Did $505 million help Kansas cope?

Kansas received — and spent — $505 million in federal stimulus funds through September and there is now a dispute over the effect on the economy. Did the money stimulate or not? That is the question. And the answer depends on the party affiliation of the testifier.
State officials say having the federal dollars created or saved 6,531 jobs. Those jobs were in highway construction, public schools, the health industry and state prisons. About two-thirds went into the state Medicaid program which provides health services to the poor and to give benefits to the unemployed.
Republicans complain that rather than stimulate the economy, the federal money merely allow-ed legislators to avoid cutting the budget still further. They point out that the economy is still sick, that unemployment is still high and tax receipts still below previous levels.
These negatives are all factual — but beside the point.
The Kansas economy, like the national economy, rises or falls with consumer spending. Consumers don’t spend when they are unemployed. The money funneled in-to construction wages, school district wages and the health care industry that provides services to Medicaid clients allowed those recipients to spend more than they otherwise might have, making the economy stronger.
The money spent providing and extending unemployment benefits flowed as directly into the economy as money from any source could.
A picture-perfect ex-ample of the Republican criticism of the Democratic administration’s program came from the lips of Sen. Sam Brownback: “Unfortunately, it is much more of a government stimulus than an economic stimulus and the bill will be left to be paid by our grandchildren,” he told AP writer John Hanna.
His separation be-tween the government and the people would be funny if it weren’t so exasperating.
How irritating it is to have a U.S. senator suggest that money spent on public schools, public highways and to care
for the indigent is somehow less important to the state’s economy than money spent in the private sector — as though public employees weren’t people; as though state spending was somehow robbed of any impact on the economy.
Conservative economists argue that the money would be better spent by giving it to business in the form of more tax credits for purchasing equipment or doing research. This conten-tion appears to define stimulus as creating new jobs.
There are, however, two ways to pump more money into the economy.
One is to spend on existing programs, as has been done by Kansas officials, the other is to create new enterprises
or expand existing firms.
Both are important, but supporting existing programs has two important advantages: (1) it reduces unemployment by keeping people em-ployed; (2) it provides immediate income to those who otherwise would be without.
These two approaches to economic stimulation are really not in con-
flict.
It is important to support entrepreneurs and encourage business to expand. It is at least equally important to keep our basic public services functioning as close to a normal level
as the state’s income allows.
That is what the state has done by using the federal money to supplement the greatly reduced income the state is collecting from its recession-savaged economy.
Did the grant from Washington make us whole? No.
Will legislators be forced to make more hard decisions when the stimulus money stops flowing? Yes.
Is Kansas better off because the budget was bolstered by $505 million this year? Yes, by at least $505 million — and probably more because of the multiplier effect.
Let’s be glad.

Emerson Lynn Jr.