The Free Press, Mankato, MN

May 1, 2013

In Response: The stimulus did work

Tom Maertens Mankato

— Bob Jentges (April 19 My View) apparently read something about the stimulus that he thinks proves that the government is not efficient.

He gives no sources for his claims but they resemble the “pretend information” of the conservative media bubble. He has concluded that the Recovery Act failed, that most of the “promised” jobs never materialized and that it was the stimulus rather than the Bush depression that put more people on food stamps. He actually wrote that “Enrollment in the food stamp program has increased by about 70 percent since the stimulus.”

First, with respect to promised jobs, economic projections about the results of future policies are not “promises.” No macroeconomist can predict the future.

Second, there are several studies available on the stimulus that are more authoritative than Jentges’s fact-free theories. The Bureau of Labor Statistics reports that 6.5 million private sector jobs have been created since it took effect.

That hasn’t made up for the eight million jobs destroyed in the Bush recession, the reason both parties sought to pass a stimulus in 2009. The (failed) Republican stimulus proposal was for $713 billion, compared to Obama’s “soul-destroying, socialist tyranny” of $787 billion, of which $300 billion were tax cuts.

Jentges claims the Energy Department “doled out” $35 billion to green energy companies, many of which subsequently filed for bankruptcy or are in financial difficulty.

In reality, about $29 billion went to various DOE projects, including nuclear clean-up, Superfund sites and energy efficiency projects.

Some aid went to renewable and energy efficient technology, mostly in the form of loan guarantees. A few of the private companies that received loans went under, but those were business failures.

The most prominent was Solyndra, which defaulted on its $535 million loan. Most analysts attribute that failure to Chinese “dumping” of solar panels (selling below cost to eliminate competitors).

In trying to kick start new technologies, some misfires are inevitable, even by “savvy” venture capitalists. Overall, fewer than 2 percent of companies funded by the Recovery Act failed. As for Solyndra, it was hardly a “flier:” It was first approved for loans by the Bush administration.

Jentges mentioned fraud and abuse in government programs as examples of something or other. The first thing to note is that by world standards, government at the federal level in America is remarkably corruption free, as are most state and local jurisdictions. No government entity has ever committed the level of fraud carried out by businesses like Enron and the Wall Street bankers, who stole trillions and caused 4 million homes to be wrongfully foreclosed.

Although government in the United States is mostly honest, the reverse — attempted fraud against the government — is widespread. Because of better controls, however, fraud attempts are less successful and entail more risk, as the Recovery Act shows.

Abuse is a different story. Everyone knows that money and power corrupt, and financial interests have thoroughly corrupted legislatures with their “campaign contributions.”

Fraud and abuse need to be eliminated and violators punished, but that is something only the government can do – provided it is not corrupted from inside, as it was by Dick Cheney’s neocon cabal.

Finally, despite government shortcomings, who is more likely to protect your interests? Wall Street scam artists, the environment-destroying Koch brothers, or the government?