Federal stimulus spending is stimulating business for contractors helping the government figure out how to spend the stimulus money, reports the Washington Post. Government agencies say they can’t properly oversee the $789 billion stimulus package without hiring outside help. As a result, the region around the nation’s capital is doing just fine. Reports the Post:
Of the stimulus grants and contracts awarded so far, the District has received nearly 10 times as much per capita as the national average, and Maryland has received more per capita than much harder-hit states, among them Florida, Michigan, Nevada and Ohio. Virginia’s statewide average is relatively low, but of the 496 stimulus contracts the state has received, two-thirds of them, with a total value of $562 million, have gone to Northern Virginia, home to hundreds of contractors.
Virginia’s unemployment rate is 6.6 percent, and Maryland’s is 7.3 percent, well below the 10.2 percent national average. And data released Wednesday puts the Washington metro area’s unemployment rate at 6.2 percent, an increase of two percentage points over last year, while the jobless rates in other metro regions has gone up much more – to 9.3 percent in New York, and above 10 percent in Chicago, Atlanta and Los Angeles.
The Post article identifies a number of the contractors getting multi-million dollar contracts from the feds, including Fig Leaf Software. Fig Leaf won a $1.1 million Interior Department contract to build a computer system for stimulus funding recipients to report back to the government. The contract enabled Fig Leaf to hire three more people at its office in the District. Dave Gallerizzo, a principal at Fig Leaf Software, told the Post: “I look around the country at all the places that are hurting and the one place that has jobs is here. And I don’t have a problem with it. If the money went to Michigan and employed three people there, what’s the difference?”
That, of course, is the “drop the money out of an airplane” theory of government spending, which, we would like to think, is not normally espoused by the people hired to help the government keep track of how it has spent its money.
(Cross-posted at InsiderOnline.)
Update: In the comments below, Mr. Gallerizzo says the Post quoted him selectively and he provides the full quote he says he gave to the Post. We quoted him directly from the Post article, and in so doing it seems we have incorrectly imputed to Mr. Gallerizzo the view that all government-created jobs are equal. The point we make—that bureaucracy plays the role of leaky bucket in government transfers of wealth—remains valid; but we agree that this is not Mr. Gallerizzo’s fault.