The Palmetto Insider

The blog of the South Carolina Policy Council

Fuzzy Math Fuels Skepticism of Stimulus Spending

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Increasingly, editorials and news reports are calling into question not only the accuracy of the federal government’s stimulus spending and jobs allegedly created, but the fundamental wisdom of massive government spending, instead of reducing the tax burden on individuals and businesses to fuel economic growth.

“As the nation looks at the prospect of continued high unemployment despite a modest economic recovery, some economic policy choices made by President Obama and senior congressional Democrats at the beginning of the year have become apparent political traps,” said the Post & Courier in a November 23 editorial. “Among these was the decision to emphasize government spending over tax cuts in the fiscal stimulus bill and to call it a ‘jobs bill’ to ‘create or save’ 3.5 million jobs.”

A November 22 story in The Herald reports that a debate “over phantom congressional districts and the number of jobs created by the $787 billion economic-stimulus plan… is raging across South Carolina among private-sector recipients of stimulus money and among state government officials tracking the funds and their impact.”

The Herald reported that, as South Carolina unemployment reached 12.1 percent, South Carolina Comptroller General Richard Eckstrom said “the true number of stimulus-related jobs in South Carolina is likely half the number claimed by Obama.” Even boasts by South Carolina politicians about saving teachers’ jobs is “demagoguery,” Eckstrom charged in an article in The State. “We’re not going to fire teachers,” he said. “We never have, at least not in my lifetime.”

Although the Obama administration has changed the Web site so that it no longer lists nonexistent congressional districts, the embarrassment and damaged credibility continue. In ZIP code 29211, for example, reports stimulus spending of more than $640 million, and zero jobs created. In downtown Columbia, ZIP code 29201, the government says it created 5,186.7 jobs with just under $400 million in stimulus spending.

“Accurate reporting on the jobs bill’s impact may not be possible,” said the Post & Courier, adding that “controversy over stimulus jobs undermines the expectation that government can lead a way out of the ‘jobless recovery’ by spending more.”

If aggregate numbers for both for spending and job creation are unreliable and inflated, at least you can drill down to see specific example of what your tax dollars, by way of stimulus money, are buying.

Visit Stimulus Watch 2.0 to find and rate stimulus projects in your area. Here are a few examples, according to the most recent data available from Stimulus Watch:

  • The South Carolina Research Foundation received $264,491 for research onDamped and Sub-damped Lyman-alpha Absorbers: What Are They, and What Do They Tell Us About Galaxy Evolution?” Jobs created: 1. (The South Carolina Research Foundation has received more than $15 million in stimulus dollars for research funding.)
  • Aiken has received the most stimulus money, more than $1.634 billion, most of which will be spent to decommission two nuclear reactors at the Savannah River site.
  • In Rock Hill, $399,195 for salary increases and longer hours for Head Start employees. Job creation: none.
  • When in doubt, pave. Statewide, $440,991,384 has been funneled to the Department of Transportation for road resurfacing, vehicles, maintenance, and other projects.

South Carolina has its own version of stimulus dollars: special-interest tax breaks to a few businesses in the state, while the vast majority of businesses struggle under high corporate taxes and burdensome government regulation. Research published this month by the Policy Council in Unleashing Capitalism: A Prescription for Economic Growth and Prosperity in South Carolina, shows how dramatic growth in government and corresponding decline in free market forces have stalled economic growth in the state, increased unemployment, and made South Carolina one of the poorest states in the nation.

South Carolina’s bloated tax-and-spend government, like the federal stimulus dollars that are fueling even more government control over state and federal economies, stifles the economic freedom necessary for meaningful, long-term economic growth.

It’s not economic theory; it’s a drain on all citizens of South Carolina that’s playing out every day.


Written by SC Policy Council

November 24, 2009 at 10:49 am

One Response

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  1. Extremely nice post. Really hit on some of outstanding ideas. Thank you for taking the time to put that together. Putting this website in my RSS feed!


    March 23, 2010 at 3:44 pm

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