South Carolina Gov. Mark Sanford getting the business from Geraldo Rivera last night on the topic of federal “stimulus” money — Sanford wisely says no thanks — coupled with all the comparisons to the New Deal and the Great Depression conspire to force me to burst some bubbles.
First, the Messiah is absolutely right. The Great Depression was several orders of magnitude worse than the present dislocation of resources.
But what about the proposed government response? The “pump-priming” and deficit spending? Take a look at one of the Carolinas’ most significant New Deal era projects — Memorial Stadium down on 7th Street.
The stadium got its start as a 1933 effort of the Federal Emergency Relief Administration, and was one of the first and biggest direct federal “relief” projects in the region. Construction was quickly started on the stadium, which would be the only venue of its kind in the city. But the city lacked the funds to complete the project. It wasn’t until the Works Progress Administration ramped up in 1935 that a possible final source of funding was identified.
By December 1935 the project was approved by the feds. By then, as Mecklenburg Historical Commission research notes, The Charlotte Observer was gushing, “Completion of the stadium will give Charlotte one of the finest bowls in North Carolina.”
It seems the total federal contribution to the cost of the stadium was a little over $120,000. The commission declares total city of Charlotte spending was under $5000. To put those numbers in perspective, $120,000 in 1935 would be around $2 million today, and $5000 would be about $75,000.
So. Does $2.1 million give or take sound like the amount local government is looking to spend in 2008 on “stimulus” projects? You wish. CATS alone came up with its wish list of $110m. Another way of looking at that number is to consider it would be roughly a $7m. request for funding in 1934.
What were the feds spending $7m. on in 1934? Well, the entire budget of the Administration for Industrial Recovery was $6.6m. and the operating budget of the U.S House was only $7.2m. The Federal Reserve Board, the Federal Home Loan Bank Board, and National Banking Emergency Act were all together barely spending $1.5m.
The War Department line-item for the Panama Canal was all of $9.6m. while Navy Department pay for the frickin’ Marine Corps topped out at $12.6m. The entire Department of Labor budget was $12.3m. and the Patent Office got by on $3.9m. And all of the Federal Emergency Administration of Public Works spending for the entire country totaled $162m. for 1934.
To put that $162m. in perspective, it would be a mere $2.5 billion today — or less than the budget gap the State of North Carolina is now looking to close — or almost exactly the amount CATS intends to spend to build future train lines in Charlotte.
In short, any way you look at it, the urge to spend public money today is completely and utterly out-sized to public needs. No wonder the era of “free” money is coming to close.
But by all means, let’s go chase some more.
