In Defense of Pork

TW: Republicans draped the term "pork" all over the stimulus package. Pork is rife with negative connotations of ill-spent monies shepherded by feckless bureaucrats pursuing their pet interests. Some provisions in the stimulus are or were of dubious value but to let the Republicans tar any or most spending as porcine is wrong and can lead ineffective policy. Especially when, as appears to have happened, certain useful spending has been replaced by things like a housing credit.

Republicans will approve almost anything as long as the word tax cut or credit is attached. Yet many spending initiatives can be far more useful than tax initiatives. The bill sponsors claimed the housing credit will cost $18 billion, economists who have looked at it figure more like $35 billion. If someone needs to move, it may help subsidize their move but do little to help create new jobs (i.e. new demand, the thing that is the real problem). This is populist crack substituted for alleged pork, it is not progress.

From WaPo via Big Picture re spending:
"To Sen. Johanns of Nebraska [Republican] who branded it not a stimulus but spending plan that would not create jobs, Pearlstein says:

Johanns was too busy yesterday to explain this radical departure from standard theory and practice. Where does the senator think the $800 billion will go? Down a rabbit hole? Even if the entire sum were to be stolen by federal employees and spent entirely on fast cars, fancy homes, gambling junkets and fancy clothes, it would still be an $800 billion increase in the demand for goods and services — a pretty good working definition for economic stimulus. The only question is whether spending it on other things would create more long-term value, which it almost certainly would.

To Daniel Henninger, who objects to money being spent on government agencies, Pearlstein says:

Actually, what’s striking is that supposedly intelligent people are horrified at the thought that, during a deep recession, government might try to help the economy by buying up-to-date equipment for the people who protect us from epidemics and infectious diseases, by hiring people to repair environmental damage on federal lands and by contracting with private companies to make federal buildings more energy-efficient.

What really irks so many Republicans, of course, is that all the stimulus money isn’t being used to cut individual and business taxes, their cure-all for economic ailments, even though all the credible evidence is that tax cuts are only about half as stimulative as direct government spending."

From Calculated Risk re the house credit:
"...This is more of an incentive to get people to move as opposed to putting people back to work...The key problem for housing is prices are too high [TW- the remaining overhang from the bubble]. How does this tax credit help reduce prices? Why are we trying to artificially increase the turnover rate? And why are we targeting a tax credit at higher income individuals?This tax credit seems ill-conceived, and probably should be removed from the stimulus package. No one has adequately explained how this helps "fix housing first".
http://www.calculatedriskblog.com/2009/02/homebuyer-tax-credit.html