Biden Says Stimulus Working But Will Include Waste

(MoneyWatch)  When you throw a $787 billion stimulus at trying to jump start the U.S. economy you might expect some hits and misses. Vice President Joe Biden who is charged by President Obama with monitoring the rate at which the money is flowed out to projects admitted today what everyone associated with this type of spending knows: Some of the money will be "wasted" or lost to scams.

Speaking to a business round table in New York Biden was trying to drum up support for the bill and the spending. Despite the fact the bill passed three months ago and tens of billion of dollars pushed out to the various Departments unemployment in the United States continues to grow. In April it was 8.9 percent up from just 7.1 percent in January. In November when Obama was elected it stood at 6.8 percent. The bankruptcy of Chrysler, GM and their various suppliers will only increase this rate in the short term. Currently it is really impossible to quantify how many jobs have been "created or saved" by the Stimulus when the economy continues to lose them overall. The U.S. government, though, continues to hire civil servants and contractors.

The wastefulness of defense spending has become a running joke for thirty years now (think $400 toilet seats and hammers) although in many ways it is not true. The government historically has not always bought things efficiently focusing on the ethics involved as well as things like helping out various parts of the economy that would not necessarily win best value awards. This is going to be true with the Stimulus funds as well. There are rules as to how contracts are awarded and who gets them and this applies to this spending as well. This leads to longer contract evaluation and award periods as well as considering companies that in a normal procurement may not be eligible.

So with the Stimulus you see a program that tries to force a large amount of money through a tight space required by Federal procurement regulations. This slows down the process of getting contracts and projects started and ultimately hiring people. There is already tacit acceptance that some of the money won't be spent efficiently or properly further hindering the effect of the funds and you also have a law that did not include funding to the states and localities trying to execute it for hiring people to administer or monitor it. This will lead to further delays, poor data collection and less positive results. Maybe in the next twelve to eighteen months the money will have its intended effect, but I am not so sure.

Photo from annia316 Flickr photostream.