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Invisible stimulus

| Sunday, June 20, 2010

LEADVILLE, Colo.

Just days after the dramatic highway separating this old mining town from Aspen opened, 15-foot snowdrifts still line the narrow Independence Pass, even with the temperature at 60 degrees.

Below the 13,000-foot peaks ringing the pass, a large homemade sign dominates a front yard on the edge of town: "Vote Obama• Embarrassed Yet?"

Welcome to "flyover" country -- the nation's midsection, which Washington only views from the air and never really experiences on the ground.

President Obama may parachute in sporadically for invitation-only town hall meetings to promote "Recovery Summer," but that doesn't count as real in flyover country.

The administration's six-week push to reinvigorate its stimulus narrative will showcase jobs in stimulus-funded projects to improve highways, parks and other public works. Yet stimulus dollars never hit the ground here.

"We didn't receive any of the stimulus money," says Leadville Mayor Bud Elliot. "We weren't eligible because we are considered too poor of a community."

Elliott, a Democrat, says the American Recovery and Reinvestment Act was "designed to help large cities, not small-town America."

The Old West charm of Leadville, once a thriving mining town, remains remarkably intact. Described proudly by locals as "a hard-drinking town where most people own at least three guns," its economy now rests on tourism.

Aspen transplant Chad Rose, 28, is puzzled that such a well-polished 2008 political campaign, which promised so much, has failed to connect so spectacularly: "I know that we weren't voting for this much spending. In fact, we were voting against it."

An Orlando, Fla., native who began his career in Wall Street finance, he wonders where the stimulus money really went.

"You had to be shovel-ready. We are small-town, (so) we weren't," Elliott says after attending a three-day seminar to see if his area could reap new jobs from stimulus-funded projects.

"The stimulus program had very little stimulus," says Allan Meltzer, Carnegie Mellon University political economy professor. Its largest item was a transfer to pay for state budget deficits, he explains, adding: "Transferring the deficit from the state to the federal budget doesn't do much."

That relief for states was temporary; this year, as many as 300,000 teachers may be terminated for lack of funding.

Public policy is supposed to be about fixing problems. To fix a problem, you must change people's behavior.

"The stimulus spent a lot of money, ran up the deficit and debt and, worst of all, generally did not change people's behaviors," says Jeff Brauer, Keystone College political science professor. "That's bad public policy."

If the stimulus was so necessary, the money should have gone entirely to much-needed infrastructure improvements. At least we'd have something to show for it.

"More importantly, it would change people's behaviors," Brauer says, explaining that businesses -- particularly small businesses -- would create new jobs that would lead to more permanent employment.

Elliott would have loved to see stimulus money used for infrastructure projects nationwide, not just in Leadville: "You could say I am somewhat disappointed in this administration so far."

Three hundred miles down the road, the mayor of Lamar, Colo., says his town of 10,000, which also did not receive federal stimulus dollars, created its own stimulus.

"Very little of what Washington does helps us out here," says Mayor Roger Stagner. "While there is always an expectation that you might get help, our economy depends on ourselves."

Brauer says flyover voters, especially those who supported Obama, feel a major disconnect with the administration. "They wanted Washington to tighten its belt and balance its books, just as they have had to do with their own families in these tough economic times."

What they got was more out-of-control deficit spending with no regard for the implications.

"And worse than that," he adds, "they are not seeing the benefits of this deficit spending. It's not giving them better lives, it's not fixing the problems."

From one end of Colorado to the other, shiny new "Project funded by the American Recovery and Reinvestment Act" signs dot highways -- large, small and barely navigable -- with no visible evidence of recent, current or coming construction.

Yet in the shadow of Pikes Peak, on the outskirts of Cimarron Hills, stands another oversized homemade sign expressing displeasure with the White House.

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