Criticism Of The Stimulus Continues While Obama Changes His Language

Last Updated Jul 15, 2009 6:44 AM EDT

Update -- Even Democrats in Congress are now criticizing the pace of stimulus spending and its effect on the unemployment rate. One major issue is that the states with the highest unemployment, like Michigan, are not receiving large amounts of funds to helpfully try and get more jobs. There is now discussion of possibly rewriting the legislation to make it more equitable and spend money quicker.

There are starting to be a great deal of complaints that the "Stimulus" Bill pass in March by Congress at the urging of the Obama Administration is not really working. Specifically that the U.S. unemployment rate has grown since the law was implemented faster and higher then predicted without the bill. The goal with this spending was to "create or save" jobs according to the President. Measured in that way it has not really done anything.

There have been issues related to how states are spending the money, how fast it can be forced through the Federal contracting system, and then what jobs are being created. The Obama line is now that rather then working immediately to create jobs the programs will start later this year. They underestimated how hard it would be to actually spend the money quickly.

Some people who are getting money quickly and possibly hiring are those who jobs it will be to manage and track the funding. In Colorado the Governor, Bill Ritter, gave a no-bid contract to his old employer to help the state track the money. Granted it was only for $40,000 but still it looks fishy as the state probably could have found another law firm capable of doing the work. Eyebrows were also raised this week when the Federal Government announced a contract for up to $9.5 million to a company just to redesign the website used to track the money. Although Recovery.gov has shown that it is easily outperformed by the private website Recovery.org.

Much of the first wave of stimulus funds delivered to the states were used to balance their budgets or pay for existing programs. This was not the intent of the money, although now Obama is arguing without that money unemployment would have been higher as the states would have laid off many more workers. So those are jobs "saved".

Like the TARP program passed in the Fall to help financial institutions a significant portion of the money must go to run the offices and programs that manage the funding. The way the government contracts and the amount of reporting required by Congress, executive agencies and the state this was going to be a given. At the same time the government is trying to get as much publicity out of this as possible which leads to the focus on making information about the spending public. It can be expected that over the next three years there will be more spent on lawyers, web sites and government employees to do this. So at least parts of the economy are being stimuluated.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.