November 21, 2009

The political perils of stimulus spending

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The list of problems that President Obama inherited upon arrival office was massive - an economy near collapse, a struggling financial sector, wars in Afghanistan and Iraq, the H1N1 virus. And the response so far has been a lot of federal spending - well over a trillion dollars.

But is that spending primarily investment for the future or additional debt? Nearly all our Patchwork Nation communities see it as the latter, according to a poll from Zogby International filtered through Patchwork Nation's 12 community types - though there are big differences in how strongly the various communities hold that view.

And when you compare how our 12 community types feel about the spending with how some of that money is being spent, you get an odd result.

The places that most favor federal stimulus spending - the big city Industrial Metropolis counties - look to get the least out of highway stimulus funding, as we noted last week. Meanwhile, one of the community types most opposed to the Obama administration's spending - rural Tractor Country counties - look to get the most of the highway money per capita.

That may be significant for coming elections.

The country/city divide

The difference in attitudes between the communities is not a surprise.

Tractor Country voted heavily for Republican presidential candidate Sen. John McCain last fall, giving him 64 percent of the vote. Their attitudes toward debt are different from other community types. Only 25 percent of the bank branches located in Tractor Country took any money from the federal Troubled Asset Relief Program (TARP) - the least of any Patchwork community type.

Contrast that with the Industrial Metropolis communities. In those counties, Mr. Obama captured 68 percent of the vote in the 2008 election. There is more comfort with debt overall - or at least more experience with it - in these places. More than half the bank branches in Industrial Metropolis counties took money from the TARP program - the highest percentage among all the community types.

That's what makes the proportion of federal highway stimulus dollars going to those places somewhat odd. As we noted last week, the Industrial Metros with high unemployment, are on tap to ultimately receive about $4 per capita out of that pool of money. Meanwhile, Tractor Country counties, which have low unemployment, are set to receive more than $1,100 a head.

Highway funds were projected to generate about half of the jobs out of the stimulus.

Not everyone in Tractor Country is thrilled with the expenditure. Thomas County, Neb., received about $12,000 per capita thanks to one big project, but the majority of people there feel the project is a waste, ProPublica reported earlier this year.

Political danger ahead?

All those numbers could potentially have a big impact on the nation's political climate at a moment when allegiances seem somewhat fluid.

Whether you believe the Obama administration's spending was right or wrong, there is little doubt that the size of the debt will be a major issue for the White House and the Democratic Party going forward.

If the economy begins to grow quickly again relatively soon, the debt may be largely forgiven by voters.

But there are signs of political peril, especially with regard to how the stimulus has been handled.

Poll numbers show that even in communities where Obama did well in 2008 - such at the wealthy Monied 'Burb counties, where he grabbed 55 percent of the vote - there are serious concerns about debt. Those concerns will only grow if the economy stays down.

If things don't improve, people in the 12 Patchwork community types may begin to look at the stimulus with great skepticism. Places that got money may raise questions about whether they got too much. And places that wanted the money may wonder whether they got enough.

(10/26/2009)
     - By Dante Chinni, Christian Science Monitor -- Patchwork Nation blog


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