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Rural Utilities Create Zero Jobs With $47 Million in Stimulus Funding

Posted By Lachlan Markay On August 14, 2012 @ 4:07 pm In Ongoing Priorities,Scribe | Comments Disabled

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A stimulus program designed to create jobs by funding rural utility projects has created only about 12% of the jobs projected at the outset of the program in a sample of towns recently examined by the Agriculture Department’s Inspector General.

The IG examined [2] 22 local utilities and government agencies to receive stimulus money. The Rural Utilities Service (RUS), a division of the USDA, projected that the sample of companies would create 3,384 jobs. To date, however, those companies have used their stimulus awards to create a mere 415 jobs.

Some of the recipients have not used their stimulus awards to create a single job. The Wholesale Water Commission of Atchison County, Missouri, for instance, received a $22 million stimulus award, but has yet to even begin construction on the project for which the money was earmarked. Result: no jobs created.

The cities of Elkins, WV; Thomasville, AL; Ruidoso Downs, NM; Big Bend, WV; and City of War, WV, likewise have not created a single job between them, despite having been obligated, with Atchison County, a combined $47 million in stimulus funding through the RUS.

A host of other cities have posted disappointing job performances, as seen in this spreadsheet:

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While proponents of the stimulus would likely point to even this tepid job creation as a success, the effectiveness [4] of economic stimulus is generally gauged against alternatives. In this case, the issue is not whether jobs have been created at all, but rather how many jobs these funds could have created if they had not been drained from the private sector [5] or piled on top of the federal government’s record-high national debt.

“Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy,” explained Heritage’s Brian Riedl in a 2010 Backrounder. “No new spending power is created. It is merely redistributed from one group of people to another.” That redistribution likely creates few jobs, and may even be a net drag on employment.

But while this RUS program, like a number of the stimulus’s attempts at job creation, has performed remarkably poorly, a primary purpose of the President Obama’s first legislative initiative was not immediate job creation, as Scribe has noted [6], but in fact geared towards long-term left wing objectives.


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URL to article: http://blog.heritage.org/2012/08/14/rural-utilities-create-zero-jobs-despite-47-million-in-stimulus-funding/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/stimulus-sign.jpg

[2] examined: http://www.usda.gov/oig/webdocs/09703-0001-AT.pdf

[3] Image: http://blog.heritage.org/wp-content/uploads/usda-jobs-chart.jpg

[4] effectiveness: http://www.heritage.org/research/testimony/2011/02/why-the-demand-side-stimulus-failed

[5] private sector: http://www.heritage.org/research/reports/2008/10/how-to-successfully-stimulate-the-economy

[6] Scribe has noted: http://blog.heritage.org/2012/08/02/book-obama-had-ulterior-motive-for-economic-stimulus/

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