Analysis: Democratic districts getting much more stimulus money than Republican ones

That’s the word from Cato scholar Veronique de Rugy, although she can’t quantify how statistically significant the relationship is. There is a relationship, though. A big one:

First: The idea behind the $787 billion stimulus bill is that, if the government spends money where it is the most needed, it will create jobs and trigger economic growth. Hence, we should expect the government to invest more money in districts with higher unemployment rates.

Controlling for the percentage of the district employed in the construction industry, a proxy for the vulnerability to recession of a district, I find no statistical correlation for all relevant unemployment indicators and the allocation of funds. This suggests that unemployment is not the factor leading the awards. Also, I found no correlation between other economic indicators, such as income, and stimulus funding.

Second: On average, Democratic districts received one-and-a-half times as many awards as Republican ones. Democratic districts also received two-and-a-half times more stimulus dollars than Republican districts ($122,127,186,509 vs. $46,139,592,268). Republican districts also received smaller awards on average. (The average dollars awarded per Republican district is $260,675,663, while the average dollars awarded per Democratic district is $471,533,539.)

Not only that, but the number of jobs “created or saved” has actually declined in the last quarter, leaving the amount of money spent per job at a cool … $286,000. As for the accusation of political favoritism, I’ll defer to de Rugy since she’s the economist, but I actually never understood the stimulus to be targeted specifically at districts where unemployment was highest. My understanding was that, yeah, the money would be spread around the country, but that the intended effect was systemic: Money directed to district X would stimulate its economy, which would in theory increase demand for goods or services produced locally or in far-flung district Y, just as an injection in the arm can be aimed at curing a problem in some other part of your body via circulation. But even assuming she’s right, is it safe to draw an inference of favoritism? Here’s what USA Today reported in July 2009, shortly after our Keynesian experiment got up and running:

Counties that supported Obama last year have reaped twice as much money per person from the administration’s $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain, a USA TODAY analysis of government disclosure and accounting records shows. That money includes aid to repair military bases, improve public housing and help students pay for college…

Investigators who track the stimulus are skeptical that political considerations could be at work. The imbalance is so pronounced — and the aid so far from complete — that it would be almost inconceivable for it to be the result of political tinkering, says Adam Hughes, the director of federal fiscal policy for the non-profit OMB Watch. “Even if they wanted to, I don’t think the administration has enough people in place yet to actually do that,” he says…

The imbalance didn’t start with the stimulus. From 2005 through 2007, the counties that later voted for Obama collected about 50% more government aid than those that supported McCain, according to spending reports from the U.S. Census Bureau. USA TODAY’s review did not include Alaska, which does not report its election results by county.

The report concluded that the money was doled out “guided by formulas that have been in place for decades and leave little room for manipulation.” Sure would be nice to see a follow-up piece springboarding off of de Rugy’s work now that we have another nine months of data in the bank. I’m sure everything’s kosher: Surely a president who showed such fierce resistance to special interests during the ObamaCare process wouldn’t let political considerations affect his stimulus awards.

By the way, the number who say he deserves “a great deal” of blame for America’s economic problems is now up to 26 percent. The numbers for Bush? 42 percent. Gulp.

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Jazz Shaw 10:01 AM on June 04, 2023