Stimulating Facts

There’s a lot of debate over whether the government’s pouring out of trillions of dollars is aiding an economic recovery or if we’d see a more robust upturn if business and consumers were leading the way.

The answer is the latter, of course – assuming business and consumers had money to spend. However, we can’t dismiss the impact of government spending, even though we know we’ll all be paying for the $787 stimulus package someday.

The Governor’s Executive Summary Report, which details the use of the American Recovery & Reinvestment Act funds coming into the state, was made public recently at www.recovery.arkansas.gov.

The state expects to receive about $3 billion over the 27-month life of the Recovery Act, the report said.

As of Sept. 30, the state government has been awarded $1.1 billion – with only $322.9 million of that actually received – $112.5 million has been spent, and 2,633 jobs have been created or saved, according to the report.

“This report illustrates the progress that Recovery funds have made in Arkansas so far,” Gov. Mike Beebe said. “It is our job to show the dividends this taxpayer investment is creating in our state, and we’re seeing jobs saved or created and infrastructure projects well under way.”

The state considers the funds one-time money and is using it on capital projects like roads and public schools rather than setting up permanent programs – a wise course.

To date, the state Highway & Transportation Department has received $226.9 million and has spent $46.6 million in completing 50 road projects covering 160.5 miles.

Although public education is supposed to get a major boost of some $580 million over the life of the act, the report shows that it has received less than $18 million so far.

We agree with Kathy Deck, the University of Arkansas economist, who told the Commerce Arkansas business expo last week that, “This is a muted recovery because it’s not being led by the private sector. It’s being led by the government, propping up the GDP with the stimulus package.”

Some argue that the country would be better off if the government did nothing. It’s too late for that argument. Now the important thing is for Arkansas to use wisely every bit of that stimulus money to be better prepared for prosperity in the future.