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Stimulus: Feel-Good Spending v. Investment in the Future

Stimulus: Feel-Good Spending v. Investment in the Future

There is no question that Barack Obama’s plan for creating jobs will ease the pain of this economic downturn.  However, in the long term, not all jobs are equal.

There are examples from the past of public spending programs that employed many Americans and paid off handsomely.  Constructing the interstate highways cost 114 billion dollars (adjusted for inflation, upwards of 425 billion) and employed hundreds of thousands over 30-plus years.  The result facilitated interstate commerce greatly, contributing to American’s industrial and commercial success and prosperity.

John F. Kennedy’s Mission to the Moon likewise employed hundreds of thousands in the effort to send a man to the moon during the 1960s.  The payoff was in leadership in science and engineering and advances in aerospace and communications technology, which have transformed our economy and way of life.

It is against these examples that our current spending proposals in congress should be measured.  Building and repairing roads today will no longer transform the industrial or productive capacity of tomorrow.  Even repairing bridges, some badly in need, though valuable, will not multiply the economic gains through new industrial and commercial success.  Roads and bridges are important, but they should simply be included in existing infrastructure plans to be paid for where they bring value within government budgets.

What does measure up?

The types of public spending that could bring jobs now and prosperity in the future are those that successfully address current economic problems.  For example, nationally, we spend far too much money on health care for the services that we receive.  We could put doctor and insurance records on line in a step towards better managing our system and we can spend more now on research and development from pharmaceuticals and cancer to genes and stem cells with an aim to achieve cost-effective health benefits. 

Similarly, in urban centers we spend too much time commuting in traffic, lowering our productivity.  Investment in substantial urban public transportation, such as a comprehensive Los Angeles Metro system and smarter choices nationwide, could make a real difference in long-term productivity and savings in pollution and energy costs.

We also need clean energy that is competitive with oil, which has been economically efficient but environmentally costly.  This might take 10, 25 or even 50 years to develop.  But the investment would pay off in securing new affordable energy that was less environmentally harmful and creating a new commodity that we make and trade rather than import to our detriment.

Most importantly, our education is failing to produce a new generation that can lead the world in science, technology, research and all the other fields of importance to our continuing leadership and prosperity. Our commitment to education can’t fluctuate with the cycles of the economy unless we accept that our leadership in the 21st century will waiver.

Investment in any of these fields, that are designed to enhance productivity and profitability of public and private activity, will increase value.  In many ways the other spending included in the stimulus bill is just a temporary fix with long-term negative budget-deficit consequences. 

In this light, both Democrats and Republicans have it wrong.  Spending on anything but investments in the future is wasteful–tax cuts ease the pain, but do nothing extraordinary for the future health of the nation.  

We can certainly provide unemployment insurance as a safety net for the many who are suffering, but the stimulus bill must aim for productivity and prosperity in the future economy or else it robs us of our precious resources without laying the foundation for sustainable improvement.  

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30 comments

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9:53AM PST on Feb 27, 2009

I have Medi-Cal but I have to pay for my prescription coverage and it is not sufficient enough to avoid having to pay for high medical expenses. But that keeps getting cut back too. I currently am on disability. I did not receive enough money to be able to use a schedule A for my tax return and I donated an operable car to a charity last year. I had student loans to write off plus I had high medical bills and dental bills. I had an adjusted gross income of $14,000.00 and I have to pay child support at $650.00 per month for five children that I agreed to let my husband take due to his being able to afford and attorney and I could not represent myself in court. Not to mention the fact that I had to go to court every month in his attempts to take the children from me. Sooooo, I still had to pay over $800.00 in taxes. So who really is supporting the government? It certainly isn't the rich.

9:41AM PST on Feb 27, 2009

This commentary has received many comments on many levels & issues. The below poverty level citizens are a priority. Some of the roads & bridges can not wait for repair. The stimulus will help the upper middle class to spend more money. The stimulus will help the people who live in poverty & MAY benefit (I say may because most don't file a tax return because there is no benefit due to no tax owed and no tax due). Only those who file a tax return will benefit. What about the families who have lost their homes? Now there is relief to keep families from losing their homes, but isn't that too late & unfair? Now we are bailing out big corporations that should have been just as frugal as our government in past spending. What about the little mom & pop stores that had to close because people had to stop spending at the even more economical stores? What about the people who are truly living on welfare because they have no other choice? Cut back on them due to others' who evade taxes & have huge incomes? What about those who need & can't afford dental work & risk loosing teeth & can't afford insurance & do not have insurance offered at work due to the costs their employers have to cover? How about those who are using the county & state governments to subsidize their health care because they can't afford a "good" medical policy? I'm on disability, I have to pay for my own medical insurance & my own dental coverage.

8:44AM PST on Feb 15, 2009

It is not "against these examples that our current spending proposals in congress should be measured."(1950's and 1960's) It is against the New Deal that our current spending proposals in congress should be measured. We haven't been in the economic mess we're in now since the 1930's. You can shoot for the moon later. Some of us have problems on Earth, right here, right now!

8:47AM PST on Feb 13, 2009

I cannot belive that anyone would think that welfare cheats and tax fraud, are more than the tip of the iceberg when it comes to the problems we face. They are nothing but a cheap shot target. The real problem is and always has been, waste. That is what I fear with the upcomeing stimulus and the spending, not that they intend it for, but how well its spent. I have seen far too many things that look great on paper and fail in excution, for lack of decent oversight or even people to run it, who know what they are doing. That is what we must focus on most of all, accountablity, and effective and real control over the way the monies are used. Not piddly little bits, but huge and pervastive controls, that make every single thing we are spending money on, either produce the desiured result, or toss em, before they waste more of our resoures, which also means doing the same thing to programs we already have, which Obama has promised to do. Will Rogers said, any man can suporrt his family, what he cannot do, is suport his family and his goverment, at the same time. What his goverment needs to do, is learn to live as cheaply as its people. I say, yeah.. its about time they did.

3:04AM PST on Feb 12, 2009

Hillary,

I agree with your statement, "It is obvious that going the ways of old have gotten us to where we are today." The ways of old are spending more than we have. One of my coworkers used to say, "it's never too late to do the right thing." I say let's start now and scale back this stimulus plan.

Dan

5:49PM PST on Feb 10, 2009

I am a little confused as the stimulus plan Obama has covers many items discussed in the above article???????? To add, the reason items such as bridge repair are included would be for the very reason that they are not included in basic current budgets (where YES they SHOULD be). If these basic systems fail it is obvious the blow that would be served without the ability to SUSTAIN our current business flow and capitol. Not every situation will be like New Orleans where the affluent and unaffected can look past the destruction of CURRENT structures.

Obama wants to set up the country to thrive again. It is obvious that going the ways of old have gotten us to where we are today.

I appreciate the article and am grateful for such a platform for truthful representation of the facts and the search for real solutions that stand in the current times with the needs of now which Care2 provides.

12:13PM PST on Feb 9, 2009

He needs to fix things here at home like taxes,(IRS) & welfare abusers. If he wants to fix ecomony I know a few Ideals that will work I'm sure of it. He wants to help us middle class families. Tell me how this helps us middle class families? When you have people year after year abusing the tax system. We have to fight for a decent tax return to help us and there is people who only pay in on there federal taxes maybe max amount $1,200 and get any where from $4,000 -$6,000 back. Why don't we see that kind of tax return? Why is that fair to us middle class people /families ? Here's where the defict is getting larger and larger and to help who? Not the middle class families. I would really like to see him fix these problems first before any others.I sure would like to see the same tax return as those familes have so would others.If you want to help middle class families there needs to be some kind of "CAP" put on at tax time that you can't get no more than double the ammount paid in no matter how many dependents you have. They put a cap on Welfare It don't matter how many children you have this is the max that we will give you.
I think Welfare should be screen better as well as any of free state benefits. Welfare and any other benefits that are out there for help should have a 1099 form and some amount of money should be reported to Irs at tax time as money recieved.Cash assistance, food stamps, Medical coverage ,all utilies,food banks.

11:28AM PST on Feb 7, 2009

The current debate in the Senate over the Stimulus reminds me of how difficult it will be to enact change. Regardless of what the people want, there are some in Congress--including the Blue Dogs--who will raise objections to it.
It's easier to give a tax cut than to actually do something. I agree with Mrs. Boxer whole heartedly.
Homelessness has been around for much longer than any of us realize. The underemployed and thos living beneath the poverty level are there due to the fact the minnimum wage remained so low, survival needs sky rocketed, and Work at will labor laws have always supported the Employers. It would be interesting to find out how many lay offs and terminations were not done under the guise of 'good business' but whim of the upper management in order to save their own skins.
While Mr. Obama's heart may of been in the right place, I say, right now, to hell with bi-partisanship. It's not going to happen. The Republican agenda of stagnation is to engrained in their psyches.
While infrastructure is important and will trickle onto other areas of retail. I am saddened not to see out of the box thinking--such as repealing the Work at will statutes, freezing utility, housing, dry good and food costs to give American's a fair break.
I agree with Mrs. Box wholeheartedly. This is a crime against the American people.

6:45AM PST on Feb 7, 2009

The writer's comment that repairing roads and bridges, plus increasing funds for unemployment insurance is "feel good spending" is a poorly chosen expression. Sure, we certainly need investments in the things he mentions, yet we have neglected our roads and bridges and we can't ignore the needs of our mushrooming unemployed. The stimulus package can't be treated as though we're attempting to hop on both legs. If it seems to him that we can't "multitask", so be it. We must do all these things. I do agree that we don't need tax cuts, a Republican fixation that can only not advance us into the 21st century but take us back to the 19th. Governments must lead the way to constantly modernizing a society and that takes money. There are other things also but that's another discussion.

6:37AM PST on Feb 7, 2009

There is a problem with creating jobs in the building market. There can be a sudden infusion of new building projects but there must be an afterthought of what these new projects will bring to us.
After a project is finished money has to be allocated once again to keep the project running or to maintain the infrastructure. In a way it seems to be like too much growth too quickly. Make note of so many private companies that have gone into rapid growth and later had to file bankruptcy under the trememdous debt created bt the expansion.
Building new roads will create new jobs. However, it seems that we cannot even keep the roads we currently have paved and safe. How will we maintain these new roads.
I believe the major focus of help has been in the wrong direction and encumbered with too many special interests by Senators in an effort to gain their support. The stimulus package once passed will not provide the relief that so many people think they will receive. Six months from now things will be just as bad and people will be wondering what happened to the jobs that were to be cretaed.

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