Stimlus money continues to flow to St. Louis in 2010
By Adam Allington, St. Louis Public Radio
St. Louis, MO –
It's been over a year since Congress signed off on the $787-billion stimulus bill.
The president claims the measure saved about 2 million jobs last year, and that's with most of the money still not spent.
Many cities, including St. Louis, are just now breaking ground on stimulus funded projects.
The 2009 American Recovery and Reinvestment Act was sold to the public as a laundry list of "shovel ready" projects to fix our aging infrastructure and put Americans back to work.
Projects like this $35-million renovation of new office space for the Social Security Administration on Goodfellow Boulevard.
Alderman Jeffery Body says the project is one of the biggest investments his ward has seen in a long time.
"Any times you see contractors swinging hammers and tool guns you know jobs are being created and sustained," says Boyd. "From my understanding there are over 400 construction jobs that are being created for this job."
Some critics say that projects like this have been too slow in coming. But, St. Louis University Economist Jack Strauss says the most important thing the '09 stimulus did accomplish had little to do with infrastructure.
"The primary way that the stimulus has helped is that it has given states 10 of billions of dollars and this has prevented layoffs," notes Krauss, "particularly in education and that's hard to see."
With states facing historic budget deficits again this year Krauss says shoring up state budgets may have a more immediate impact on unemployment than creating new jobs from scratch.
"Its cheaper and it makes more sense to save a job than to create a job, because the facility, the school, the police department is already there so it's actually cheaper because the capital is already in place."
St. Louis plans to break ground on several stimulus-funded projects over the next month, including repairs the aging Tucker Boulevard viaduct and energy audits for City Hall.
City Economic Development Director Barb Geisman says the projects will create jobs, the question is will they last.
"We're all really keeping our fingers crossed that the economy recovers and the recession ends sooner rather than later," says Geisman. "While we're waiting for that to happen everybody including the city, the state, everybody is tightening their belts."
But many deficit hawks warn that artificially supporting the jobs market is not without risk. John Cochrane is a Professor of Finance at the University of Chicago. Speaking on PBS's Newshour Cochrane warned against further stimulus spending.
"If stimulus spending led to prosperity," says Cochrane, "borrowing trillions of dollars and then spending it on social programs or government employees, Greece would be the richest country in the world and not one that's about to default on its debt that's our danger."
Cochrane claims that best thing the government to support job creation would be to cut corporate taxes.
Still, others say simply cutting taxes at a time when the economy was shedding 700-million jobs per month was not realistic.
"We can't say, well, let's run the economy without the stimulus and then keep everything the same and run it again for 2 year with the stimulus,'" says Washington University Economist Steve Fazzari.
Fazzari believes the stimulus was justified, but unlike previous recessions, he says this recovery could take years.
"St. Louis in my experience here has been a fairly good barometer of the broader country and what we see in terms of aggregate numbers is jobs not declining dramatically, but certainly not growing and given the big hole that we had that's pretty bad news."
Even as waves of stimulus dollars arrive for construction projects, Missouri is trying to cut $700 million from its budget, a move which could result in thousands of layoffs.
In that respect, St. Louisans can at least take comfort that they don't live in Illinois, where the Governor is trying to eliminate some $13 billion in spending.