Why Were Infrastructure Improvements Not Paid For By The Last Stimulus?

Flopping Aces ^ | 09-23-11 | Warren Beatty

[Starman417]

President Barack Obama wants to improve infrastructure. His $447 billion "jobs bill" has in it $50 billion for infrastructure repair/improvement, and $10 billion to start a National Infrastructure Bank. So the questions are, Why were infrastructure improvements not paid for by the last stimulus? What happened to the money for infrastructure in his $787 billion stimulus bill? To answer these questions, let's examine both stimulus bills, stimulus spending, and infrastructure spending.

Stimulus Spending

Obama's original $787 billion stimulus bill left America's economy in disarray. Having learned nothing from this failure, Obama recently unveiled another stimulus bill - the American Jobs Act, proposed to cost $447 billion. "Obama spent $787 billion of our money on his first stimulus, and the economy sickened," says Grover Norquist of Americans for Tax Reform. "Now he is back with another $400 billion in stimulus. Leeches! He gives us more leeches!"

On July 8, 2011, economist Veronique de Rugy, in her excellent article, offered three myths about stimulus spending. She says:

• Myth 1: Stimulus spending can jump start the economy and fix unemployment
• Myth 2: Additional infrastructure spending is an effective way to stimulate the economy and create jobs
• Myth 3: Tax rebates will stimulate the economy

Infrastructure Spending

President Obama, in his "American Jobs Act,"is asking for $50 billion additional infrastructure spending, such as grants and guaranteed loans, investments on highway and rail projects, high-speed rail projects, and Amtrak. But, as economists Veronique de Rugy and Matt Mitchell point out:

• In 9 out of 10 transportation infrastructure projects, costs are underestimated
• For rail projects, actual costs are on average 45% higher than estimated costs
• For fixed-link projects (tunnels and bridges), actual costs are on average 34% higher than estimated costs
• For road projects, actual costs are on average 20%higher than estimated costs
• For all project types, actual costs are on average 28% higher than estimated costs
• These same cost overruns exist in all public work projects

When Democrats passed the $787 billion stimulus bill in February 2009, they promised an historic investment in roads, bridges and rail. Obama's next stimulus won't do any better than his last one. Only 3% of his last stimulus went to infrastructure spending because such programs are not politically popular. Once the stimulus money is gone, the jobs are also gone. This "stimulus" calls for 11.2% spending on infrastructure. The original $787 billion "stimulus" called for 6.4% to be spent on infrastructure, but 3% (less than half) was actually spent on infrastructure (see above). And, according to a Washington Times article, infrastructure projects were supposed to be "shovel ready." But we all know how Barack Obama laughingly dismissed that requirement. Infrastructure spending will not provide much of a stimulus, and it will not provide the jobs promised by Obama.

The White House said that President Obama, in Ohio on September 22, 2011, would visit the Brent Spence Bridge, described as "functionally obsolete," in order to highlight the "urgent need" for infrastructure improvements. The 48-year-old bridge is a double-decker inter-state bridge. But there is absolutely nothing wrong with the bridge upon which infrastructure money could be spent. Federal and state officials have been moving ahead with a repair plan for the bridge. But despite the attention given by Obama, the timetable suggests it is not "shovel ready" and won't spur increased employment right away.

In an article in Investor's Business Daily, John Merline, on September 15, 2011, cited five myths about infrastructure spending.

[Sacajaweau]

Cuz you had to pay off the unions...

[Daveinyork]

I once heard about a joke that shows the difference between Asian corruption and African corruption.

The Asian get rich and invites his African friend to visit his mansion. He points to the road, then to his house and says “10%”

The African invites the Asian friend to his mansion, points to the mansion, then to a nonexistent road, and says “100%”

Asian corruption greases the wheels. The African version of corruption stops them.

Any questions?

[boop]

Um, where are the billions we ALREADY pay in taxes for roads and bridges going?

[PastorJimCM]

Everyone who gets a paycheck puts into SS. Isn’t that money in a ‘lock-box’? :-)
Everyone who buys gasoline/diesel pays for infrastructure. Isn’t that put into a ‘lock-box’? LOL
Yet these two items are consistently used by the left for the purpose of scare tactics. Why do conservatives remain silent regarding the lies and shiftiness of the liberals?

[GeronL]

It was a political slush fund

[trebb]

Yep - “infrastructure” was the excuse - padding union coffers was the real reason.

[decimon]

Regarding post #3: What percentage of the joke did the rest of you get?

[Lmo56]

‘Cuz they left the disbursement of funds up to the states and local communities that got them.

IIRC, one community used their funds to re-pave tennis courts ...

[Zman516]

Here where I live a brand-new pedestrian bridge was built to span a busy intersection. It came complete with elaborate handrails on both the staircases and long handicap ramps on each side. It is beautiful, a work of art, probably costing several million dollars.

What is irritating is there is an existing crosswalk near it by which one can easily cross the street. The new bridge has been “in operation” since early June, I drive under it twice daily, and so far I’ve counted a total of three people using it, and two of them were walking together.

[E. Pluribus Unum]

"Infrastructure" is code for "union payola."

[Safetgiver]

Why do conservatives remain silent regarding the lies and shiftiness of the liberals?.. I don’t know about conservatives, but Republican politicians are part and parcel of what we are seeing. Gas taxes were meant for road repair. Where did most of it go? Mass transit and the Unions.

[Straight Vermonter]

IIRC, one community used their funds to re-pave tennis courts ...

$2MM in stimulus money went to build a fence around our fairgrounds. Thanks taxpayers for the fancy fence!

[drypowder]

During the George H Bush administration there was a federal $0.05/gallon of gas tax imposed that was to be strictly for transportation infrastructure. Our Government is nothing more than a mob of crooks who have plundered this country to the brink of collapse. And it goes on and on and on and we sit and wait as we try to change our elected officials through lawful process. Man are we stupid. The common people are burdening the blunt of the poverty, not the elites.

[Eva]

As Obama told his audience at the Ohio speech, his infrastructure bill pays for permits, environmental studies, and all the preparation for infrastructure.

What it doesn’t do is pay for the actual work. It does pay the interest on the the financing, though. So we, the tax payers get to make the loans and pay the interest, as well.

If you want to read what is in Obama’s infrastructure and transportation bill, take a look at S. 942.

[Eva]

I have to say that the proposal to start a “bank” to pay for the actual work is new. I wonder if Obama is going to put the money in a lock box along with the SS money.

[dearolddad]

Um, where are the billions we ALREADY pay in taxes for roads and bridges going?

I agree with you on this point. Wonder why that question never gets ask of our politicians?

[Joe Boucher]

While congress sends dollars to each state for dot improvements,
They do not put directives on how to spend said funds.
That is what happened to that Minneapolis bridge that collapsed.
Minnesota redirected ALL of appropriated funds to social issues.

[dsrtsage]

“Regarding post #3: What percentage of the joke did the rest of you get?”

I got it, though the context could have been better explained. Basically the Asian house was built using 10% of the funds skimmed from the road construction project. The African house was built using 100% of the funds skimmed from the road construction project, thus no road. The idea is that while the asians may be corrupt and skimming at least the community got a benefit from its tax dollars, while no matter how much money is pumped into Africa, it goes straight to the dictators swiss bank accounts

[decimon]

Like Vegas - the house always wins.

Thanks.