NCPA - National Center for Policy Analysis


July 20, 2009

The stimulus bill "includes help for those hardest hit by our economic crisis," President Obama promised when he signed the bill into law on Feb. 17.  "As a whole, this plan will help poor and working Americans."  But has analyzed data tracking how the stimulus money is being given out across the 50 states and the District of Columbia, and it has found 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 higher income states received more.

The transfers to the states having the least problems are large:

  • Even after accounting for other factors, each $1,000 in a state's per capita income means that the state got $21 more per capita in stimulus funds.
  • With a spread of almost $38,000 in per-person income between the top and bottom states, this has a sizable impact.
  • High-income states get considerably more stimulus money; states with higher bankruptcy rates got a lot less, not more, money -- roughly $86 less per person for each percentage point increase in the state's bankruptcy rate.
  • States with higher foreclosure rates were treated very similarly, losing $82 per person for each one percentage point more of the people suffering foreclosures.

The spending data come from two reliable sources: the Wall Street Journal and the Federal government's  On June 30, the Wall Street Journal published data on stimulus spending by state for seven categories of social spending (education, HUD, health, crime fighting, job training, arts, and food and farming) and eight categories of infrastructure spending (transportation, water, energy, military, veterans, government, outdoors, and emergency shelters). The Journal's data allow a comparison by each category of government spending:

  • Their total accounts for $195 billion out of the $787 billion that will be spent on the stimulus.
  • Out of this money, the amounts vary a lot across the nation, with the very lowest, a mere $504 per capita in Florida, to the highest, at $3,712 per capita in D.C.

If one relies on the accounts instead, which, as of July 8, reported $218 billion of spending but without the detailed breakdown provided by the Journal, the bottom line is the same: the money is not going to the states hardest hit by the recession or to the poorest states, says

Source: John Lott, "States Hit Hardest by Recession Get Least Stimulus Money,", July 19, 2009.

For Wall Street Journal report: 


Browse more articles on Tax and Spending Issues