The Center for American Progress likes to accuse corporations of hoarding record amounts of cash during this weak recovery. But it turns out there is another entity that is sitting on $9 billion that could be spent right now. The Los Angeles Times reports:
The Brown administration is sitting on $9.1 billion in infrastructure bonds that have been sold and are costing the state a ton in debt payments. A rough estimate is $630 million a year.
…
Deputy Finance Director H.D. Palmer says the administration is working on it.
“We don’t want that money burning a hole in our pocket,” he says. “Particularly in this environment.”
Agency heads may have overestimated their immediate need for the construction funds, Palmer hypothesizes, and grabbed the money before their projects were ready.
“We thought it would go out faster,” he says. “We’ve been telling them they need to get this money out.”
The message is that if projects aren’t shovel-ready, shunt them aside. Find others that are and spend the money on them.
To recap, the State of California has borrowed more than $9 billion for infrastructure, and is already paying $630 million a year in interest on those bonds. But the state can’t find enough shovel ready projects to spend that money on.
Meanwhile, Gov. Moonbeam is telling Obama, who has his own problem with finding shovel-ready projects, that he should also be borrowing and spending faster.
If liberals want to know why Americans believe tax cuts, and not more government spending, are the best way to grow the economy, this story is a great place to start.
