Some sort of stimulus package is going to pass sooner or later.
Then keep an eye on state and local governments, because they could negate a good piece of potential positive impact by a little cost-shifting from now to the future.
Take, for example, infrastructure projects. If the feds pump an additional $100 million into repairing roads and bridges in Wisconsin and the governor or the Legislature take that as an opportunity to cut $100 million in state funding for road and bridge repair, what’s stimulated? If it is a dollar for dollar trade, we are exactly where we were before in terms of jobs and better roads and bridges.
The state may, of course, be able to use $100 million in saved state money elsewhere, but there is no guarantee that the new expenditures will create jobs and it is more likely the money would just be thrown into one of the gaping budget holes that already exist, producing exactly zero new jobs, but perhaps preserving some existing ones.
It also is possible that using federal money to supplant state funding would lower the state tax burden, at least a little bit. It also increases the future federal tax burden because that debt has to be repaid, and with interest! Our kids and grandkids could end up bowed by a tax burden for a stimulus package that never was allowed to stimulate.

Roads jobs — more important than most, state says
Thursday, February 12th, 2009The state is going to slash and burn jobs over the next two years, under legislation to be considered next week. State government would be cut by $125 million over the next two years, but highway workers would be exempted from threats to their jobs, as would those with public safety gigs, such as cops or firefighters.
Oh, yeah. The first $300 million in federal stimulus money would go to highway projects.
So still no way to connect jobs to workers without cars, but plenty of cops to roust and bust them if they become homeless.
Or are they all supposed to find jobs as road builders?
Tags: Freeways, legislature, state budget
Posted in Commentary, Federal government, Freeways, State Legislature | 2 Comments »