Corporate & Securities Law

Seriously, Alpha = 0? Have You Read the Bill?

Not to harp on the same point over and over, but can anybody look at this list from the stimulus package with a straight face and claim that the absence of inefficient government spending (HT: Peter Klein)?

• $1 billion for Amtrak
• $2 billion for child-care subsidies
• $50 million for the National Endowment for the Arts
• $400 million for global-warming research
• $2.4 billion for carbon-capture demonstration projects
• $650 million for digital TV conversion coupons
• $8 billion for renewable energy funding
• $6 billion for mass transit
• $600 million for the federal government to buy new cars
• $7 billion for modernizing federal buildings and facilities (including $150 million for the Smithsonian)
• $252 billion is for income-transfer payments ($81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don?t pay income tax)
• $66 billion for education

No inefficiency there, huh? And of course, let the rent-seeking begin:

The magnitude of the spending bill, and its urgency, drew a swarm of lobbyists seeking money and tax breaks. The concrete and asphalt industries battled over how the government should spend billions proposed for road and bridge repairs, while dairy and beef cattle producers butted heads over talk that the government might buy up dairy cattle for slaughter to drive up depressed milk prices. Unions backed infrastructure spending. States sought budget bailouts.

How could anybody look at what is actually in the stimulus package and conclude that the “Alpha” is zero? Maybe Geoff is right. I’m probably just taking Brad DeLong too seriously. More from Arnold Kling.

Full post as published by Truth on the Market on January 28, 2009 (boomark / email).