Commentary: The truth about stimulus jobs

There's plenty to criticize about the unfocused, back-end-loaded, goodie-for-every-special-interest federal stimulus bill, and the Obama administration has multiplied the targets with its overly aggressive reporting of its success.

It's clear that the early job creation numbers are exaggerated, although at least some of that is due to efforts to get numbers out quickly rather than taking the time to make sure they were accurate. (Counting jobs in phantom congressional districts and then reporting those bogus district numbers surely couldn't have been a deliberate attempt to mislead the public, but such sloppiness does raise questions about all the figures.)

But while stimulus supporters over-hype the program's success, detractors understate it. Case in point: S.C. Comptroller General Richard Eckstrom, who in a recent interview with McClatchy Newspapers, we are told, "mocked" claims by the state Education Department that federal stimulus funds had helped save or create 1,368 public school jobs in our state, including about 760 teachers.

"We're not going to fire teachers," the comptroller said. "We never have, at least not in my lifetime. There's a lot of demagoguery there."

Let's skip the pot and kettle analogy over charges of demagoguery and jump right into the facts, the first of which is that the state has fired school teachers in Mr. Eckstrom's lifetime. In fact, some teachers were told this spring not to bother showing up for work when classes resumed in August because their jobs no longer would exist. Today we have about 1,000 fewer teachers than we had in the spring, although Education Department officials don't know how many posts were vacated through attrition and how many teachers were laid off. About that same number of teacher jobs was eliminated in 2004 after a series of mid-year budget cuts, some through attrition but some through layoffs.

Perhaps Mr. Eckstrom meant to say that principals haven't been walking into the classroom telling teachers not to return to work the next week, but if so he was mixing apples and oranges, because the job-saving numbers the Education Department reported were of the don't-come-back-next-year variety.

More significantly, this criticism revives the big lie that Gov. Mark Sanford peddled throughout the spring in his ultimately unsuccessful attempt to divert to other states those federal stimulus funds that S.C. taxpayers would pay back whether we received them or not. That lie is that "government money" somehow doesn't buy anything.

That's not the way the governor or Mr. Eckstrom said it, but it's what their words mean, and it's ludicrous.

It is incontrovertible that there are smart ways and stupid ways to spend money - in the public or private sector. Reasonable people can disagree about which is which. I would argue, for instance, that spending money on local parades and festivals - one of the Legislature's favorite habits - is a stupid use of tax dollars. I would argue that spending money to provide 24-7 care - in prison - for nonviolent drug addicts is a stupid way to spend money; most elected officials and many members of the public would disagree. Fair enough.

But reasonable people cannot argue with the fact that a state will put more people on its payroll if it has an extra $350 million a year than if it does not have that money. And the fact is that this year's state budget would have been $350 million smaller if the Supreme Court had not told Mr. Sanford he had to request that money from the federal government; $185 million of that money would have been missing from the schools. (The schools got an additional $197 million in stimulus funds that were not at issue in the governor's dispute.)

I believe the state Education Department when it says that federal funds created or (more likely) saved 1,368 school jobs, probably about 760 of them teachers. But if you don't believe it, let's just think this through:

When the government gets money, its options are to hire (or not fire) people, give pay raises or perks, purchase goods or services, or let the money sit in the bank. I think we can all agree that government is far, far less likely to do the latter than are individuals or businesses, particularly right now. Hiring or not firing people obviously creates or saves jobs. But so does giving them raises, to the extent that they spend the extra pay in the local economy. An even more certain way to create or save jobs, according to free-marketers, is by buying goods or services.

Perhaps the Legislature somehow would have found a way to channel $382 million to the schools if there had not been a federal stimulus package, as I think Mr. Eckstrom means to imply. But just as federal stimulus funds don't disappear into thin air, that $382 million to prop up the schools would not have materialized out of thin air. It would have come from other agencies, which in turn would have had that much less money available to continue paying their employees.

It is worthwhile to debate whether stimulus funds are being spent in the smartest way possible, although I think you'd have a hard time finding many people who would say they are. It would be worthwhile to debate whether we would have gotten more bang for the buck with tax breaks than with government spending - or if there had been no stimulus package.

What we don't need to do is waste our time arguing over whether the money is creating or saving any jobs. Of course it is. Let's just hope that Mr. Eckstrom is the only one who's still trying to push the old Sanford argument that there's no detrimental effect on South Carolina's economy when money does not come into our state - and no beneficial effect when it does.