07.09
Remember that thing we called the stimulus bill? It seems like forever ago that congress passed that $850 billion dollar demon child. Just to refresh your memory, this is the stated purpose of the stimulus bill:
SEC. 3. PURPOSES AND PRINCIPLES.
(a) STATEMENT OF PURPOSES.—The purposes of this Act include the following:
- (1) To preserve and create jobs and promote economic recovery.
- (2) To assist those most impacted by the recession.
- (3) To provide investments needed to increase economic efficiency by spurring technological advances in science and health.
- (4) To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
- (5) To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.
(b) GENERAL PRINCIPLES CONCERNING USE OF FUNDS.—The President and the heads of Federal departments and agencies shall manage and expend the funds made available in this Act so as to achieve the purposes specified in subsection (a), including commencing expenditures and activities as quickly as possible consistent with prudent management.
I started thinking about it the other day when it sort of dawned on me that I hadn’t even heard anyone mention the stimulus bill in a while. This is strange, because everyone on the right predicted that most of the stimulus money would be held back and spent during the months leading up to the November 2010 elections. That isn’t really panning out though. According to the recovery.gov website, only $201 billion (about 25% of the total) has been spent so far. And with only three and a half months to go until the November elections, I don’t think they’re gonna make it.
So, why didn’t the predictions come true? After all, it makes perfect sense that Congressmen would vote themselves a huge slush fund right after an election and then spend most of it right before the next election. Well, the answer is that you have to remember the inherent limitations of government. Government is a gargantuan, lumbering behemoth. It is incapable of doing anything on a set time table. While I am sure that those who passed the stimulus bill probably fully intended it to be spent in their own districts to help their reelection bids, the fact remains that spending $850 billion dollars isn’t exactly easy. And it’s anything but quick or efficient.
And, there is another problem. Where are all of the “shovel ready jobs” that the stimulus was supposed to create? I have seen exactly none in my travels around the state of Alabama. Evidently I’m not alone:
It would appear that most of the stimulus money spent so far has gone to the states to retain existing government jobs — teachers, police, firefighters — thereby moving state payrolls onto the national debt and allowing them to defer the hard decisions they will have to make eventually. My own observation of the narrowly limited landscape between the Sandhills and Kansas City did not reveal much in the way of highly touted “shovel-ready” construction projects, or even routine maintenance.
So, that’s where the money is going. It was a way for the states (i.e. public employees unions) to fund themselves using federal debt. Basically, the stimulus is a huge ATM card for the public sectors of each state. That makes perfect sense when you think about it. After all, that’s why money flows from Washington down through the states anyway. Money trickles down from D.C. to the states. And then from the states to local programs. Then, influence and vote buying flow back up to D.C. via organizations and individuals that benefited from the influx of money. It’s not just the stimulus bill that works this way. It’s the entire political machine that is structured like this. Just take this story as an example:
Moore’s farm — her husband died in 1999 — was among the last eight farms in Alabama to grow tobacco, mainly due to the end of a government quota-and-price-support system nearly five years ago. The eight farms shut down between 2002 and 2007, according to the latest U.S. Farm Census released earlier this year.
The biggest reason for tobacco farms’ final demise in Alabama was a decision by Congress five years ago to end a quota and price support system.
That system had been around since 1938 to help Depression-era tobacco farmers. Tobacco farmers signed up for government quotas — allotments that limited the number of acres they could grow. That helped keep tobacco prices high for farmers.
But with lessening demand for tobacco in the 1980s and 1990s, combined with a price support and quota system that kept prices high, the amount of imported tobacco grew.
As a result, Congress voted in the fall of 2004 to do away with quotas and price supports and offer a buyout to farmers who had a quota. Congress set aside $10.1 billion to pay out to farmers with quotas through 2014. The buyouts are based on a formula involving pounds of production in previous years. Farmers who had leased quotas get a portion of the buyout.
Many farmers took the buyout and decided not to try growing tobacco without the quota system, Sanford said. Nationwide, the number of farms growing tobacco fell from 56,977 in 2002 to 16,234 by the 2007 farm census. That’s a nearly 72 percent drop. But production fell only about 11 percent as some growers expanded their farms.
Besides the few Alabama farms that were growing tobacco after the 2002 census, many other Alabamians are getting annual buyout payments because they owned or leased quotas for growing in other states.
Jo Moore’s husband, Lila, died in 1999. By that time the couple had been leasing their land, barn and quota to another farmer.
Moore said she decided to take the buyout because the farmer leasing from them wasn’t making much off the tobacco. Her share of the buyout amounts to about $3,500 a year, she said.
Moore still leases her 400 tillable acres to a cotton farmer.
Here you have an entire system set up to artificially inflate the price of a product for 60 years by paying farmers not to grow more than a certain number of acres. And when it finally became untenable, instead of just ending the payments, Congress started giving those farmers cash payments in the form of a buyout. So, now they are being paid not to grow anything at all. The lady in the story, Jo Moore, now leases her land to another farmer, and in the mean time collects a check from the government for not doing anything at all. It’s farm welfare, and it’s a way to ensure that Mrs. Moore keeps on voting for the guy that promises to extend her buyout check for a few more years.
It will take a few years, but eventually all of that stimulus money will flow into these types of long-term projects to prop up the rent-seeking and vote-buying. Politics is about producing long-term stability to the super rich elites. It has very little to do with the “next election.”
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