There's a new gadget over there on the right you can use to see what's going on with the Recovery Act, or ARRA, right in your home town. My area has saved (or created) 62 jobs and received $34 million in various loans, grants and contracts. Go ahead, plug in your ZIP code and feel the surge of hope - it's happening!
ARRA is still in its early stages. So far, with about 35% of the money (in the three categories of tax breaks, grants/loans/contracts, and entitlements) out the door, we've saved (or "created") about 600,000 jobs. The total price of ARRA was $787 billion, as you'll recall, so we've accounted for about $275 billion so far. I know that the American Recovery & Reinvestment Act was more than just about job creation. It was also about satisfying the Republican mania for reducing taxes, and, fair-minded as always, President Obama saw to it that ARRA's single largest category concerns tax breaks. This might seem odd in a country where the federal budget is $3.5 trillion and the net haul from taxation is around $2.2 trillion, especially when you consider that whatever ARRA cost, the amount was going to be "borrowed" by the Treasury Department. That one might have stopped John Maynard Keynes, not to mention a Zen Master, in his tracks. ("How do we fill the void of nothing? By giving the nothing away.")
Okay, given the caveat above (it's not just about jobs), we can still do some simple long division (or "Calculator" on my tool bar can) and figure that each of the 600,000 jobs cost about $458,000. My first reaction is selfish: I really want one of those jobs. But it's all so much more complicated than that, of course.
Still, you kind of wonder. Is that really bang for the buck? My guess is this: the problem with ARRA, as with most things the Federal government in now trying to do, is that (as always) the attempted remedy came so late in the game that there simply wasn't time (or the money) to do anything other than leverage the federal government's (waning) ability to borrow money (or print it) in order to ship it out to cities and states to keep the police, firefighters and teachers on the job, and to use whatever was left to extend the already extended unemployment checks of the nation's out-of-work millions.
For my part, I don't begrudge the recipients any of that. It's a little hard to follow where all the money went, but a ton must have gone as unemployment subsidies, COBRA assistance and other not-very-exciting but very essential stuff. Besides, Paul Krugman thought it was the answer to life itself (although he was disappointed that it wasn't "bigger." How much bigger should it have been? He doesn't say, but he knows this was too small.). Maybe when fully deployed ARRA will create or save 1.8 million jobs, which is pretty good (although nowhere near the number of jobs lost in the last two years), and then certain longer-range facets of the funding, such as renewable energy and energy efficiency (about $16.8 billion), may spark more employment down the road. One can hope. It's a shame the USA is not in a position simply to devote the whole $700 billion to visionary transformation, especially of energy and transportation; if you look at another link on the right, you'll see we have spent about this amount, so far, in Iraq.
Not where our priorities are, I'm afraid. So it's all crisis management, throwing money at disasters and hoping against hope the economy simply goes into spontaneous remission, because we probably can't do this again. And when all this money is gone, and we've still got these problems of underfunded states and municipalities?
I guess we'll think of something.
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