Front and center for the incoming administration is an economic stimulus package that would include massive spending that would put the national debt over one trillion dollars. Spending on infastructure is likely to receive little protest as who can’t name two or three bridges in their city or region that they wouldn’t be happy to see repaired? How many millions of people regularly drive on a highway that has seen better days? It’s a reasonable plan to boost the economy with these projects. The rub is that like regular citizens who incur debt, the government has to pay this bill at some point. So the request is to spend wisely. Don’t waste taxpayer’s money because a predetermined dollar number has been set. Put checks on this spending, don’t simply throw money at problems, and you may just end up with worthwhile bill.
A Washington Post Editorial similarly points out some of the pro’s and cons of such a huge stimulus bill…
Spending tens of billions of dollars on new infrastructure such as schools, bridges and water systems could also be effective, both as a short-term economic boost and as a means of raising the country’s long-term productive capacity. The problem, however, is that such a huge infusion could overwhelm the capacity of state and local governments to use it efficiently; as a point of comparison, the entire budget for the Federal Highway Administration is only about $40 billion. Spectacular waste would undercut both the economic effectiveness and political sustainability of a stimulus program. Senate Minority Leader Mitch McConnell (R-Ky.) has constructively suggested converting some or all of the infrastructure money into federal loans, which would give governors an incentive to take only what they could actually use.
The angling for pet projects has already begun in Congress, as the mere mention of so much new spending has brought out lobbyists by the score. To cite just one example — and not a particularly egregious one — Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vt.) has called a hearing on using stimulus money to help local law enforcement. Worthy as this might be, it has only a remote connection to jump-starting the economy. Fiscal stimulus must be, as the economists’ mantra goes, targeted, timely and temporary. Working with and, if need be, on the Congress, Mr. Obama must stick to those conditions.
Filed under: Economy, Moderate, Politics, Uncategorized | Tagged: economic stimulus, infrastructure, infrastructure spending, restrict spending, spend wisely, stimulus spending