Stimulus money not spent on jobs

July 20, 2009 3:39:05 PM PDT
North Carolina's largest stimulus project is not a program for highways. It's not a blueprint for bridges. It does not include any concrete, asphalt, bricks or mortar. The biggest stimulus expense so far in North Carolina is Medicaid - healthcare for the poor. "Are we creating jobs, or are we creating more benefits?" asked North Carolina State Republican Party Chairman Tom Fetzer. "It's not what we were sold on the stimulus money going for, which was to create jobs, principally in the private sector."

Of $8 billion in federal stimulus dollars so far programmed for North Carolina, $2.4 billion - or 30 percent - are slated to go to Medicaid. If you also include other social service programs like child care and food stamps, the state is using more than a third of its stimulus money on something other than job creation, and average tax-payers may not see the physical results.

But some economists say that's okay.

"People should not be surprised there's a lot of money going to non-infrastructure projects," offered Professor Mike Walden with NC State. "In terms of the impact on the economy, if you put a dollar into food stamps, that's going to get turned over and spent rather rapidly and have an immediate impact on the economy, probably faster than an infrastructure project."

But conservatives complain social service spending is an expansion of government.

The state says is has not made it easier for people to qualify for these programs, but more people are using them.

"The roles on those programs have risen, even without a change in the eligibility requirements, because this is all driven by the economy," Walden explained.

But Republicans like Fetzer say the state should be giving people a hand up, not a hand out.

"They can say this is demand driven. And we are at a time when more than one out of ten North Carolinians is out of work. But we were sold on the stimulus that it would create jobs for the people out of work, not create benefits for the people out of work," he said.


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