Tuesday, February 17, 2009

It Ain't No Stinkin' Stimulus

AJC.com has an article today about the effect of $787 billion dollar bill that President Obama is signing today will have on Georgia. Georgia is going to get about $6 billion over several years.

Here's a partial list:

$530 million for 2009 Medicaid

$790 million for 2010 Medicaid

$400 million for 2011 Medicaid

$2 billion for K - 12 education over several years

$1 billion for roads and bridges

$137 million for mass transit

Our leaders' reactions? "If we're allowed to supplant some state dollars, I hope we can use it for other things." "It frees up funds that can go anywhere else. It will be extremely tempting to fund the homeowner tax relief grants."

All of the items listed above are in Georgia's budget this year and presumably for 2010 and 2011. None of it is new spending. All the bill does is shift the payment mechanism to spread the cost beyond Georgia's borders to the rest of the country. We of course get our share of the costs of other states' upkeep in return. The net stimulative effect? Bupkis.

And actually there's a negative result. Georgia and other states have to balance their budgets (at least in theory). So now the feds will borrow and print money to pay for current expenses for themselves AND the states, digging a bigger debt hole for no short or long term economic gain.

God, I'm talking like a Republican.


dr sardonicus said...

That pretty much explains it. Since most states are forbidden by law to run deficits, the feds are picking up their debt for them. They'll print money to cover the debt, and eventually we'll have to deal with the consequences of inflation. Simply put, the government believes they can manage the rate of inflation better than they can manage deflation, which is what would happen if they took no action.

Anonymous said...

I don't really see the logic behind fixing a debt crisis with more debt. I guess it goes back to what Will Rogers said all those years ago: "If stupidity got us into this mess, why can't stupidity get us out?"

Debo Blue said...

Let the records show counselor that although I have not posted on my site I have visited your site AND commented more than once.

Defense rests your Honour.

DaleC said...

Dave - you are talking like a Conservative. Republicans spend too much these days, too.

I keep Googling the stimulus package that got us out of the recession in the late 70's early 80's.

I can't find it, but there had to be one, right?

Dave said...

Dale, watch it. Doc and Thomas aren't conservatives. I'm thinking were all just rational.

And Debo, comments are goood, keep them up. But! I want a post from you.

DaleC said...

It's okay... I talk like a Liberal sometimes and oters a Moderate.

I'm usually drunk when I do it, but what the heck. I used to do it a lot when trying to pick up girls. Good thing I'm married and can be myself now :-)