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Paul Krugman is right to raise his eyebrows at Barack Obama's boast that stimulus projects are coming in “ahead of schedule and under budget.” As Paul says, "Ahead of schedule is good. Under budget — well, ordinarily that’s a good thing. But the point of the stimulus is to increase spending! So if we don’t spend as much as expected, that’s less stimulus...if the projects really are coming in cheaper than expected, that doesn’t mean we should bank the savings; it means that we need more projects."Word. The trouble with the stimulus is that it inverts the metrics by which we normally judge legislation: A "good" stimulus would be creative about pumping massive amounts of money into the system. That will entail a lot of projects that otherwise would not qualify for funding or would be seen as basically frivolous. For a longer take on this, check out Alex MacGillis's "the Case for Waste." As he writes:
Missing amid all these high-minded calls to protect taxpayer dollars is an awkward question: When the whole point of a major government spending program is to stimulate the faltering economy as quickly as possible, what exactly counts as "wasted" money? After all, if some stimulus cash is misspent -- say an errant official or contractor buys himself a Cadillac or a Harley Davidson, only to suffer the full force of law -- might not such fraud boost the economy more than if the cash languished in a law-abiding state account? All that monitoring, however well-intentioned, may undercut recovery by compelling officials to spend more slowly to avoid hearings, prosecution, or embarrassment in the media.It creates a tricky political question, too: Are Democrats better off in the next election if unemployment is lower or if the stimulus plan is judged a sterling example of effective federal administration? "Both" may not be an operative answer.
