In September, two audits performed by the Los Angeles controller revealed that “€œL.A. spent enormous portions of the $594 million in stimulus funds it received on projects that created or saved just a handful of jobs.”€ The audits, in particular, assessed the $111 million used by the city’s Director of Public Works and Department of Transportation, calculating that the construction projects hatched a total of 54 jobs”€”about $2 million per job.

This sounds more like political back-scratching than job-generation. Because this is stimulus money, you can”€™t help but assume it was not allocated to improve public works and transportation, but to pump money into the Los Angeles economy”€”and to “€œcreate”€ jobs.

Another problem is the ARRA’s focus on producing public-sector jobs. Such jobs are less productive because government bureaucrats are the “€œproprietors”€ rather than CEOs and private-sector management.

According to the U.S. Bureau of Labor Statistics National Compensation Survey, “€œprivate-sector employees worked an average of 2,050 hours in 2008, 12 percent more than the 1,825 hours worked by the average public-sector employee.”€ Private-sector managers have higher expectations, giving employees a greater incentive to perform. They work harder, longer, and smarter.

The government’s monopoly over the public sector discourages competitive behavior. Worker productivity suffers. A lack of employee accountability spawns a lethargic workforce and feeds into a system that is less innovative and more susceptible to financial waste.

Private enterprises encourage competition. They must continually innovate and improve their goods and services to rival competitors, and all employees are held accountable for their roles in achieving this goal. Contrary to the private sector, government is a protected monopoly which shields public employees from incompetence and hinders corporate progress. Unfortunately, the public sector reaps the majority of stimulus benefits.

In the end, the ARRA is not an economic stimulus. It is a political stimulus designed to line bureaucrats”€™ pockets with votes and political contributions. It is a vacuum without a bag. And in the spirit of the 21st century, it is American taxpayers”€™ dollars at work.


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