Where did stimulus money really go?

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Published March 23, 2012

| FoxNews.com

When President Obama signed his economic stimulus plan into law on February 17, 2009, he promised it “includes help for those hardest hit by our economic crisis,” and “As a whole, this plan will help poor and working Americans.”

But the newest data on how the stimulus money was given out across the 50 states and the District of Columbia shows a perverse pattern: The states hardest hit by the recession received the least money. States with higher bankruptcy, foreclosure, and unemployment rates got less money. And lower-income states also received less. 

Rather than helping out those in the toughest shape, it looks like Democrats ended up helping their supporters, including unions and many very wealthy supporters.

According to the Obama administration’s Recovery.gov, a total of $504 billion of federal contracts, grants, and loans to states and territories were awarded between February 17, 2009, and December 31, 2011. The amounts vary a lot across states, with the very lowest at $978 per capita in Virginia and the highest at $2,495 per capita in Alaska. The District of Columbia is the real winner at a whopping $7,603.

The transfers to the states having the least economic problems were large. The following relationships were statistically significant:

-- Each additional $1,000 in a state’s per-capita income resulted, on average, in the state getting $86 more per capita in stimulus funds.

-- States with higher bankruptcy rates got less, not more, money—roughly $67 less per person for each percentage point increase in the state’s bankruptcy rate.

-- For each one-percentage-point fewer people suffering foreclosures, the state gained $59 more per person.

--Eeach one-percentage-point lower poverty rate a state had was associated with $30 more per person.

-- Right-to-work states got about $266 less, and each one percentage point reduction in the percent of a state's workforce represented by unions saw a $26 drop in stimulus dollars per person.

On the other hand, states that had higher unemployment rates got almost exactly the same amount of money as states with lower rates.

The stimulus money may have failed to go to the states the president promised, but a clear pattern does emerge. Stimulus dollars were highly correlated to which political party controlled the state: Having an entirely Democrat congressional delegation in 2009, when the bill passed, increases the per capita stimulus dollars that the state receives per person by $460. In addition, the states that Obama won by the largest percentage margin in 2008 got the most money.

Even within states much of this money went to relatively well-to-do public sector unions and wealthy Democrats worth hundreds of millions of dollars or billions of dollars. Billionaire Democrat donors who received a lot of money from the Obama administration include: Solyndra owner George Kaiser; Tesla Motors owners Leon Musk, Larry Page and Sergey Brin; NRG Energy owners Warren Buffett, Steven Cohen, and Carl Icahn; Abound Solar Manufacturing’s Pat Stryker; and Siga Technologies’ Ronald Perelman. Among other wealthy Democrat winners were former Vice President Al Gore whose investment in Fisker Automotive was rewarded with a $529 million loan guarantee. All together about 75 percent of loans and grants have been given out to companies run by Obama supporters.

The Stimulus didn’t create new jobs. Whether the government has to borrow or impose new taxes or print up money, the money the government gave away wasn’t free. The money had to come from someplace.

For all the concern about Democrats helping the poor, they were merely in it to help themselves. The Stimulus was simply a massive partisan wealth transfer -- the largest single transfer in American history.

John R. Lott, Jr. is a FoxNews.com contributor. He is an economist and co-author with Grover Norquist of the just released "Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future” (John Wiley & Sons, March 2012).

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