This is a rush transcript from "On the Record," December 29, 2009. This copy may not be in its final form and may be updated.

SHANNON BREAM, FOX NEWS GUEST HOST: We hope you like tennis, because some of the $787 billion you forked over for the stimulus in the name of new jobs is being used to upgrade some tennis courts in Montana. The city of Bozeman plans to use almost $50,000 in stimulus funds for the project. The governor of Montana wants the project scrapped. Is this just a symptom of a much bigger problem? Joining us now is Steve Moore, senior economic writer for the "Wall Street Journal" editorial page.

Steve, you don't like the tennis courts idea, at least not with stimulus dollars.

STEVE MOORE, "THE WALL STREET JOURNAL": Hi, Shannon, great to be with you.

You know, I'm a huge tennis fanatic, so I love the idea of building tennis courts. I just don't like them being paid for with federal tax dollars, and that's what's happening in this situation.

What's really outrageous about this particular earmark, Shannon, is this money was supposed to originally be used for public health, for clean drinking water and to improve the water situation in Montana, and it got diverted by the legislature to building tennis courts.

I think the point here is this symptomatic of what's going on around the country. We're finding over and over again, Shannon, that these stimulus dollars are going to very low-priority projects.

I just made a short list of these things -- music halls, soccer and baseball fields, railroad museums. In Tennessee, $250,000 to renovate a dilapidated Laundromat. I'm not making this stuff up, Shannon, it goes on and on.

One town got $40,000 in North Carolina to hire somebody to chase down more stimulus dollars.

BREAM: I've got to ask you, because a lot of supporters of the stimulus funds are going to say, well, these are events that create jobs. Is that legit?

MOORE: Well, they may create jobs, but in many cases, these are projects that the local governments or the states would never pay for themselves because they don't think that they are high priority. And my point is, why should people in California be paying to build tennis courts in Montana?

The whole system makes no sense to me. Why should people in New York pay for people to build a railroad museum in Tennessee? It's just a misallocation of resources, the worst waste I've seen in Washington, Shannon, in 25 years.

BREAM: Well, I thought it was interesting here. We've got a Democratic governor in Montana, Brian Schweitzer, who's saying I don't want these tennis courts. He tried to draft legislation that was very tightly worded and controlled so that only specific projects, you mentioned water safety, highway safety, those kinds of things, would get this funding.

Now, he's blaming the Republicans in his state legislature because he says they changed the wording, and so now the tennis court things are OK. It's another partisan battle here, it looks like. But the sides seem to be flipped in this particular battle.

MOORE: They do. And as I said earlier, what's really sort of outrageous about $50,000 going to tennis courts is the money was supposed to be used for public health. And what's happening is legislatures at the state level are now diverting these funds through earmarks to special pork projects, the very ones we were trying to get rid of at the federal level.

So what's happening, Shannon, the earmarks at the federal level are now happening at the state level, and they're going to projects that most communities would never funds.

In fact, I've talked to many city managers, and they said, look, we would never fund this particular project, except for the fact that the federal government is giving us the money for free.

One of the governors told me about six months ago, he said, look, if the federal government is going to give us money for free, we'll pave our highways in gold if that what it takes to get the money.

BREAM: I'd like to see that. If that happens, we'll definitely have a Fox camera there because we have to see that.

Let me ask you though -- are there particular loopholes or problems with the stimulus that are allowing these kinds of things to happen? Is there anything that can be corrected? Not that anybody is going to turn away free money.

MOORE: I'd like to see some kind of federal oversight panel to make sure that this money isn't being used for outrageous projects that just have absolutely no public benefit. And I think that would be the responsibility of Congress.

Remember, the president told us when this whole program was initiated that he was going to go line by line through these programs to make sure they weren't funding pork, to make sure they weren't funding low priority spending projects, and that just hasn't happened here.

And by the way, only about a third to a half of the money has been spent. So we're going to see just a huge fountain of these programs being spent next year and into 2011. I'd like to see more oversight and more transparency.

By the way, Tom Coburn, the senator from Oklahoma, he has already spotlighted 100 of these projects that if anybody went to his website and looked at these, you don't know whether to laugh or cry when you read these things.

BREAM: He always has a great running tally of things that are being wasted and misspent within the government, and of course has garnered himself the nickname "Dr. No" because of the fact that he constantly votes against these things and says we're mortgaging our grandchildren's futures by paying for some of these things.

I have to ask you because we often hear the rumor bubble up, don't know how much there is to this time of around, but talk of another stimulus coming. Do you think there would be those bold enough to propose such a thing?

MOORE: Well, the House is really talking very seriously about that, Shannon, another $50 billion to $150 billion.

A, they haven't spent half of the stimulus money we already gave them. B, the first stimulus plan has been one of the greatest failures and public policy flops in the last 100 years. It hasn't created jobs. We've lost 3 million jobs.

Anyone who looks at the stimulus plan objectively says this has not worked. We've wasted money and we've increased the national debt by half a trillion dollars.

So I think having another stimulus bill after the failure of this first one is just throwing good money after bad, and that's something my parents always told me rule number one about finance -- don't throw good money after bad.

BREAM: But you and I both know, we see the press releases, we see the statements, we see folks on the Sunday shows spending this and saying the stimulus has been a success. Is that anything but spent?

MOORE: Well, let's look at it objectively. The president said if we did this program we would create 3 million jobs. He said we'd have an unemployment rate of less than eight percent.

And we could just look at the statistics. No, we didn't gain 3 million jobs. Sorry, president Obama, we lost 3 million jobs. No, we don't have an eight percent unemployment rate, we have a 10 percent unemployment rate.

I do think we're going to see a recovery in 2010. I think it's a natural recovery. I think all the debt and spending is probably inhibiting that recovery, but we would have been much better off reducing the debt or cutting taxes on small businesses rather than spending by the way, almost $10 million on the Washington National Zoo to house a tiger and a lion there. That's fine, but why is federal tax money being used for that, Shannon?

BREAM: Good question. As always, Steve, great to see you. Thank you so much.

MOORE: See you soon, Happy New Year.

BREAM: You, too.

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