Posted by
Defend America on Tuesday, March 02, 2010 6:35:56 PM
Wasted Stimulus
By EDWARD L. GLAESER
...
I wonder about the wisdom of trying to lick this recession by
spending more on highways. Can stimulus spending, in a country as large
and diverse as the United States, be well aimed at the places that need
it most?
Last week, I briefly discussed the geographic distribution of Recovery Act funds. The figure shows the relationship between per capita Recovery Act grants awarded and unemployment across states, which shows that stimulus aid was not particularly well matched with need:
On average, for every extra percentage point of the labor force that is unemployed, a state got $25 less per capita.
Lest anyone think that this spending is actually responsible for the
low unemployment rates, the same relationship appears when using
December 2008 unemployment data. For every extra percentage point of
the labor force that was unemployed in that month, subsequent grants
were reduced by $33 per capita.
There is no significant relationship between the change in the
unemployment rate and the level of per capita grants, which is not that
surprising given that much of the grant money has not even been
received.
http://economix.blogs.nytimes.com/2010/03/02/wasted-stimulus/