Federal spending fails to deliver

The Gazette Opinion Staff
Published: January 29 2014 | 3:10 pm - Updated: 29 March 2014 | 2:51 am in
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The Gazette’s editorial “Things to do” on Jan. 12 was interesting.

It mentioned that a study by the Economic Development Research Group Inc. of Boston found that $1 billion of capital spent (on public transportation infrastructure):

l Supports 24,000 jobs for a year (average of $42,000 per job).

l Adds $3 billion in business sales.

l Adds $1.5 billion to the economy’s gross domestic product.

l Generates $350 million in tax revenue.

Would this imply the federal government spent $800 billion of the stimulus package and then the stimulus created 19,200,000 jobs for a year? ($800 billion times 24,000 jobs/$1 billion). Our economy reported no such progress.

Does this imply that federal spending is not equivalent to private sector spending? Does this mean that well-intentioned programs have wasted trillions of taxpayer money and create few jobs and more likely destroyed private-sector jobs because of higher taxes and regulation on the private sector?

Gary C. Young

Cedar Rapids

 

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