Friday, January 16, 2009

Obama's Stimulus - Making Big Brother Even Bigger

Alright. I pulled out the scalpel and dissected Obama's Stimulus Package (Mind out of the gutter!)

For your downloading and viewing pleasure, I've uploaded my spreadsheet for your enjoyment. You may
download it here.

I've gone through the $363,292,050 that is itemized throughout the bill that was made available for download.

Here is how I've broken it down in summary, in an effort to examine just how much of a "stimulus" our economy will actually see from this.

1. Ready to Go Construction, Maintenance or Upgrades - $86,687,300,000 (23.86%)
2. Government Administration - Salaries & Program Expenses - $33,433,750,000 (9.20%)
3. Government Administration - Redistributive Programs - $23,646,000,000 (6.51%)
4. Funding Toward Research - $16,270,000,000 (4.48%)
5. Funding Toward "Potential" Construction or Employment - $89,479,000,000 (24.63%)
6. Funding for "Potential" Government Projects or Employment - $102,810,000,000 (28.30%)
7. WTF??? - $10,9666,000,000 (3.02%)

My interpretation is that Category 1 will provide short-term stimulus to the economy via the creation of construction jobs. Likely this will create something of a government funded construction bubble for the next 3-5 years.

In conjunction, Category 5 holds via grants and loans, the possibility of generating construction jobs or other employment. Likely these grants could begin generating value into the private economy a year down the road, probably lasting 3-5 years.

That gives us a total of a little over $176 billion that the government will be "injecting" into the private sector economy. This "stimulus" comprises 48.49% of the entire act. Less than half of the Econonomic Stimulus Package will actually stimulate the economy!

I created Categories 2, 3 and 6 in order to generate an idea of how much money would be going into government programs. These allow us to see how much the government is going to grow if this bill is approved. In these categories we can see that approximately $160 billion is allocated toward making the government bigger. This is 44.01% of the entire bill that will not create a single job in the private sector, and cannot be assumed to help the economy pay this bill back!

Category 3 shows that we are allocating 6.51% of the bill to Research, which is unlikely to provide stimulus to the private sector economy, and cannot be applied in a payback analysis.

I created Category 7 to encompass "floating money," as described in
my post from earlier this morning, along with monies allocated to programs I consider to be completely useless, particularly the $5.15 billion directed squarely at ACORN. These items make up another 3.02% of the bill that cannot possibly assist in paying back the overall investment.

Congressman Obey's report indicates that they have allocated $550 billion to stimulate the economy. Obviously you can see there is another $190 billion missing from my analysis.

Ace reports that there is an $87 billion allocation for "Temporary Increase in Medicaid Funding." I haven't found it actually in the Act. Assuming it's there, I guess that cuts the gap down to $103 billion.

This is also another $87 billion invested that cannot possibly assist in creating a payback on this bill.

Of the $450 billion I've been able to find that the government is "investing" to "stimulate" the economy, only $176 billion will actually find its way into the private sector. This is only 39.11% of the "investment," compared then to 54.89% allocated to growing big government!

As taxpayers, we must assume that the remaining $274 billion is a complete loss.

I'm still missing out on $100 billion dollars. Until I can see something that actually says where it's going, I can't really count it in the process.

You'll pardon me, however, if I can't help but feel it's going to be added into the percentage that makes Big Brother even bigger.

UPDATE: See for more up-to-date information.

UPDATE: See my newer breakdown of the Senate's Stimulus, as well as a Pie Chart.


  1. Paul--take a look at this analysis, and compare to yours:

    excellent work my friend

  2. I don't understand how $274 billion is a complete loss. I agree there is not a tangible ROI. However, money is still passed from one hand to another. Money just doesn't disappear. Money will find a way to circulate back into the economy whether the money is going from the hand of the consumer and straight into the hands of pharmaceuticals (for prescription drugs), banks (to pay back loans), or retail (to purchase clothes, goods, etc). I do agree job creation should be the first priority to stimulate the're not entirely wrong there, but thanks for breaking this down.

  3. Anonymous,
    Believe it or not, money CAN actually be lost, that is by decreasing the value of the U.S. dollar. This is exactly what will happen if this stimulus bill gets passed. As Paul pointed out, government programs won't create any new jobs in the private sector and therefor won't stimulate the economy.

    Thank you so much for this breakdown of the proposed stimulus bill. Your post will be a big help with the phone call I'm about to make to my representative.

  4. Anonymous,
    I think that when Mr. Kroenke says that it is a complete loss, he doesn't mean that the $274B just disappeared. While Patiot Girl is right that money can actually be "lost", I think that he actually meant it's a complete loss as far as any stimulation is concerned, and he's exactly right. ON a side note, while you're right that the cash itself will circulate, and economy is not a closed system. If it was, we would never progress at all, and there would be no tangible difference between fiscal policies. The variable is work: some uses for money produce more of it, and others less. By producing the least possible work, government spending is the least efficient, and therefore the worst possible use for it.

  5. MH is correct. That $274 billion is going into big government programs that cost the government money, without providing a return value in new tax revenue.

  6. The weakness of your analysis is that you are setting out to prove a point -- thus you study the information, not to discern the real results of the spending (which are hardly to be seen as an investment with a defined return in income), but to show a conclusion that you had arrived at prior to the investigation.

    While I may share similar opinions, I do not let them influence my study of the data.

  7. I did not set out to prove a point. I set out to organize all of the data into some kind of set that would make sense on a summary level.

    My point was generated as I began to move my way through the bill and the spending allocations.

    There are over 150 "departments," if you will, that monies are being allocated to.

    Conceptually, we need a way to understand it on more of a summary level.

    Feel free to go through the data yourself and begin a debate as to whether or not some of my allocations are correct.

    I'm not Al Gore.

    If you feel I'm wrong with something, I am open to the debate.

    But your accusation, which is essentially that I wrote my article and then inserted the data to fit it, is incorrect.