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The 4.6% Truth: How Absurdly Small Stimulus Spending Really Is

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Created 02/09/2009 - 5:22pm

Conservatives have spent the better part of a generation complaining that spending on social programs is what's responsible for the massive deficits their outsized defense budgets and tax cuts have created. Mathematically, it's as absurd a line of thinking as ignoring government data and insisting that the New Deal exacerbated the Great Depression [1]. Indeed, non-security spending by the government is relatively tiny [2]. But that doesn't stop the right from claiming otherwise, because their argument serves their political goals: It lays our country's fiscal problems at the feet of the middle- and working-class that benefit from social programs but have a far smaller voice in the political process than the political donor class (which benefits from big defense contracts and regressive tax policy).

Now, as the debate over the economic stimulus has intensified, these same conservatives have simply updated their argument, insisting that our government is too focused on spending money on social programs. But a look at the numbers shows just how idiotic that claim really is.

Bloomberg News today reports [3] that if/when the stimulus bill passes, the federal government will, in sum, be on the hook for $9.7 trillion in total financial commitments to solve the economic crisis. Out of that, roughly $450 billion of that is the direct spending in the stimulus bill (58% of the $780 billion stimulus is spending - ie. $450 billion - while the other 42% is tax cuts). The rest is a mix of cash given to the banks (TARP money), FDIC guarantees for losses, and Federal Reserve Bank loans/swaps.

In other words, out of the $9.7 trillion our government is putting on the line to deal with the economic emergency, just 4.6% of it is actually being allocated to direct spending on social programs. The other 95.4% is going to either tax cuts (many of which tilt to the rich [4]) or directly to the financial industry.

Now, I'm not stupid - I know that we'll continue to hear Republican senators and right-wing talk radio lambaste individual programs as proof that what's running our nation into long-term debt is the stimulus's spending proposals. I know we'll hear this because the Right remains committed to an ugly kind of know-nothing cultural populism it has relied on since the 1980s: The kind that ignores basic arithmetic, and seeks to blast every political debate through the prism of the right-wing culture wars that first started dominating politics twenty years ago. So, for instance, while Republicans say almost nothing about $9.3 trillion being given to bankers at a time when the middle class is getting crushed by recession, they make a stink about relatively miniscule proposals to fund STD prevention programs and birth control [5].

While some Obama administration water carriers [6] are claiming with a straight face that the current stimulus is a landmark triumph for progressivism, the New York Times Paul Krugman [7] is far more honest and accurate, noting that the public at large should be utterly outraged that just 4.6% of the government's emergency spending money is being devoted to helping the public at large.

Of course, that doesn't mean the stimulus bill should be rejected, even in the overwhelmingly mediocre state it's in - but it does mean that we should have a little perspective and stop judging everything by conservatives' know-nothing parameters.

Yes, it's great that the government is going to spend something on public priorities - that's a step forward from the Bush era. But 4.6% is a relative pittance of progressivism in an ocean of continued kleptocracy. It's the absolute least that should be spent on health care, energy and jobs programs - and we should use this fleeting moment of legislative negotiation to demand far more.

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David Sirota is a full-time political journalist, best-selling author and nationally syndicated newspaper columnist living in Denver, Colorado. He blogs for Working Assets and the Denver Post's PoliticsWest website. He is a Senior Editor at In These Times magazine, which in 2006 received the Utne Independent Press Award for political coverage. His 2006 book, Hostile Takeover, was a New York Times bestseller, and is now out in paperback. He has been a guest on, among others, CNN, MSNBC, CNBC and NPR. His writing, which draws on his (more...)

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