Managing Risk in Government Stimulus Spending

(MoneyWatch)  It looks like the House and Senate will agree on a "stimulus" bill of $800 billion to $1 trillion. One of the issues that must be faced is how to deploy the money fairly, legally and ethically. The government can shovel money to anybody but face a chance that those getting it use fraud or lies to gain it. This happened with the post-Katrina aid where people in other states claimed to be victims and got cash handouts. The Washington Post reports that the Special Inspector General for the TARP Program, Mr. Neil Barofsky, has warned about one part of the program as it allows the recipients of the funding to value the assets themselves. This means they may deliberately over value them to get more money from the Federal government. The government has many laws, regulations and rules about contracting that are to make sure the funds are distributed ethically and legally. The stimulus bill may face these same rules. These may make it impossible to quickly get the money into the hands of those who need it. It may make more sense for the Federal government just to hire people rather then try to get civil companies to do that.