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Showing posts with label stimulus. Show all posts
Showing posts with label stimulus. Show all posts

Friday, June 26, 2020

Government Pays $1.4 Billion to Dead People

There have been problems with efforts to stimulate the economy in the wake of the coronavirus recession.

From the Government Accountability Office:
Economic impact payments. The Internal Revenue Service (IRS) and the Treasury moved quickly to disburse 160.4 million payments worth $269 billion. The agencies faced difficulties delivering payments to some individuals, and faced additional risks related to making improper payments to ineligible individuals, such as decedents, and fraud. For example, according to the Treasury Inspector General for Tax Administration, as of April 30, almost 1.1 million payments totaling nearly $1.4 billion had gone to decedents. GAO recommends that IRS should consider cost-effective options for notifying ineligible recipients how to return payments. IRS agreed with the recommendation.

Monday, March 23, 2020

"Squabbling"

"The first rule of decision making is that one does not make a decision unless there is disagreement." -- Peter Drucker

Charlie Sykes at The Bulwark:
The storyline today will be the markets and the stimulus.

Even in the best of times legislating over how to spend $2 trillion is a messy affair; lobbyists swarm like locusts, secret deals are cut, slush funds and precedents are conjured from imaginary dollars (it will all be debt), and we will have a national debate over priorities and values.

Now compress that into a few days and overlay it with PANIC.
The mood of the hour is Do Something. Go Big. Stop Squabbling, which is understandable considering the hit the economy is about to take.
But it is also the formula for bad legislation and even worse policy. The "squabbling" is what we do in a constitutional Republic; it's the way the system was set up. We're not supposed to give the federal government the power to essentially take over the economy in a mere weekend.
Conservatives used to understand the need for prudence. But conservatives also used to be against socialism too.

The stakes are high not just for the parties in DC, but for the rest of us as well, because we are about to explode the national debt in a one-shot effort to stave off depression. So it seems a good idea to get it right, and keep the sleaze to a minimum.

Sunday, August 25, 2013

Job Creation

At The Wall Street Journal, Cypress Semiconductor CEO T.J. Rodgers argues that the private sector tends to be more efficient at creating jobs than the public sector.
A couple of years ago, I decided to invest in my hometown of Oshkosh, Wis., by building a $1.2 million lakefront restaurant. That restaurant now permanently employs 65 people at an investment of $18,000 per job, a figure consistent with U.S. small businesses. If progressive taxation in the name of "fairness" had taken my "extra" $1.2 million and spent it on a government stimulus program, would 65 jobs have been created?

According to recent Congressional Budget Office statistics on the Obama administration's 2009 stimulus program, each job created has cost between $500,000 and $4 million. Thus, my $1.2 million, taxed and respent on a government project of uncertain duration, would have created about one job, possibly two, and not the 65 sustainable jobs that my private investment did.

On the other end of the capital-intensity scale, Cypress Semiconductor required huge investments to create jobs in its chip-manufacturing plants. Between 1983 and 2003, those investments totaled $797 million and led to the creation of 4,033 jobs at an investment of $198,000 per job created. Thus, my own experience on the cost of job creation ranges from $18,000 to $198,000 per job, compared with $500,000 to $4 million per job created by the Obama stimulus program.

This data squares with the broad numbers showing that private investment is more efficient than government spending in creating jobs. In other words: Every dollar that is taxed away from private investment and spent by government produces fewer jobs than the jobs destroyed by the loss of private investment

Friday, December 3, 2010

Faith-Based Stimulus

In our chapter on civic culture, we discuss federal subsidies for faith-based organizations. In a previous post, we discussed the current administration's White House Office of Faith-Based and Neighborhood Partnerships.

Ben Smith and Byron Tau report at Politico:

The story of the Obama administration's large-scale spending on faith-based groups has been largely untold, perhaps because it cuts so sharply across the moment's intensely partisan narrative. And in fact, when the stimulus was being debated in February 2009, conservatives attacked the bill as "anti-religious" in its spending guidelines.

But an analysis by POLITICO found that at least $140 million in stimulus money has gone to faith-based groups, the result of an unpublicized White House decision to spend government money, where legal, supporting religiously inspired nonprofit groups. And that decision was just the beginning.

In an aggressive attempt at outreach, federal agencies, in conference calls and online seminars, instructed faith-based groups on how to apply for the grants, and federal officials sometimes stepped in when the state officials who distribute the money were reluctant to spend it on groups associated with churches and other religious establishments.

Tuesday, November 17, 2009

Recovery.gov and Dubious Statistics

In chapter 15, we note that a major role of bureaucracy is to gather and publish statistics. It is a difficult job, and sometimes the bureaucracy makes mistakes. Consider, for example, measurements of the effects of economic stimulus legislation. ABC reports:

Here's a stimulus success story: In Arizona's 15th congressional district, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that's what the Web site set up by the Obama administration to track the $787 billion stimulus says. There's one problem, though: There is no 15th congressional district in Arizona; the state has only eight districts. And ABC News has found many more entries for projects like this in places that are incorrectly identified.
Other news organizations have found additional problems.

The Chicago Tribune:

More than $4.7 million in federal stimulus aid so far has been funneled to schools in North Chicago, and state and federal officials say that money has saved the jobs of 473 teachers. Problem is, the district employs only 290 teachers. "That other number, I don't know where that came from," said Lauri Hakanen, superintendent of North Chicago Community Unit Schools District 187.

The Boston Globe:

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

The Sacramento Bee:

Up to one-fourth of the 110,000 jobs reported as saved by federal stimulus money in California probably never were in danger, a Bee review has found. California State University officials reported late last week that they saved more jobs with stimulus money than the number of jobs saved in Texas – and in 44 other states. In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees. That total represents more than half of CSU's statewide work force. However, university officials confirmed Thursday that half their workers were not going to be laid off without the stimulus dollars. "This is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."

The Associated Press:

The AP reviewed a sample of federal contracts, not all 9,000 reported to date, and discovered errors in one in six jobs credited to the $787 billion stimulus program - or 5,000 of the 30,000 jobs claimed so far. Even in its limited review, the AP found job counts that were more than 10 times as high as the actual number of paid positions; jobs credited to the stimulus program that were counted two and sometimes more than four times; and other jobs that were credited to stimulus spending when none was produced.