Tuesday, February 03, 2009

Economic stimulus

Thinking Fool has an excellent post on the economic stimulus bill working its way through Congress right now. He compares some of the proposed spending to a story in which a teenager is begging her mom for money to get her car fixed, and when her mom agrees, the teenager then tacks on money for a new dress, a TV, etc.

While I certainly agree with him in principle, I think he overdoes it a little bit with the details. His version of the list the teenager gives to her mom is as follows:
  • Engine: $1,140
  • Brakes: $155
  • Tires: $280
  • New Dress: $70
  • Nintendo Wii: $250
  • Four Wine Glasses: $44
  • HDTV for my Room: $880
  • Ceramic Flat Hair Iron: $85
In this scenario, the teenager is attempting to con her mom into spending $2904 to "fix her car," when in reality only $1575 of that is necessary. The remaining $1329, or about 45%, is her "wish list."

I am not an expert on what's in the bill that's being debated right now, but CNN.com has a list of items apparently identified by Republican leaders as "wasteful." The trouble is that those items total "only" about $19.1 billion in a package with a total cost of nearly $900 billion. Even assuming the package was only $800 billion, the wasteful spending identified is only about 2.4% of the total.

Put another way, if the teenager's total bill was still $2904, the "wish list" items would cost less than $70.

To be perfectly clear, I still think the whole thing's a load of crap. I just think a little perspective is in order.