Trump's 'Infrastructure' Plan Versus Obama's 'Stimulus': Part II

Townhall.com ^ | May 16, 2019 | Larry Elder

[Kaslin]

My previous column objected to President Donald Trump and Sen. Chuck Schumer's, D-N.Y., proposed $2 trillion "infrastructure" spending. As with President Barack Obama's "stimulus," the Trump-Schumer plan violates the concept of federalism and bails out states that spend irresponsibly, guaranteeing a future of continued irresponsible behavior by state and local governments.

But several of my column's readers insisted that Trump -- a builder and shrewd negotiator -- plans to spend more efficiently and effectively than Obama did under his $787 billion so-called stimulus plan. Respected lawyer and columnist John Hinderaker, for example, wrote: "I disagree: Obama's faux stimulus consisted largely of support for state governments so they could keep union employees on the payroll. Very little of the 'stimulus' involved construction projects. Trump, at least, is actually talking about building, repairing and maintaining infrastructure."

The at-least-Trump-will-spend-it-better argument ignores federalism -- the federal principle of government holding that states are responsible for state projects -- and increases the incentive for states to engage in financial irresponsibility, knowing they can depend on the federal government.

Also, unlike Obama's stimulus, Trump proposes public-private projects. California's mostly mothballed "bullet train" project, having spent $5.4 billion since 2008, serves as a recent example of a lot of "public" but no "private." After delays, cost overruns and the lack of the anticipated private money, the state's new Democratic governor is now sharply curtailing its goals.

Article I, Section 8 of the U.S. Constitution outlines the federal government's limited and specific duties, powers and obligations. Not found is the power, responsibility or expectation to build, renovate, expand or manage state and local projects. At one time, Presidents actually adhered to this constitutional principle of federal restraint.

President James Monroe, our 5th President, cast his only veto when Congress passed a bill authorizing money to expand the Cumberland Road. Even though the expansion stood to benefit Virginia, Monroe's home state, he said the project violated the principle of federalism, under which the federal government lacks the authority to spend money on state projects.

According to Monroe's biography on the University of Virginia's americanpresident.org: "Although Monroe personally supported the idea of internal improvements, he balked at the federal government's role in the American System being proposed by Congressmen Henry Clay and John C. Calhoun. They wanted a series of federally financed projects designed to improve and update the nation's roads, bridges and canals. Monroe worried, however, that federal payments for such internal improvements would expand even further the power of the federal government at the sake of state power. Where would the limits be drawn?"

Columnist and economist Walter Williams notes that several other presidents agreed:

President James Madison, our 4th President, who is regarded as the father of the Constitution, blasted Congress in 1792 for appropriating money for French refugees. Madison wrote, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

President Franklin Pierce, our 14th President, vetoed a bill in 1854 that aided the mentally ill, arguing, "I cannot find any authority in the Constitution for public charity." He added that to approve such spending "would be contrary to the letter and the spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded."

President Grover Cleveland was our 22nd and 24th President. In 1887, he vetoed an appropriation to help counties in Texas that were suffering from drought. Cleveland said: "I feel obliged to withhold my approval of the plan to indulge in benevolent and charitable sentiment through the appropriation of public funds. ... I find no warrant for such an appropriation in the Constitution."

In a recent trip to St. Louis, my Uber driver glowered at the city's professional football stadium, financed by state and local taxpayers. The stadium had attracted the NFL's Los Angeles Rams. But the Rams left St. Louis once their 20-year commitment ended and returned to Los Angeles. My driver claimed that the Rams, after moving to St. Louis, never completely relocated their LA corporate headquarters there. "So, that," said the driver, "was the team's plan all along. Come here, grab the money and get back to LA." Who knows?

The point is this: Federal stimulus/infrastructure projects encourage poorly thought-through or vanity projects such as the stadium in St. Louis. What else could have and should have been done with that money? These are valid questions whether one calls it "infrastructure spending" or "stimulus."

[HighSierra5]

I’m all for infrastructure if it includes Biden’s 40 story high wall.

[wastoute]

I wish there was a way to “radio label” money like biochemicals. I bet it would be very revealing where 0bama’s “stimulus money” ended up.

[yldstrk]

obama’s stimulus was a scheme to pay off his political supporters

[mewzilla]

Money is fungible.

This is NOT an infrastructure plan.

It’s a short-term bailout to states being crippled by soaring public pensions and Medicaid costs.

But no one has the ‘nads to call it what it is.

[Zhang Fei]

It’s got Schumer’s fingerprints on it. You know by default it’s a monstrous waste of money.

[Wizdum]

Elder seems to forget that Eisenhower instituted the National Highway system as vital to national security. While the states may 'own' the roads they are supposed to maintain, it is the Feds that provide most of the funding.
Trump, as a shrewd businessman will use local companies to do the construction, but oversight of expenditures will be heavily controlled by someone Trump will trust to get the job done right and under budget.

This won't just be a 'fix and repair' of roads and bridges, but a modernization that will leave Trump's mark on the country for a few generations.

[rlmorel]

I agree that on one level, we should be pushing this to the State and Local Level. I have long thought that the Federal Highway Fund system removes power from the states where it should be due to the coercive nature of the distribution: "Your state doesn't want the 55 MPH speed limit? No funds for you. You don't want common core in the schools? No funds for you."

That said, I cannot in a million years imagine President Trump's proposal can have anywhere near the corruptness and wastefulness that the "stimulus" bill had.

I have posted it before, and it is long, but it explains in detail how the money, instead of going to fix roads and such, was being spent on a state park visitor center and teacher's health care. The post below was from around 2012 I think.

---

I can't tell you how angry I was when I recently tried to find out how many dollars from the "American Recovery and Reinvestment Act" were used to build a state of the art visitor center on the grounds of a national park near me.

Sudbury, Massachusetts is near where I live, it is one of the wealthiest communities in the state, and is located some twenty miles due west of Boston. In Sudbury, there was an old, abandoned Army base that had been closed up for years, and sometime in the last ten years or so, it was opened to the public to be able to walk through. It was great.

Not many people knew about it or knew it was open, and one could walk on dilapidated old crumbling roads through the woods, punctuated by an occasional boarded up decaying building. Most interestingly, there are a series of huge concrete munitions bunkers with evidence of railroad (possibly small gage) that serviced the bunkers, and on a few of them, you could get inside to find old, empty metal desks, light fixtures in the overhead with old fashioned incandescent bulbs in them.

To anyone who has ever lived on military installations, it has that general air of decay you know you could sniff out in the remote accesses even on some large active bases. As someone who grew up as a military brat and spent many hours exploring such ignored areas, that type of thing has always had a kind of charm for me. Anyway, it was great, and always deserted. Just about two years ago, I began to see evidence of activity...backhoes, roads being paved and such. It was a real disappointment, and I stopped going there for a while. Then, last winter, my wife and I went for a wintertime snow walk there, and came across this facility:

Now, just seeing that sign makes my blood pressure go up, but as I looked over the facility, I got angrier and angrier.

There was apparently no expense spared to build this facility, everything built of the highest quality materials, I do believe there were solar electricity panels on the roof (not sure though) but it didn't look like they skimped on anything. As I looked through the windows of the closed facility, I think I even saw Herman Miller chairs in what looked like an office. Bottom line, I see this, and figure they probably spent at LEAST a million or two on this facility, probably more, and now have it staffed with a park ranger or two. All this money WE DON'T HAVE for one or two government employee FTE's. Don't get me wrong, I like parks and such. BUT YOU DON'T SPEND MONEY YOU HAVE TO BORROW TO BUILD THEM! If times are prosperous, just maybe you can do it, but when we have a debt burden of $500,000 per household in this country, it is INSANITY to spend money on this type of thing.

So I decided to try to find out just how much of the "stimulus" was spent on this boondoggle. There is a website in Massachusetts to monitor the distribution of the stimulus funds at Massachusetts Recovery Website (which is most likely a dead link now) as an an attempt to live up to the Obama administration's promise of "transparency".

On the site, you can dig around in a variety of ways to see data, one way to slice it is by project, another shows funds by zip code. Unfortunately, they make it so you cannot download all the funds for all Massachusetts zip codes, but at least you can download data for a given zip code for a given fiscal quarter. Now, I never did find out how much was spent on that facility. But what I did find out was interesting.

I downloaded the data for 01776 (oh, the IRONY at that zip code) in successive passes for each fiscal quarter and got them all into an Excel spreadsheet. Once there, I used a pivot table to slice the data in a variety of ways. The column on the left is a general category, and the categories from left to right are subcategories of that. I specified that I only wanted to see the top four, and specifically excluded the Police and Firefighter components, but since the total money awarded was $25.2 million and this table shows an expenditure of $23.13 million, that means all other expenditures for this community that I didn't show totaled just over two million dollars. So my table below shows the lion's share.

(I only showed money awarded, not money used, but gee whiz, is anyone concerned they would get awarded the money and not use it? I'm not...)

As I went through the data, I kept seeing an entry for Minuteman Nashoba Heath, and it was a large chunk twice a year. Doing a search on the Internet showed this website: Minuteman Nashoba Health Group (Again, probably a dead link). They describe themselves as such:

"The Minuteman Nashoba Health Group (MNHG) is a coalition of Massachusetts towns and school districts that have joined together to purchase health benefits for their employees, retirees, and their eligible dependents. Joint purchasing of health benefits gives the participating governmental employers purchasing clout to help keep costs under control. The MNHG has been operational since 1990 and has added several towns to its membership in the last several years." I don't know what the cost for healthcare is for teachers in that town, but it looks from a couple of things I have seen that teachers might contribute between 20-30% of their own money towards their premium. Bottom line, you folks down in Texas, all you Freepers in California, even you Sooners out in Oklahoma, your tax dollars are all paying for the health care of unionized Massachusetts teachers.

I am not choosing Sudbury, MA for analysis because of some perceived corruption. I don't believe it is any more or less corrupt than any other community in this country. It just happened to be the community I was looking at to find out about something else, and this fell out of it. I fully expect that if I were to do this analysis on my town (which I will do) or any other locality in this state or throughout the country, we might find similar activity. What is unspeakable in my opinion is the fact that we took hundreds of billions of dollars we didn't have, and opened the coffers for every community around the nation to dip their hands into. To me, this is the equivalent of a family that cannot meet their mortgage (or their second and third concurrent and outstanding Home Equity Loan) pay their car insurance or keep up with any of the other bills they have incurred, taking out a fourth home equity loan, withdrawing it in cash and distributing it throughout the family. "Hey everyone, I'm going to buy a new boat, Mom is going to get a sports car, you kids can take the rest of this and spend it on whatever you wish! Computers, video games, clothes, whatever you want! You don't have to tell me precisely what you are doing with it (and even if you do tell me, I'll just wink and approve!) and you won't have to pay any of it back! This is FREE MONEY, and we are going to have a great time with it!" We have heard people say the whole stimulus bill is a scam. From day one, I have believed it. We have heard many say that this stimulus was supposed to provide "shovel ready jobs" that would stimulate the economy, but from looking at the expenditures, it is clear that, in one of the single, wealthiest communities in Massachusetts, 25 million dollars of stimulus money was spent, and the vast majority of it appears to be spent not on "shovel ready jobs" (whatever the HELL that means) but instead for paying for unemployment benefits, benefits for teachers and other "unspecified" educational costs (that detail could not be teased out of the spreadsheet, since it is not broken down that way). Spending the money on unemployment benefits may or may not be the best use for that money, but I think there should have at least been a dialogue about the wisdom of using it. It might indeed be the best use of our taxpayer money, but nobody got to even discuss it. It was just used to pay for these things...AND THOSE USES WERE NOT WHAT THE "STIMULUS" WAS SOLD AS. Brain dead liberals think that pumping borrowed/printed money back into the hands of the unemployed so it can be used to pay bills actually STIMULATES an economy. (Ask Nancy Pelosi...SHE thinks it does, and has said so.) It doesn't, but people who believe in socialism think it does. And socialists are running the show now.

Many of us recognize that the stimulus was a bill of goods, being used primarily by many communities to cover shortfalls, and who could blame those communities for doing so. But the unimpeachable idiocy of declaring that this money was going to stimulate anything is apparent, and it is yet another instance of the dishonesty of the liberals (and so-called "conservatives") who not only supported this expenditure the first time around, but are now pushing for more money WE DON'T HAVE to be thrown down the rat-hole.

And I do mean "Rat-Hole".

And it is a UNION Rathole. Using MY money to pay for it.

[shotgun]

It was $1.2 trillion, not $787 billion. Of that on $80 billion went towards actual public infrastructure. The remainder was a gift of public funds for all sorts of nonsense. One in particular that I remember was some school district in Florida got enough funds to provide low income families with a laptop so they could better communicate with the schools to track their student’s success.

Also, that “one-time” $1.2 trillion is still in the budget. Thats how Obama ballooned the deficit by $10 trillion.

[olezip]

But several of my column's readers insisted that Trump -- a builder and shrewd negotiator -- plans to spend more efficiently and effectively than Obama did under his $787 billion so-called stimulus plan.

A good chunk of our infrastructure includes Interstate highways, bridges, airports, and waterways that have been deteriorating for decades. Federal government spending will further increase employment levels, produce tangible results and truly make American great again.

I would not even attempt to compare Obama's Stimulus package because it was nothing more than a slush fund to make his cronies rich, and give the union thugs more money and power. The Democrats have nothing to show for the criminal and wasteful stimulus extravagance.

[Redwood71]

The White House says its plan will create $1.5 trillion for repairing and upgrading America’s infrastructure. Only $200 billion of that, however, would come from direct federal spending. The rest is supposed to come from state and local governments, which are expected to match any federal allocation by at least a four-to-one ratio. States have gradually assumed more of the responsibility for funding infrastructure in recent years, and the White House says it wants to accelerate that trend.

“What we really want to do is provide opportunities for state and local governments to receive federal funding when they’re doing what’s politically hard, and increasing investment in infrastructure,” DJ Gribbin, Trump’s special assistant for infrastructure.

To paraphrase an oriental saying, “If you give a hungry man a fish, you feed him for a day, but if you teach him how to fish, you feed him for a lifetime.” This is what Trump’s infrastructure project does.

Obama’s stimulus program gave him the fish. The rational for the American Recovery and Reinvestment Act of 2009 was based on the Keynesian economic theory that, during recessions, the government should offset the decrease in private spending with an increase in public spending in order to save jobs and stop further economic deterioration. This does not stimulate, it’s mass welfare. And we all know what welfare has done to the recipients. Trump’s plan is the opposite. It assists independence, not traps people into dependence.

rwood

[Pollard]

I think Florida got money to build tunnels under roads for some sort of turtle to be able to cross safely too.

Not sure if there was some sort of plan to teach the turtles to use them or not.

[i_robot73]

Difference between?? There IS none. Both are wholly illegal, unconstitutional, State’s Rights grabbing, legalized graft & corruption (SOP for G-O-V-T across the spectrum).

Even down here in FL, they begin the re-paving projects as soon as the last few feet of the last run as complete...a never-ending “works program”, courtesy of piggy-banks known as TAXPAYERS (not even ‘gas’ taxes anymore)