Obama's Stimulus Waste: $7 million per House on Internet Access

Posted: Jul 08, 2011 12:01 AM

In our blog post of July 5, 2011 we cited analysis of the recently release quarterly summary report of Barack Obama's Stimulus that concluded the Administration spent $278,000 per job they claimed to have "saved or created" with the $666 billion the White House has spent thus far of the more than $800 billion authorized by the legislation approved in 2009.   

The Administration used the Stimulus as a private slush fund to funnel vast amounts of money to programs and industries favored by the President.  

One of his campaign pledges was to expand broadband internet access, particularly to rural areas, and with the Stimulus check book in hand, Obama proceeded to deliver on that promise spending a total of $7.2 billion, with $2.5 billion specifically allocated to "Rural Utilities Service" (RUS).  

Jeffry Eisenach and Kevin Caves of Navigant Economics, a financial and economic analysis and consulting firm looked at the results of Obama's rural broadband expansion efforts.   The results aren't very pretty.

The Navigant analysts evaluated programs in three areas: Southwestern Montana, Northwestern Kansas, and Northern Minnesota that received Stimulus funds to extend broadband access to homes currently lacking service.  

According to their report, it cost on average $349,234 per household.  

But, it gets worse. 

In the Montana region, there were actually a number of providers, including wireless, that already provided service in the area.  

Eisenach and Caves found that if 3G wireless was included, only seven households in the entire region could be considered to be without any option for access.  Thus, the cost to extend access to those seven homes was about $7 million each.  

Like Einstein said of insanity, this was doing the same thing over again and expecting different results.  

According to the Eisenach and Caves, "Prior investigations have shown that RUS' broadband subsidy programs were not cost effective, and often funded duplicative coverage in areas already served by existing programs."  

But, Obama funded it anyway – and sent American taxpayers the bill.  

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