Obama Infrastructure Stimulus: Union Payoff Filled with Rail Boondoggles and Pork

by Hans Bader on September 7, 2011

in Economy, Labor, Mobility, Regulation, Stimulus to Nowhere

Obama’s proposed infrastructure stimulus is a payoff to Big Labor, as economist Ronald Utt explains. It “represents tens of billions of dollars in high, federally mandated, Davis–Bacon wages for unionized construction workers.” Costly, wasteful rail boondoggles will consume much of the money: “more rail infrastructure spending will be a key component of Obama’s new spending proposal.”

We explained earlier why Obama’s proposal is ironic, belated, and unaffordable, and will do little if anything to stimulate the economy. Earlier, Marc Scribner pointed out that the Obama administration’s “high-speed” rail projects aren’t high-speed, and are monumentally wasteful and costly, in addition to the fact that they would duplicate existing modes of transportation, would leave local governments on the hook for huge operating costs, and would be used by only a tiny percentage of the population.

Obama’s promises about government job creation are suspect. The Obama administration said that if the $800 billion stimulus package passed, unemployment would not go above 8 percent, but it actually rose to 10.3 percent. As we noted earlier, the “green jobs” Obama promised in the stimulus package never came into being, as even The New York Times has conceded. Instead, the green-jobs spending ended up inadvertently outsourcing American jobs to China.  A small fraction of the stimulus package was earmarked for transportation, but that money was slow to be used, since the supposedly “shovel-ready” transportation projects promised by Obama turned out to be anything but, thanks to federal red tape the administration did nothing to relax. Obama relied on exaggerated claims to push through the stimulus package, claiming it was needed to prevent the economy from suffering from “irreversible decline,” even though the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” Ill-conceived provisions in the stimulus package ended up destroying thousands of jobs by wiping out exports.

Obama’s new spending proposals are yet another breach of  his 2008 pledge of a “net spending cut,” which he broke immediately after taking office, by proposing budgets that would add $4.8 trillion to the national debt despite levying $1.9 trillion in new taxes.

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