The economic stimulus bill that Congress is debating with the Obama administration could reach $850bn or more.
That is a lot of money to spend, and there is an understandable fear that much of it could be wasted. From New Orleans to Iraq, the Bush administration showed that without oversight, even well-financed federal programmes can flounder. A government history of the American-led reconstruction in Iraq is calling the effort a $100bn failure.
But we should not assume that failure is inherent in any large government programme. The New Deal’s Works Progress Administration (WPA), which spent over $11bn from 1935 to 1941, and the Truman administration’s Marshall Plan, which spent over $13bn between 1948 and 1952, might have easily been riddled by corruption. Yet, they never were because Congress built in checks and balances for these programmes, which in today’s dollars would amount to roughly $100bn each.
“Many of the large American companies that received billions of taxpayer bailout dollars by pleading that they didn’t have enough money to lend to customers were, at the same time, spending millions of dollars dispatching lobbyists to influence the federal government.
A Washington Times review of lobbying disclosure reports found that 18 of the top 20 recipients of federal bailout money spent a combined $12.2 million lobbying the White House, the Treasury Department, Congress and federal agencies during the last quarter of 2008.
For instance, the government bought $3.4 billion in American Express Co. stock on Jan. 9 as part of an aid package. In the last quarter of 2008, the company spent more than $1 million on federal lobbying. “
Truman’s claim to fame was rooting out waste in the US military.
A Marshall plan would be possible with proper oversight and plenty of auditors. We might have avoided some of the ridiculous costs we’ve had over the last eight years, when it was decided that government “oversight” of private contractors would “hinder” the free market. In which the taxpayers got royally screwed because no oversight was necessary. The market did quite well for those contractors who could charge the government whatever they liked.
And since the people running the government were campaigning on an anti (or small government) platform, who among them cared? Their friends were doing just fine.
Time to put some of that money back in the country, for families here.
I am not convinced that the WPA as a regulatory board eliminated corruption during the New Deal. It did reduce corruption in the government by centralizing control but there are studies and reports that indicate there was widespread party favoritism in the appointments of persons to government positions. The article suggests that creating the regulatory agency cut down on corruption but this to me is reactive – the regulators only investigated complaints that were made to it. The Congress committee looked at the information provided by the WPA and could find “little or no discrepancy”. Isn’t that how we got into the financial mess we are in now?