Defining a "Stimulus Package"

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Jim Manzi has a good summary of the major components of the proposed stimulus package at The American Scene. A couple of charts stood out:



Manzi discusses this in some detail, but the timing difference between the spending component ($604 billion) and the tax reduction component ($212 billion) of the package is fairly dramatic. Notice  that almost half of the spending will occur during or after 2011 (with only 15% in 2009). This is hard to reconcile with the idea that this spending is intended for the current recession. Here’s Manzi:

Here are all the items that I saw them identify as individual programs with more than $10 billion of projected outlays, in the order that they call them out:

• $20.0 billion to increase the maximum benefit under the Supplemental Nutrition Assurance Program (i.e., Food Stamps)
• $18.5 billion for energy efficiency and renewable energy programs
• $20.4 billion for programs administered by the Department of health and Human Services
• $20.0 billion to renovate elementary and secondary schools
• $17.6 billion for Pell grants and other student financial assistance at post-secondary institutions
• $29.1 billion for other elementary and secondary educational programs
• $30.0 billion for highway construction
• $13.1 billion for other transportation programs
• $11.2 billion for housing assistance programs administered by HUD
• $19.5 billion (minimum, could be higher, as per Title XIII) for education grants to states
• $27.1 billion for increase unemployment benefits
• $13.3 billion to increase health insurance for unemployed workers
• $11.1 billion for “Other Unemployment Compensation”
• $20.2 billion for Medicaid and Medicare incentive payments to encourage providers to improve healthcare IT

What does this sound like to you? It sounds to me like a wish list for the left wing of the Democratic Party.

I tried to go quickly through the spending for all categories and crudely map them to the OECD classification system that allows for the comparison of spending across governments in the developed world. The huge categories of spending under this bill that I could map to categories other than “General Spending” are in Social Protection (about $90 billion), Education (about $90 billion) and Environment (about $55 billion). Interestingly, Defense represents only about 3% of the spending in the bill (as opposed to 12% of U.S. government spending overall, or about 3% of French overall government spending as a point of comparison) and Public Safety represents only about 1% of spending in the bill (as opposed to about 6% of U.S. government spending overall, or about 2% of French government spending overall). In other words, the net effect of this bill is to shift the distribution of U.S. government spending as a whole away from defense and public safety and toward social programs: for good or ill, to make the U.S. into more of a European-style social welfare state. Because the amount of spending is so huge, this will be a material, not notional, shift. Eventually, we will emerge from this recession / depression / whatever it’s going to be. When that happens, is this really the kind of government we’re going to want?

I am of two minds here. First, I do not have a problem with funding health insurance or unemployment insurance, per se. Secondly, the Democrats won, and they can pass whatever legislation they so choose.

But is it too much to ask for truth in labeling? A “stimulus package” in which almost half of the spending won’t be spent for another two years is either designed in anticipation of a very long recession, or its not really a stimulus package. Even granting the former for the sake of argument, additional spending for 2011 could always be added either in late 2009 or early 2010 if needed. It is much less likely that spending, once authorized, will be de-authorized, even if it is no longer needed. Why the rush to commit those funds now?

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  1. Also, one can’t help thinking that making promises to spend vast amounts of money _later_ will have the dual effect of not helping the economy now and making our debt load even worse.

    It’s ironic that just when the Bush administration (and the 2000-2006 GOP led congress) went on such a spending spree as to seemingly remove one of the GOP’s most popular issues (fiscal responsibility) the Obama administration and democratic congress should immediately go so far overboard with incurring more debt as to make it possible that in 2-4 years the GOP will come back with a, “These guys inherited a recession and took it as a license to spend money they didn’t have. Would you do that?” campaign.

  2. What part of the word “pork” is difficult to understand? Only a small portion of this fire-hose of pork will create jobs, most of it is simply a massive expansion of the federal government. Anyone who thinks these spending levels are temporary is insane. This is like drugs, once cities, states and special interest groups get a taste of federal “crack” they will never give it up.

    Before anyone asks… yes, I am completely critical of the Bush administration’s expansion of federal spending.

  3. This Wall Street Journal editorial is right on target:

    As a boomer I agree with Victor Davis Hanson:

    “If anyone wished to know what the baby-boomer generation would do when, in its full maturity, it hit its first self-created, big-time recession, I think we are seeing the hysterical results. After two decades of unprecedented economic growth, rampant consumer spending, and unimaginable borrowing to satisfy our insatiable appetites, we are suddenly going into even larger debt and printing trillions of dollars in paper money to ensure that someone else after we are gone pays the debt. As if the permanent solution to a financial panic and years of spending wealth we didn’t create were a government take-over of the economy in the manner we currently witness in Spain, Italy, and Greece—or the high-tax, high-spend ethos of a bankrupt California.”

    The Great Bailout Swindle of 2008 is being followed by the Great Bailout Swindle of 2009. This is economic lunacy, and our great grandchildren will still be trying to repair the damage caused by this drunken sailor approach to public spending embraced by both parties.

  4. Contra President Clinton, I think that the era of small government is over. It’s good to see that now that the GOP has been routed into being an almost significant minority it has rediscovered its fiscal sanity, but it’s a little too little, too late, for the party and for the country.

  5. @ tito

    Tito I asked you a simple question about what you believe about excorcism please answer it to the best of your ability. To leave links that I may or may not understand is wrong. My question to you is really very simple please answer it on the thread over at unreasonble faith. Thank you mark.

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