In today’s Winston-Salem Journal, a spokesperson for Wake Forest University penned an article defending the stimulus projects receiving funding that have been targeted for criticism by those opposed to the stimulus plan.
Three projects at Wake Forest University Baptist Medical Center were among 100 criticized by Sens. John McCain and Tom Coburn in their recent report on federal stimulus spending (“WFU work criticized, defended,” Aug. 5). The report is framed as a challenge to how economic-stimulus funds had been spent, but would probably have attracted less attention if the senators had not played on topics such as the use of monkeys in cocaine research, which are inherently controversial. Potentially divisive issues are just the kind that deserve well-informed and thoughtful consideration in a public dialogue.
The senators’ report questioned whether these stimulus-funded research projects directly assisted efforts at job creation and economic recovery. The answer to that question is straightforward and undeniable: Yes. Money spent on research supports good jobs for many people in our community.
People working at Wake Forest Baptist who are supported by research in turn support the local economy and businesses as they pay for housing, goods, services and their state and local taxes. Finally, money spent on research also moves through the community as scientists purchase supplies and services needed to conduct their experiments. In other words, in addition to supporting world class research, funding of Wake Forest Baptist research stimulates the local economy, retains jobs and creates new ones — exactly the intended function of the stimulus package.
As always, however, this argument leaves out one significant detail: where did the money come from to fund the researchers?
Stimulus spending necessarily (whether through taxation or borrowing) removes previously earned capital from the economy and reallocates it elsewhere. Sure, the government grants support the jobs of Wake Forest researchers, but what jobs are destroyed as a result of the government’s shifting of scarce resources?
I’ve written before about the myth of consumer spending being the key to economic growth. The actual driver of growth is investment spending supported by previously-earned capital (savings). Efforts that diminish the pool of available savings such as stimulus programs serve only to slow economic recovery and growth.