While the stimulus package is throwing billions and billions and billions and billions to keep folks off the unemployment rolls, state and local governments are laying off workers at unprecedented rates. It strikes me as odd for the newspaper headlines to trumpet the extent of stimulus spending while under the fold is news of the latest state budget cuts and firings. The New Yorker's excellent economics correspondent James Surowiecki attributes this to the emphasis we place on state autonomy in our U.S. flavor of federalism and on fiscal conservative activists efforts over the last couple of decades to impose legislative constraints on state and local spending--see his convincing argument in this New Yorker article. We should use a big chunk of the stimulus money to prevent government lay offs--this would be the quickest and easiest way to save jobs.
Indeed, I don't understand why we did not put more of the stimulus money into WPA-style programs. I read recently about what terrible shape the National Mall in Washington is in, and that Obama was going to ask for a couple of hundred million to spruce it up. Why not just hire a thousand gardeners and masons to start work on that tomorrow? San Francisco Bay being clogged up by a new invasion of Asian kelp? Hire a thousand workers to pull it up. And let's put a lot more money into moving professionals that now find themselves unemployed (from the tech, financial, and other sectors) to teaching.