Friday, October 15, 2010

Stimulate What?

Did you know that $203 Million of the Economic Stimulus money that was doled out last year was given to the IRS? Further, it was revealed this week in a report from the Treasury Inspector General that these funds are in danger of being misspent due to continued problems with contract oversight. What a surprise.

I know the older I get the more my memory is fading (especially when it comes to my anniversary or my family's birthdays), but it seems to me that the entire premise around the economic stimulus payments was to stimulate the economy by putting money to work on projects that would multiply the dollar impact and create private sector jobs. The term “Shovel ready projects” was what I could swear I heard used to rationalize the expansion in deficit spending that would result. The tradeoff was supposed to be new construction jobs and improvements to infrastructure. Did I misunderstand?

The Treasury Inspector General’s revelation that some of the funds might be misspent is an understatement. I would submit that ALL of the funds are being misspent since they are to be used to support the reprogramming of IRS’s computer systems, the updating of corresponding tax forms and publications, and taxpayer services. All of these projects are normal, annually recurring activities of that agency. The fact that we had to expand the deficit in one time legislation to pay for these is a good indication of the absence of fiscal acumen in Washington.

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