Thursday, August 5, 2010

Some of What Is Seen Isn't So Hot Either

My op-ed, Stimulus: Out of Sight, Out of Mind, pointed to the fact, made popular by Frederic Bastiat and Henry Hazlitt, that identifying beneficiaries of fiscal stimulus projects such as the "American Recovery and Reinvestment Act" is relatively easy, but seeing the harm due to taxation and lost private investment is much more difficult.

A new study issued by Senators Tom Coburn and John McCain identify a plethora of projects funded by stimulus money in which the costs can be observed. What is seen is not pretty. As I said in my commentary, because such stimulus policy directs scarce economic goods away from their most productive uses, fiscal stimulus is worse than useless, it is destructive.

The study from Coburn and McCain identifies 100 projects where the costs clearly outweighed any benefit and net jobs were lost. You can read a good summary of the study here at Business Insider. Economically destructive projects funded by the stimulus plan included:
  1. $554,763  used by the U.S. Forest Service to replace windows in an Amboy, Washington visitor center that closed in 2007.
  2. $62 million poured into the disastrous North Shore Connector to professional sports stadiums and a casino in Pittsburgh, Pennsylvania.
  3. $1.9 million received  by the California Academy of Sciences  to send researchers to the Southwest Indian Ocean Islands and east Africa, to capture, photograph, and analyze thousands of exotic ants. 
  4. FEMA stalling two Texas fire stations for more than a year due to increased costs and red tape because it received $7.3 million.
  5. $89,298 spent by Boynton, Oklahoma to replace new sidewalks with even newer sidewalks that lead to a ditch.
I should note that it is more than a little disturbing to see McCain coming out for fiscal soundness only now. We should not forget that in 2008 he voted in favor of the Keynesian inspired tax rebates as well as the Financial Bailout. Although he is known generally as a conservative, he has a knack for voting interventionist when it really matters.

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