Anna Wirth-Granlund 4.12.

12 Intermediate Economics Dileonardo Stimulus Article Analysis This article describes how Bucks County spent the $75 million it received in federal stimulus money. The money has created about 82 jobs per month over the past three years, however many of those jobs have been temporary. Part of the money was spent on stimulus projects which some argue did not create jobs at all. The county spent money on various transportation, infrastructure, energy/environment, housing, public safety and educational programs, but the majority was spent on transportation projects like runway or roadway improvement and traffic improvements. The money spent by Bucks County came from the 2009 American Recovery Act, which allotted $840 billion to go towards socioeconomic improvement goals like creating jobs and stimulating economic activity and growth. The money has gone to tax breaks, Medicare/Medicaid, unemployment and to the individual states. The state of Pennsylvania allotted $1 billion to PennDot, which, at its most prolific, had 2,517 workers employed on stimulus-funded projects. Overall, these numbers of jobs created or saved have been modest and are merely estimates. The article explained that organizations who tried to measure the impact of the stimulus found it difficult to measure how many jobs were saved or salvaged. The lack of concrete evidence appeared to be a serious problem to me, since such an enormous amount of money was distributed without clear follow up on how it was

used. As a condition for participation in the program, the organizations who received stimulus money could have been held responsible for tracking how the money improved their position. These institutions could project how budgets would have looked without the stimulus to really evaluate the effects and compare that to their position with the help of the stimulus moneya task which in itself creates work for someone. If we could properly measure areas where the funds were the most successful, then if in the future another kind of stimulus is ever considered, instead of distributing money across all industries, the money could be funneled to the most appropriate sources. Some industries will simply be more cost-effective at creating jobs than other by nature. It was irresponsible to give millions of dollars to organizations as part of a goal and then not follow up to assess how well the effort worked. While the Congressional Budget Office and Obamas Council of Economic Advisers have attempted to measure the effectiveness of the money on sustaining jobs, the estimates vary; had a procedure been in place before the money was distributed the estimates might have been more concrete. I was surprised to read that so much money had gone to pharmaceutical companies and medical research. While that arguably stimulated jobs and increased pay in that industry, I would assume it would be for people with at least undergraduate degrees. It seems more socially responsible to create jobs that are fair game for those who suffer from higher unemployment rates the most. I found statistics from the BLS in 2011 supporting that point. The unemployment rate for those who have had some college, but no degree to those with no high school diploma at all ranges from 8.7-14.1%, whereas those in the population with an

associates or bachelors degree face rates between 4.9 and 6.8%i. Lowering the unemployment rates in the areas where it is highest would have the greatest effect on average unemployment in addition to helping those in our society with the fewest resources to help themselves . Furthermore vaccines that were supported by stimulus money, like Gardasil, are topics of controversy and cannot be proven to be beneficial for a large cross-section of Americans, so it is arguably not in the public interest to spend stimulus money there. I can understand spending stimulus money on public works like roadway or education improvement even when it fails to produce concrete results about sustaining jobs, but if the money is spent on questionable investments it seems like ensuring effectiveness in creating jobs and improving the economy should be even more important. While it is not irrefutable, from reading this article and being generally aware of effects throughout the nation, the stimulus did not seem to be overwhelmingly effective in improving the USs economic position. Looking at BLS statistics again, the unemployment rate was 8.3 in 2009 when the American Recovery Act was passed.ii Since then the rate has fluctuated around numbers that were all above 8.3 for every month until March 2012. If such a massive distribution of money created jobs it would follow that unemployment rates should have declined to some degree following the Act. In the article, several institutions stated that their stimulus money sustained jobs until it ran out. It seems counterintuitive then that in 2012, when the majority of stimulus money has certainly been completely spent in the prior years since 2009, the unemployment rate has only begun to decline last month. Overall the benefits of the stimulus seem questionable. This article was

interesting to me in that it showed a closer look at what is going on in one county that may be applied across the nation. In Bucks County it appeared that stimulus money did not hurt the local economy, but vast improvements are not apparent either.
BLS. Employment Projections: Education pays. http://www.bls.gov/emp/ep_chart_001.htm BLS. Labor Force Statistics from the Current Population Survey. http://data.bls.gov/timeseries/LNS14000000.
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