent for another two years is either designed in anticipation of a very long recession, or its not really a stimulus package. Even granting the former for the sake of argument, additional spending for 2011 could always be added either in late 2009 or early 2010 if needed. It is much less likely that spending, once authorized, will be de-authorized, even if it is no longer needed. Why the rush to commit those funds now?