Suffering States Not Feeling Stimulated

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USA Today has a fantastic little interactive map of the U.S. attached to an article about how money from stimulus contracts has been divvied up across states. I wish I could reproduce it here, but I can't. So I strongly suggest you check it out and scroll over some states to see how they've fared. The article itself is critical about this distribution of stimulus money, complaining that states hit hardest by the recession have not been blessed most abundantly by federal dollars.

In Michigan, for example -- where years of economic tumult and a collapsing domestic auto industry have produced the nation's worst unemployment rate -- federal agencies have spent about $2 million on stimulus contracts, or 21 cents per person. In Oregon, where unemployment is almost as high, they have spent $2.12 per capita, far less than the nationwide average of nearly $13.

Of course, in the case of Michigan, examining stimulus alone fails to take into consideration the auto bailouts, which if included would raise the government assistance per capita substantially. It also ignores the mortgage bailout, which almost certainly disproportionately helped states hurt by the housing bubble. Neither of these explanations, however, necessarily absolves Washington for failing to target the states that need stimulus spending the most.

Numerous other potential excuses could also be made. One might be that existing industry prevents certain spending, like clean energy or broadband infrastructure projects, from being aimed at specific suffering states, but long-term benefits might make that spending worthwhile. Another might be timing: due to their nature, many of the stimulus projects cannot get off the ground immediately, so that cash might not be spent a mere 100 days in. Similarly, Washington might argue that the benefits of such projects outweigh the delay.

Of course, both of these reasons also fail to address the criticism that congress should have targeted the worst state economies and provided more immediate relief. That is, after all, the purpose of a stimulus package -- to help people in economic distress as quickly and effectively as possible. Funding for projects that Washington believes will have long-term benefits to the nation? That's just regular old spending.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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