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Thursday, February 5, 2009

Will The Stimulus Change the Perception of Government Spending

In college, I learned that Saturday Night Live had a unique strategy in getting some of their most edgy material past the censors. What the folks at SNL would do is initially submit something so over the top, full of swearing, sexual content, and even nudity that it had no hope of passing. After their initial request got denied, SNL would submit the skit they wanted. Even though these skits were often quite risque because they were so mild compared to the original one they usually were approved. This is a common technique of negotiation. It's when you initially make an offer so obscene that your real offer begins to look reasonable.

That might be the way that the stimulus goes. It might be that once the really obscene spending is removed from this bill, the public will accept some of the less offensive spending and get on board with the bill. On the other hand, the the deterioration of support may in fact be the public's reaction to government spending altogether.

Most who have followed the trials and tribulations of this stimulus closely are familiar with some of the most obscene spending: to beekeepers, the National Mall, money for computers, etc. (Dan Henninger has the latest list I found) Certainly, I am concerned about all of these nonsensical projects. I, however, am just as concerned about some of the spending that isn't getting as much attention: $66 billion to the Department of Education, $70 Billion to fund Medicaid, and all sorts of billions to fund cash strapped states.

While media and pundits alike have had a field day pointing out some of the most obscene spending items that I alluded to, we have had little analysis of exactly what all of this extra funding for Education will go to. Meanwhile, cash strapped Governors have gotten on board their own bailout. Of course, they have. Who wouldn't get on board getting money from the Feds? Mark Sanford of South Carolina leads a very small contingent of Governors speaking out against money going to the states. His point is that free money from the Federal Government means that Governors need not make tough choices.

What has happened is this. Every single piece of spending that has been examined has been roundly rejected by the public. The only spending that the public likes is that which is vague like infrastructure. Of course, infrastructure spending has real specific projects. Those projects have yet to be put under any microscope because the press and punditry have focused their ire on the more obscene spending projects. What happens if anyone gets around to examing closely what the $66 billion going to the Department of Education is actually going to? We are likely to find the same sort of wasteful projects we have found so far, and that's because that's how government spends, in wasteful manners.

It's very possible that the stimulus plan will change the perception of the public on government spending entirely. The public has taken a look at specific spending in this stimulus and rejected all of it unanimously. I believe that once the public examines specific spending proposals that is the way they will react to most. This stimulus may be a hallmark moment in the way that the public views spending by the government. The public rejected the Republican's consistent overspending, but we may be at a crossroads. Now, the public may take a much more keen interest in each individual spending bill and the public may in fact start to reject government spending as it comes. Rather than punishing a political party for a record of overspending, the public may have hit a mark now and demand that government spending be stopped before it even becomes law.

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