I hate this idiotic 'free money' business that DC is presenting as economic stimulus. What I prefer is the idea of using the same money for a massive, nation-wide project to rebuild and expand infrastructure. That way most of the money stays in America, rather than getting spent on imported consumer junk from China. It would create millions of jobs in the construction industry and the resulting infrastructure would facilitate American trade for decades to come.
The problem that smart people have with this idea is that it would take too long to get started when we need economic stimulus right now. You'd be spending 18 months to 2 years just doing the engineering studies and preparation before actually breaking ground.
So here's my response to that. Have the first phase of the thing be solely the construction of projects that have already been planned and prepared by state governments. Every state has a laundry list of these things. Roads or bridges or new sections of railroad that have been planned for years, where the transportation studies have been done, the preliminary engineering studies and planning have been finished and everything is ready to go, except that the money just hasn't materialized. You could easily spend $50 billion of stimulus money on these types of projects and have ground breaking happening all over America within the next few months.
We could also be making part of this stimulus package double as education spending by constructing new school buildings in low income areas that haven't had the property tax base to build new schools since the Johnson administration. Then there is the sadly crumbling infrastructure of many of our national parks and forests. Access roads, cabins, ranger stations and picnic areas that haven't been maintained properly and often need to be replaced entirely.
This is where we should be putting the money for economic stimulus. We can start on many of these projects almost immediately - it doesn't have to mean waiting 2 years for results. Handing out 'free money' that's mostly going to end up boosting the Chinese economy is idiotic. It'll be a sugar rush with an impact that will not last beyond a single fiscal quarter of increased consumer spending. We can take that same money and create jobs through the construction industry right away.
The demand for all of that iron and steel used for bridges and other projects would kick the American steel industry into high gear, helping to maintain a crucial industry that has been sadly neglected in this age where we have convinced ourselves that tech jobs behind computer screens can really be the long-term foundation of American prosperity. Boost steel and you boost companies that make machinery and equipment used in mills and mines. You're boosting coke processing and transportation to get all of these materials between the various processing points.
Throwing money at people and asking them to piss it away on consumer junk that came from overseas only reinforces what is going horribly wrong in the American economy. We have got to make things. A society that builds, has. Economic stimulus needs to not only be rapid but it needs to focus on encouraging the employment of Americans to build things.
5 comments:
Right the hell on, man. I don't entirely agree with a few points but I'm glad to see some of the more-thoughtful people making more sense than the folks in Washington.
Hey, you just described the WPA and CCC from the 1920s and 30s.
We really could benefit from this kind of work and should do that rather than "give" us our money back.
Paul
I am in total agreement with your ideas, whether it is rebuilding the interstate system or repairing the national parks. At least if that was done we could look at the expenditures as useful.
However, the politicians main emphasis is on "providing a cookie" to everybody.
When they finish giving their cookies out, there will be many poor and unemployed who will be the proud owners of a new HDTV.
And there will be nothing to show for the countries expenditure.
Thing is, I doubt many will be spending their money this time around, regardless of what changes the Federal Reserve has in store.
And then what happens if China decides to stop buying our debt?
You're right on with this one. Just look around at all the lasting great projects we still benefit from that came from the CCC and WPA. It makes complete sense to invest in rebuilding our infrastructure.
Of course, to play devil's advocate, the construction field is full of illegal imigrants making sub-standard wages. If the money just goes to illegal workers, then is it really any different that encouraging people to buy foreign products via tax cuts?
Also, one difference between the WPA and CCC Programs is that they were administered by the government. Isn't there the possibility that the construction industry will opt to just soak up any extra money thrown at it without really accomplishing a whole lot? Or, it'll be used to build "Bridges to nowhere", instead of improving much needed infrastructure.
The devil's in the details.
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