It is usually thought that pork-barrel projects funded by the federal government are windfalls for the states that get all that “free money.” But three professors at Harvard Business School reached the opposite conclusion.
Looking at figures from four decades, they found that a state gets 40 percent to 50 percent more earmark spending when one of its senators becomes chairman of one of three top Senate committees. A chairmanship lets the senator guide more “pork” back home. There is a 20 percent increase in earmark spending for a state if one of its House members becomes chairman of a powerful committee.
But does that money do much economic good? Far from it: With the influx of lots of federal cash to a state, companies in the state lose business and reduce their spending and employment sharply.
The professors “discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, (research and development), and other expenses,” Harvard Business School noted. “Indeed, in the years that followed a congressman’s ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent … .”
These results are “most pronounced” in the very industries that are the target of the federal spending! So not only does pork-barrel “stimulus” spending add to our disastrous national debt, but it actually harms the businesses and workers it is supposed to help!