Monday, July 20, 2009

The Cost of Stimulus

The Drudge Report is touting the high price of pork purchased as part of the ARRA of 2009 (aka porkfest; aka stimulus).

The Recovery.gov website has tons of projects listed, and prices are attached to many, but the descriptions are so cryptic so as to be useless. Trying to figure out what exactly is being paid for is up to individuals curious enough to figure out where the money is going.

Take, for example, the curious case of the two pound sliced ham. $2,531,600 for 'Ham, water added, cooked, frozen, sliced, 2lb.
$1,191,200 for 2 pound frozen ham sliced. $351,807 to replace and upgrade the dumbwaiter. Or, $1,444,100 for repairing door for Building 5112.

Let's take that last one, since I think it's instructive. Building 5112 is located at Dyess Air Force Base in Texas. Repairing a door sounds like it would cost far less than $1.4 million, but this isn't any ordinary door. I should know, since I'm in the process of replacing the front door on my home, and while it's a special order door, it's not costing anywhere near $1.4 million.

Since Recovery.gov doesn't have the details, it was left to someone else to figure out the door costs, and Liberty Pundit did the hard work. It turns out that they're hangar doors at the base where B-1 and C-130s are housed.

If that were all, this is a nonissue, but the problem is that the Defense Department documents that call for the hangar door work show only $246,000, while the Recovery.gov site shows costs being far higher - $1.4 million, which suggests added items are involved and there's no sign of such information on the recovery.gov website.

The problem is that the Defense Department cost for the door repair is $246,000, not $1.4 million. What is the reason for the discrepancy? That's not mentioned in the Recovery.gov information.

The biggest problem with figuring out where the money is going is incomplete explanations on costs. That is the single biggest failing, and without appropriate explanations, you get what we're seeing today, courtesy of Drudge.

Indeed, that's the problem throughout. It's a lack of necessary and critical information that tells you exactly how all this money is being spent. Cryptic descriptions make the information virtually useless and opens the possibility that widespread corruption, graft, and padding of contracts is occurring with money that the nation simply doesn't have and can't afford.

Why is the recovery.gov website set up without these basics? If a contract is to provide quantities of ham, why not state as much, instead of giving the impression that it is to provide two pounds of ham for $1 million or more. It's asinine, but it's the way this Administration rolls.

Don Surber notes the aforementioned pork figures, and wonders why the government feels the need to make so many food purchases as part of the stimulus package at all. It's a good question, since this doesn't exactly create or save new jobs.

UPDATE:
Indeed there are discrepancies even with the pork purchases as claimed. The USDA responded to the kerfuffle over the multimillion dollar cost for pork purchases, clarifying that it was the purchase of hundreds of thousands of pounds at $1.50 per pound. Jim Hoft points out that the price per pound as per the contract is nearly twice what you would find at his local supermarket. (HT: Carl in Jerusalem)

I'll point out that the cost at my local Shop Rite is closer to $7 a pound, which suggests that instead of stimulating the economy, it's going to severely shortchange the food provider. That's not exactly going to result in stimulating the economy either.

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