Details of the stimulus package are coming out and, as I read it, a lot of it is devoted to operating costs rather than anything that can reasonably be considered investments. I support some of the provisions:
Aid to the poor and unemployed — $43 billion to provide extended unemployment benefits through Dec. 31, increase them by $25 a week and provide job training; $20 billion to increase food stamp benefits by 13 percent; $4 billion to provide a one-time additional Supplemental Security Income payment; $2.5 billion in temporary welfare payments; $1 billion for home heating subsidies; and $1 billion for community action agencies.
I think those are likely to be put back into the economy very quickly. Others I’m pretty skeptical about:
Education — $41 billion in grants to local school districts; $79 billion in state fiscal relief to prevent cuts in state aid; $21 billion for school modernization; $16 billion to boost the maximum Pell Grant by $500; $2 billion for Head Start.
Health care — $39 billion to subsidize health care insurance for the unemployed and provide coverage through Medicaid; $90 billion to help states with Medicaid; $20 billion to modernize health information technology systems; $4 billion for preventative care; $1.5 billion for community health centers.
That’s a sizeable boost to the subsidies in both areas. The grants to local school districts will probably offset state expenses and take pressure off the states. That’s the case with a lot of the health care provisions, too.
Those have some merit – the state colleges in my state are getting hit hard, and an extension in Pell Grant funds would go a long way to keep some students in school (or preventing them from going into debt for it).
I’m skeptical of additional school district funding without attached reforms in the school systems.
Steve at OTB had a good post that enumerated all of the problems with the stimulas proposals. I didn’t take the opportunity to complain that not all of the stimulas proposals fail on the enumerated grounds. For example, tax cuts and unemployment benefits are more temporary and create less problems of pork and corruption. (They may not be effective, but that’s another issue)
It would be interesting, and perhaps I should encourage Steve (but I’m a TARP guy), into analyzing each item on his criteria. I rather think Obama should be expected to do something and perhaps the focus should be on relative merits.