Monday, August 08, 2011

Calling Foul

I just don't believe this is true.

Last month, I spoke to Christina Romer, Larry Summers and Jared Bernstein on this question. The three of them were arguably the administration’s most persistent and consistent advocates for more stimulus. But they all said the same thing: The bigger the stimulus became, the harder it got to spend.

“We had a hard time spending $800 billion quickly, and with that much stimulus, the issue of diminishing returns could be important,” said Romer. “I don’t believe we could have efficiently and effectively put that large a stimulus to good use with requisite accountability,” Bernstein said. “It would not have been possible to move vastly more money into quick trigger infrastructure projects,” Summers said.

If there was greater willingness to bypass state governments and greater willingness to be less paranoid about "accountability" the money could have easily been spent. Quick infrastructure could have been done by funneling money to local water authorities. Also, too, direct aid to local transit authorities for things like bus purchases. And as we now know, spending it quickly wasn't the only consideration.

Things may have been hard given the constraints they imposed on themselves, but those constraints were...self-imposed. I guarantee my local government and my local transit authority could have easily spent as much money as they shoveled to them. Sure it may not have all been spent wisely, but it would have been spent more wisely than not spending it at all.