Stimulus proves wasteful in LA

The city of Los Angeles has a website at, which reports how the funds available as part of the American Recovery and Reinvestment Act have been allocated. At first glance it looks positive. They report that ARRA funds have paid for a total of 5.76 million hours of work. According to their figures those hours equate to 2,772 full time jobs.

Los Angeles has a total allocation of $611 million in ARRA funds. They’ve spent $592 million so far. So it’s easy enough to see just how effectively that money has been spent by dividing the reported number of full time jobs created by the total amount spent.

592,000,000 dollars spent / 2,772 jobs = 213,564.21 dollars per job.

Another way to break it down to dollars per paid hour of work…

592,000,000 dollars spent / 5,760,000 paid hours = 102.78 dollars per hour

At $102.78/hr a person would be making $213,782.40/year. That kind of salary isn’t too easy to come by unless you are a CEO, pro athlete or in charge of a 1st world nation.

Government cannot give away unless it first takes from some other productive portion of society. It’s easy to look at the results of the stimulus and praise the Keynesian tactics for what it’s confiscatory policies create. But it’s irresponsible to ignore the fact that the capital that was reallocated away from productive portions of society resulted in less of what the markets dictated people wanted and needed. As a result, the welfare of society as a whole will have had to decrease. Society will never know what was not created with that capital.

Government redistribution always favors one group over another. Only a truly free market enterprise system is capable of utilizing the wealth accumulated through private production, with the most efficiency, toward the most desired ends. When such a system is in place the wants and needs of the largest portion of society stand a better chance of being meet compared to the system in which government picks winners and losers, or one group over another. The latter always results in more waste than the former. The numbers prove that is the case in LA.


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