Tuesday, February 3, 2009

Slicing Up the Senate's Stimulus

I've completed entering and breaking down the Senate's version of the Stimulus in spreadsheet format. You can find the entire PDF version of the bill here. My spreadsheet is here.

I've broken down the Senate version a bit differently than I did the House version. I wanted to simplify my own breakdown a bit. My summary breakdown is as follows:


1. Government Overhead & Administration $14,180,545,000 3.37%
2. Direct Economic Stimulative Spending $59,877,029,000 14.23%
3. Increase in Non-Economically Stimulative Government Programmatic Spending $88,863,250,000 21.12%

4. Potentially Stimulative Loans/Grants $251,626,986,000 59.80%
5. Indeterminate "Slush Fund" Monies $6,245,473,000 1.48%

TOTAL $420,793,283,000


As you can see, we've still got a substantial amount of money that is allocated purely to growing the government. Category 5, as an explanation, are monies where nothing but the program name was stated, with no descriptive reference as to what the money was for at all. Category 3 encompasses additional funds to government spending programs, such as extra monies for finding temporary housing for the homeless.

Categories 1, 3 and 5 at this point have to be considered as governmental programmatic spending increases that will have little to no direct stimulative impact on the economy. These three categories add up to a total of just over $109 billion, approximately 26% of the total direct spending package. While this is not the over 50% of government growing dollars that the House had allocated, it still needs to be considered as unnecessary from the standpoint of actually stimulating the economy.

In terms of the direct and immediate stimulation of the economy, Category 2 is the only category in my breakdown that effectively guarantees that spending will reach the economy directly, and with some measure of expediency. This category is, in my opinion, what constitutes the "shovel-ready" projects in the bill.

As we can see, this is a mere $59.877 billion, and only amounts to 14.23% of the total spending.

You will recognize that Category 4 is the largest category. This comprises all of the spending that is allocated as Loans, such as the Section 502 Loans allocating funds to subprime loans for housing in rural areas, or grants that need to be awarded competitively, first from the federal government to either the state or local body, then to the individuals. In many cases it is difficult to discern what in this category might stimulate the economy, particularly in the case of the $79 billion going to the states under "Education." It is really wholly undefined as to what this amount should be used for.

Potentially these funds could go to IT upgrades & computers and school renovations, and therefore eventually stimulate the economy. Potentially, however, they may go to adding school adminstrators that may or may not be necessary, in which case the economy would not be stimulated. Depending on how much goes to growing government programs, and how much goes to economically stimulative projects, the $79 billion is nearly 20% of the spending all by itself, and can drastically effect my percentage breakdowns depending on how it is allocated.


The most important portion of this bill in terms of stimulating the economy, is the meager 14.23% allocated to "shovel-ready" projects. I indicated most construction and immedately procurable equipment funds into this category. My assumption here was that these projects would be the ones ready to bid, award, and begin physical work on within the next 12 months.

My reason for allocating most of the loans and grants to category 4 was for the long duration that would be experienced before any real physical work takes place. The process in these cases would have private parties petitioning the local or state governments for funds for their "worthy projects" at which point those bodies would petition the federal government, who would then take time to make determinations and distribute funds to the state or local governments. Those bodies would then, in turn, make their distributions on a competitive grant basis as required by the bill. Overall, there could be well over a year before any of the funds are even approved for release, much less actually put into action. Everything in category 4 must be taken with a major grain of salt in this respect, as to whether it would actually help us out of recession, or if it would just happen to be there while we come out of the recession anyway.

It is my personal opinion that nothing in categories 1, 3 or 5 can be considered to stimulate the economy, and that it is all lost on increasing the size of an already inefficient behemoth of a government. Most dangerous in these increases in spending is that two or three years down the line, these increased budgets would become the new baseline for government spending, rather than "temporary increases."


There isn't much here that's going to actually stimulate the economy or help pull us out of this recession. While the bill has been pared down and edited in some places, the overall amount of spending has increased from the House version, while the amount of direct economic stimulative spending has actually decreased, both in volume and in percentage, from my original breakdown of the House version.

In that respect, this is a far worse bill than the House bill even dreamed of being.

I really think it's time that the President start looking at some new options here, as this really just continues to be riddled with non-stimulative and even wasteful spending.

I, myself, am particularly interested to see and analyze the details of what the Senate Republicans are proposing.

UPDATE: The "Bipartisan Stimulus" is the worst yet.


  1. I think you need to take a holistic approach to this stimulus package. Previous efforts to stimulate the economy have amounted to nothing more than quick burst of sugar that runs out when the high wears off. I was under the impression that this package is more for the long term growth. Our economy is not just in need of dollars on through ground but serious infestructure improvements. Not just physical infrastructure but social and cultural as well. Education, public housing, science, and other intangibles are part of the economy problem and have been quite neglected.

    So I think the scope of what will actually help the economy should not be confined to shovel-ready projects. Of course these are what will put paychecks in the mail immediately, but what happens when the jobs over? Hopefully, the economic seeds planted today will be ready to harvest then.

    Secondly, I am sure this package is full of pork and pet projects. That is unfortunately the way legislation works. Even if the President created a bill that saved the whales, cured cancer, and created world peace, it still wouldn't get passed unless Joe Rep from Tennessee got $25M to widen a canal outside Knowville.

    Compromising is an essential tool for a succesful government. Just look what the previous administration was able to accomplish without it.

  2. Jess-

    You and everyone else on board for the social and cultural revolution that you're all yearning for so urgently would have a leg to stand on if we had a trillion dollar surplus instead of a trillion dollar defecit.

    We already have a trillion dollar defecit, which sits on top of $10 trillion in debt to other countries. And that $10 trillion is actually on the line of $56 trillion when you eliminate the voodoo the government is doing by stealing from social security.

    Imagine this stimulus:

    - Cut the Payroll Tax and Marginal Tax Rates and put money immediately back into peoples pockets rather than as a projected refund a year from now, which goes not only to taxpayers but from me paying taxes to the guy shaking the change cup on the corner.

    - CUT GOVERNMENT SPENDING: Fire government employees. The recession would grow, but those people would have to go into the private sector instead, which with the tax cuts, businesses could afford.

    The economy would do a U-Turn, and the Government would start getting out of its hole.

    When our government not only balances the budget, but creates a surplus, then it becomes much more favorable to implement rational social and cultural spending.

  3. Paul,

    I am well aware of the deficit, and any money spent on deficit reduction will pay off ten fold... a few decades from now. But while that should be kept in mind, it shouldn't dictate our need to spend our way out of the current crisis. Where were the budget hawks for the 3 trillion we buried in the Iraqi sand over the past 5 years? Funny how they have suddenly found there oppositional voice, at at a time when the spending is on real Americans, and not just banks (read: campaign donors) and bombs.

    Anyhow, I agree with tax cuts for the middle class (payroll), they are certainly need to balance the imbalance of the last decade. But the guy shaking the cup will still need his expenses paid. Policing, health and welfare, and other expenses that state and local government incur from managing this leech. But what if we take this guy, put him in Section 8 housing, trade in his cup for a shovel, and get him off the government teet. Who knows what could happen.

    But the numbers really speak for themselves. The best return on investment our government can get is from... food stamp spending.


    No social or cultural revoluition to worry about, its just sound fiscal spending.

  4. You mention deficit reduction will pay off ten-fold "decades from now." But spending more, largely on projects that have no way of achieving an economic payback, will only further delay that process.

    Your argument about "where were the deficit hawks all this time" is a political argument, and fails address the problem now that we have arrived at the crisis point. It merely presents backward logic in a fallacious support of your own political agenda: to spend on social projects. As to where the deficit hawks were, they were where they always have been: being dismissed as Libertarian cranks who didn't know what they were talking about. How dare the likes of Ron Paul and Lew Rockwell and Peter Schiff think long term! Screw those guys!

    Your further argument about the guy shaking his cup needing his expenses paid is valid. He should get a hand in some shelter and getting back on his feet. Unfortunately our welfare system, which was intended to do just that, is corrupted through and through and no longer does anything but incentivize him NOT to work. Private charities are more efficient at helping in that respect.

  5. Thank you Paul. This is officially my favorite blog.

  6. In the news I have been reading about the bill being closer to $800 billion. Why does your analysis of the bill total to only $423 billion?

  7. This is just the "direct spending" portion. The rest of the bill deals with tax credits and bond issuances, but no actual tax cuts.

  8. Anita-

    Thanks for the compliment! I'm glad to know I've got a fan or two out there!

    Look forward to making sure OE stays your favorite!

  9. FOUR BILLION for ACORN? the same group that is under charges in 15 states for voter registration fraud? what the hell is this about????
    David Vitter offered amendment 107 to take the money for ACORN out and as usual, all but SIX democrats voted against it and it failed. so there fore, as of right now ACORN gets its money