Stimulus Maximus Update #12: Money Going to the State

John J. Walters Apr 23, 2010

This will be the last of the scheduled (Monday-Wednesday-Friday) Stimulus Maximus updates,[1] but that doesn't mean that I won't continue to write about the stimulus. On Monday I will post the dramatic "Sort Of Conclusion" and from there I will continue to post whenever I find something worth your valuable time.

That having said, today I am going to revisit an idea that I explored in Stimulus Maximus Update #8, as I realized now that I did an incomplete job looking at the money going to the state and local governments in Maryland at the time.

What I wrote then still stands -- there were nearly 400 grants (totaling over $850M) given to the state, to cities, to counties, and to towns. More than half of these grants contain absolutely no information about what they have been or will be used for.

But I noticed, while sifting through the MD State Summary looking for new topics to write about (as I so often do), that there are many more government-run agencies and organizations that received money from the stimulus act that I hadn't included. So while the generic city/county/town governments are all getting money to plug the holes in their budgets, many individual programs are as well.

By my estimates, almost one third (1,082 of 3,561, if I picked out all the right ones) of the total number of grants being awarded in Maryland were given to governments or government-run programs. The total amount awarded was $2,110,231,052.00 of the $3,589,822,263.75 given out in total in Maryland.

That, by itself, is insignificant. I would expect the government to take care of its own before giving the money to private businesses. In fact, I would rather not be giving public money (i.e. my tax dollars) to private businesses. This is not "from each according to his ability to each according to his need."

The interesting thing about this is that the average cost per job saved or created is actually lower for the governments alone than the state-wide average. The comparison is $1,533,406.44 for local governments and $1,849,424.08 for all stimulus recipients in Maryland. I'm not sure if this is because governments have a tendency to over-report the number of jobs (or vice versa) or if they actually are acting more efficiently than the private recipients. Neither one would surprise me.

I owe no loyalty to the private recipients of the stimulus money. As someone who does not support government redistribution of wealth I look at it as my duty to pay what is required (to avoid going to jail) but to take as little advantage as possible of the handouts that this legalized theft creates.

So it wouldn't shock me if those companies who readily accepted stimulus dollars spent them in an even more cavalier fashion than the local governments. All this would be to me is another example of how the stimulus isn't working. And it would be another instance of Maryland winning at everyone else's expense.

I do wonder, however, why Governor O'Malley claims in his 2011 Budget Highlights that the stimulus money had created 14,000 jobs in Maryland by October 2009 when even the "optimistic" estimates of the federal government don't reach half that. And what he plans to do next year when he no longer receives billions of dollars of "free money" to keep his sinking ship afloat after making such a big deal out of cutting back. That stimulus thing was sort of a one-time deal (I hope).

The fact is: we have programs in place that mandate spending increases each year. Until we do something about that setup, we'll have to deal with increasing taxes or an ever-widening budget gap -- or both. Luckily I just love paying taxes, and so does everyone else I know.



[1] The reason being that I will soon be working on making the "Stimulus Maximus" project into something a little more serious: a short series of articles that we will try to get published as widely as possible to raise awareness of the various shortcomings of the stimulus act.