More Stimulus Money Wasted

A lot of money was wasted in weatherization projects paid for by the stimulus package, note The New York Times Green Blog and Professor Jonathan Adler.

Eighty percent of homes audited by federal investigators in Illinois “failed final inspection ‘because of substandard workmanship.’ In some cases, technicians who tuned up gas-fired heating systems did so improperly, so that they emitted carbon monoxide ‘at higher than acceptable levels.'”  In two-thirds of the homes audited, “contractors billed for labor charges that had not been incurred and for materials that had not been installed.” Illinois itself “had found a 62 percent error rate when it re-inspected homes weatherized by CEDA,” and that “some of the work created fire hazards.”

Stimulus money also went to prisoners and dead people, wasteful welfare spending, abandoned bridges to nowhere, and unnecessary government buildings.  The stimulus subsidized foreign green jobs and wiped out jobs in America’s export sector.

Liberal newspapers, like the editorial boards of The Washington Post and The New York Times, now parrot false claims by the Obama administration that the stimulus has “saved or created” jobs, and cite a non-existent consensus among economists in support of that claim.  But in reality, many leading economists, including Nobel Prize winners, were skeptical of the stimulus, including but not limited to Alberto AlesinaRobert BarroGary BeckerJohn CochraneEugene FamaRobert LucasGreg MankiwKevin MurphyThomas SargentHarald Uhlig, and Luigi Zingales. The “‘stimulus’ is not the road to economic recovery. It’s the problem, not the solution, writes Nobel laureate economist Vernon L. Smith.” The Cato Institute even ran full-page ads in The New York Times and Washington Post, featuring a statement signed by 200 economists opposing the stimulus package.

The Washington Post itself once admitted that there was no consensus among economists for the stimulus, conceding that “[f]iscal stimulus is far from a sure-fire remedy. Economists disagree about the efficacy of every pump-priming effort from the New Deal to last year’s tax rebates. In general, fiscal policy had fallen out of favor in economics. . .Many economists note Japan’s failed attempt to borrow and spend its way out of a recession during the 1990s” through “repeated stimulus packages. As it is, Japan piled up a massive debt and recovered only modestly, leaving it vulnerable to today’s downturn.” (See Editorial, “Priming the Pump,” Jan. 25, 2009, at p. B6).