Will the Stimulus Stimulate?

By Andre Jackson
March 6, 2009

All politics is local, said the late Tip O’Neill, former speaker of the U.S. House. Much of economics is local, too. Not to diss the global village, but in my humble opinion, people – and businesspeople – are most often concerned first and foremost with what’s happening in their town, or state.

That insight brings us to the capitals of the 50 states. Two giant themes are playing out now in the legislatures and general assemblies across the land. They are: a) the impact of declining state tax revenues caused by the dragging economy, and b) the impact of the nearly $800 billion stimulus package on those budget deficits. To a lesser degree (or at least the numbers are smaller), the same process and debate’s playing out before county commissions and city halls from Hawaii to Rhode Island.

Once President Barack Obama signed into law the mammoth economic stimulus bill, the trickle-down process began of filtering a good portion of that money to states and local governments. While it’s fascinating to tear apart the stimulus plan in search of mega-stories on where taxpayer billions are slated to go, in a sense the national programs are like the Olympics – fun to watch, but usually happening in a faraway place. In this case, the mega-billion action is going to be in D.C. for a while, as government officials newly flush with cash get machinery in gear to spend the money in an effort to restart the economy.

For business journalists, and even our colleagues covering statehouses and city halls across the land, much of the fun action is set to happen in our backyards as politicians and government workers work their own plans to use stimulus money. The 2009 stimulus package provides a rare opportunity to observe a huge government initiative from start to finish and chronicle how effectively it will be implemented. More importantly, we should observe and report all along the way on how the U.S. economy’s reacting in response to the national resuscitation effort. In other words, will the stimulus really stimulate? Time, and journalists, will tell.

Our local audiences need that story explained to them in terms they can grasp. The national numbers are so large that they may lack context for most readers who are not economists. We can add value to local audiences by parsing the numbers and explaining what’s really afoot, and what it will mean to citizens and businesspeople.

Let’s take my new home state of Georgia as an example. For a long time, the Peach State’s politics have been as red as the clay that backhoes once unearthed by the ton to plant new subdivisions in its growing capital of Atlanta.

Georgia’s very Republicanness put it in an interesting position, given the rise of Democrats in the last election. Other Southern Republican governors found themselves in similar situations. Georgia was facing a $2 billion budget deficit, caused by tax revenues mirroring the economy’s downward trend line.

The $787 billion U.S. stimulus plan came to pass while Georgia officials were pondering big cuts in state programs to stanch the flow of red ink. With Georgia slated to receive $6 billion in stimulus money, the state’s now facing a political debate over those dollars. How much to accept is the central question.

Many Democrats like Atlanta Mayor Shirley Franklin say grab every available dollar to help Georgia through this crisis. Fiscal conservatives like Georgia’s Republican Gov. Sonny Perdue worry that approach could put the state on the hook to continue costly programs after the stimulus money runs its course. In my old state of Missouri, Republicans contend the stimulus plan won’t work and “violates the rules of sound budgetmaking.” On the other side of the aisle, Missouri Democrat Gov. Jay Nixon promises to use all of the stimulus money allocated to the state, saying it provides “unprecedented opportunity” to create jobs and reposition the state’s economy.

The philosophical and economic debate continues, providing fodder for insightful news coverage that readers can use as they try to make sense of the economy’s gyrations.

The dual dollars-and-cents and political nature of this process provides an opportunity for cross-departmental newsroom cooperation. At a minimum, business reporters and government reporters should keep tabs on what the other’s doing and look for ways to share information and brainstorm the best possible stories for readers. Those best stories may involve shared reporting duties as journalists seek to understand what governments are doing and how that will affect both the business world and ordinary taxpayers.

Numbers are numbers, regardless of whether they’re in a state budget or on the minds of, say, highway construction contractors seeking a chunk of stimulus cash. As the federal dollars fan out from D.C. and into state and local accounts, it’s up to journalists to track those dollars and report how and where they’re spent. That’s our duty to both our audiences and our Republic.

Copyright © 2009 Donald W. Reynolds National Center for Business Journalism