Gregory H. Friedman, Inspector General for the Department of Energy, testified before the House Oversight and Government Reform Committee this morning (Hat-tip: Adam Peshek at the Reason Foundation). Not only was the stimulus based upon bad Keynesian economics, but even if we accept the faulty economic assumptions behind calls for taking money out of the economy’s right pocket to put in its left, his testimony demonstrates that the government itself is too incompetent to put theory into practice. According to Friedman:
Based on our body of work, we found that the effort by the Department to use Recovery Act funds to stimulate the economy was more challenging than many had originally envisioned. The concept of “shovel ready” projects became a Recovery Act symbol of expeditiously stimulating the economy and creating jobs. In reality, few actual “shovel ready” projects existed…. As a result, despite a major effort in a high pressure environment, the Department struggled to obligate and expend Recovery Act funds on a timely basis. As noted, the expeditious creation of jobs was a prime goal of the program. The delay in expenditures was not helpful in this regard.
What’s more, the effort was hamstrung by the same sort of regulation and red-tape that is bogging down the economy:
One state had only spent 30 percent of its State Energy Program funds two years after they had become available. We found that this was due to the time needed to comply with regulatory requirements of the National Environmental Policy Act, the Davis-Bacon Act and the National Historic Preservation Act-issues that affected other jurisdictions as well.
It took two years for a state to spend 30 percent of the funds, yet today the President is flying all over the country to stamp his feet while declaring that “we can’t wait” for another round of government spending masquerading as stimulus.
