NY Post Editorial 1/28/09

The always snarky and starkly conservative New York Post editorial page presented a doozy today — in part because the piece on the stimulus package was correct about a few things. How out of character!

While the Post predictably rolls out the Republican talking points — the package is a “spendfest” with “no defined goals or objectives” that hands out money to undeserving “folks who may or may not pay any income taxes” — it makes a very good point about a critical Obama campaign promise and a missed opportunity.

Briefly to rebut the Post’s silliest claims, many economists across the political spectrum believe $825 billion might not be enough to get this economy out of it’s tailspin and there is wide acceptance in the world of economics that every dollar directly spent on the economy has a far greater impact than every dollar of broad-based tax cuts. Finally no one argues with the simple, proven FACT that poor people are far more likely to spend any extra money they get than those who are better off. So giving tax rebates or refunds or whatever they want to call it to lower income people will trickle up and stimulate the economy far more effectively and rapidly than broad-based tax cuts.

But then the Post takes an interesting turn on the single biggest part of the stimulus package — $300 billion going directly to states mainly in the form of extra Medicaid and school aid funds. As the Times front-paged today the education bit is a startling historic potential change in the way America pays for it’s schools. But the Post’s take is noteworthy too in pointing out how this money will dramatically change the discussion in New York.

The Post notes that the state, the city, and other cities in the state should collect about $20 billion from the package (a number for which they site no source and I have been unable to verify with anyone in DC who knows the inner workings of the bill) which if true would have a dramatic impact on politics in Albany at the very least and could make Mike Bloomberg’s job of getting reelected this year much easier. More on that in another post.

What the Post correctly notes is that despite Obama’s campaign promise to force the Federal government to reform the way it spends money (more transparency, more need-based decision-making, more business-oriented benchmarking), none of that is in this bill. And in the case of New York that’s a HUGE crime considering that our Medicaid spending in real dollars and per capita is enormously higher than any other state’s. Our school spending is likewise in the top 5 no matter who measures and what parameters they use. In both cases government watchdogs have repeatedly shown scores of ways expenses could be radically reduced.

Of course the changes the Post mentions are not cost-oriented but ideologically driven (i.e. “teacher accountability standards”) but give ‘em credit for at least getting something right!