By Evan Lisull

Supporters of the American Recovery and Reinvestment Act (ARRA – as in, “Mah fellow Americans, I have committed a grievous arra.”) quickly jumped on the news that the U.S. GDP contracted by a mere percentage point in the second quarter. The left-leaning Economic Policy Institute gushed, “The marked improvement in this quarter relative to last is largely due to the American Recovery and Reinvestment Act (ARRA).”

Unfortunately for them, there is more to the story than meets the blinkered eye. Federal government spending increased 10.9 percent in the quarter – this is true. But the majority of that increase came from an increase in military spending, which ballooned upwards by 13.3 percent. Non-military spending – by and large, the goods paid for by ARRA– increased by 6 percent, contributing a mere 0.15 percentage points to overall growth.

Few economists debate the fact that government spending has the ability to increase nominal GDP (although they will wonder how much that really means). Those that oppose use of “stimulus” measures oppose its long-term effects and question its efficacy over other measures such as a cut in the payroll tax. But the world of economics does not care when it comes to what kind of government spending is used; to use Keynes’ famous example, money spent on “digging holes” has the same stimulating effect as money spent creating the Hoover Dam. (Perhaps this explains why stimulus advocates care little for how exactly the money is being spent.)

Yet honest economics and American politics have very little in common, and so we discover the progressive corollary to the Kenyesian model: all government spending in a recession provides a GDP boost, except military spending. For the Republicans, there is a different axiom: government spending is wasteful, except when it’s perfectly efficient defense spending.

Nowhere are these cognitive dissonances more apparent than in the fight over the F-22 fighter jets. A recent Senate amendment that proposed to spend $1.75 billion for seven new planes ran into only one problem – no one who matters wants it. The commander-in-chief doesn’t want it. The secretary of defense doesn’t want it. None of the fighting forces in Afghanistan or Iraq want it. Sen. John McCain, touted by conservatives as an expert on military issues during election season, doesn’t want it.

But Sens. Chambliss and Isakson want it. The Republic Senators from Georgia, where much of the F-22 production occurs, retorted in a joint press statement that production of the planes “is essential to both our national security as well as the many local economies and thousands of workers that would be devastated as a result of these cuts.” Improving the national infrastructure, and saving jobs? That sounds familiar.

The debate takes on a Bizarro World quality. Conservatives who opposed ARRA’s “wasteful spending” waste no time in stridently defending this important structural improvement, almost perfectly echoing the rhetoric of the big-spenders. Those on the Left who pooh-poohed concerns about waste as petty in a time of economic crisis, have suddenly discovered their inner government skeptic as they pick apart the proposal.

For those forty-three Democratic senators that voted for the stimulus but against the F-22s: if immediate government spending is so important, why does it matter what exactly the money is being spent on? Your own colleague Chris Dodd has pointed out that shutting down this production could cost “up to 95,000 direct and indirect jobs” – so shouldn’t the program be saved in the name of “jobs across America”?

As for those twenty-three Republican senators that voted against the stimulus but for the fighter jets: if government waste is such an issue, why is it so inconceivable that it could occur in the Defense Department? If we should fear burdening future generations with debt, shouldn’t we also cast a worried eye at the unmitigated rise of military spending? And if this really is about national security against our ally India (and not about jobs in Marietta), then shouldn’t Americans be willing to increase taxes to pay for it?

While Democrats, with all the keys of power, can afford such hypocrisy, Republicans, striving for relevance, cannot. Until the party can show that it isn’t as committed to expanding the national deficit as it was during the Bush years, its message of fiscal conservatism will ring false to all but the most uninformed of voters.

Evan Lisull, an undergraduate at the University of Arizona, is a weekly contributor to The DC Writeup. He also writes at the Desert Lamp and The Kosmopolitan.

Via the New York Times Economix blog, a graph of the proposed stimulus package, currently in the House:

The “???” is explained as follows:

The summary’s introduction says the bill will contain “$275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.” But those accountability measures seem to have a giant loophole; in the “executive summary” of spending measures that immediately follows this grandiose statement, the various spending programs total only $518.7 billion. So they’re, you know, just $31.3 billion short. (To be fair, there’s a much, much longer list that follows that I have not yet had a chance to tally up, but I will hunt for the missing $31.3 billion there.)

In any case, I took the liberty of plugging all those figures into Excel to give you a sense of how the package is distributed. The category names are all taken from the report, with the exception of “???,” which I used to refer to the $31.3 billion unaccounted for in the executive summary.

Kosmopolitan contributor Connor Mendenhall, however, knows exactly where “???” is going:

Those military Keynesian multipliers, they’re hard to pass up