There was hardly any waste or fraud in the stimulus package. Not only that, it's hitting all of its job creation targets.
That's the message the White House released on Friday with its new report on the $814 billion measure, whose cost exceeds that of seven years of war in Iraq.
And for all of you wingnut doubters out there — Paul Krugman, for example — the stimulus isn't a failure. It's working just fine. “We continue to show consistent progress on your commitment to create or save 3.5 million jobs by the end of calendar year 2010,” Vice President Biden wrote.
That's one way of thinking about the stimulus. Then there's the way the nation thinks about it. This week's Washington Post/ABC News poll shows that 68 percent believe that stimulus funds have been “mostly wasted.” With two-thirds of the money already out the door, the same number believes the economy is either “getting worse” or “staying the same,” and 90 percent view its current state as “not so good” or “poor.”
Whatever its economic merits, the White House has been utterly routed on the stimulus as a political issue. The stimulus now appears in nearly every Republican campaign ad. Democrats prefer not to discuss it — if they have to, they usually avoid the dreaded “S-word” and stick to “Recovery Act.”
Who knew that giving away free money could become such a political loser? President Obama has attributed the setback to the difficulty inherent in proving any negative. The implication is that if we hadn't passed his stimulus, unemployment would be at 11 or even 15 percent, instead of the current 9.6 percent.
This form of argument has a poor track record: “If we hadn't started a war in Iraq, the terrorists would be attacking us here.” But what if this isn't a messaging problem at all? What if borrowing hundreds of billions of dollars, filtering them through the federal and state bureaucracies, and then redistributing them is just a lousy way of creating jobs?
This isn't just a question of all the dubious projects you've read about, such as the bridge in Hillsborough, N.H., that literally does not cross the river, or the wheelchair ramps in Wayne, N.J., that are not attached to sidewalks, or those for studying what happens when monkeys get high on cocaine. This is about a possibly faulty concept to which both parties return in economic hard times, despite its repeated failure. (Don't forget that President George W. Bush signed two stimulus packages, neither of which is credited with boosting the economy.)
Even if the stimulus does “create or save” 3.5 million jobs — and based on the job numbers this year, it would have to be mostly “save” — it will have done so at the cost of $233,000 per job.
If you have been in your current job for years, and your salary is significantly below $233,000, do you think it would cost your employer that much just to avoid laying you off? Or think of it this way: Is that $233,000, in the government's hands, somehow more capable of creating a job than it would be in the hands of an investor, a small business or a large corporation?
Supply-side economists were mostly ignored last year when they argued that any economic benefit from a stimulus package is offset when the government taxes, borrows or prints the money for it. That unless the money comes from a vault or from someone's mattress, and is literally being put to no use at all, its reintroduction into the economy is a wash, the equivalent of scooping water from the deep end of the pool and redistributing it to the shallow end.
Maybe we should have listened then, when we were $814 billion richer.
David Freddoso is The Examiner's online opinion editor. He can be reached at email@example.com.