Oh no, the pods got me!

[isomeme]

I can't believe I'm about to write this, but I find myself agreeing with the Republicans on the stimulus package.  It's filled with funding which has no credible link to immediate economic stimulus.  I mean, sure, virtually any money the government spends will create jobs, but that argument is disingenuous.  Programs like alternative energy

Comments

[isomeme]

I agree strongly that funding for programs such as alternative energy and rebuilding our cities for greater efficiency are critically important. I merely believe that these should be addressed in separate debates from the issue of immediate economic stimulus.

Not all federal dollars spent have the same fiscal effect. Give and extra dollar to a poor person, and that person will almost certainly spend it immediately. Give that same extra dollar to a wealthy person, and they are more likely to save it. Thus, programs that employ the unemployed or put more money in the hands of the relatively poor have a higher "spening multiplier"; more immediate economic activity results from such dollars.

This argues for funding programs for which (a) can be started or expanded immediately ("shovel ready") and (b) involve the employment of relatively unskilled workers. There are only so many researchers in the US capable of contributing to e.g. fuel chemistry research, and nearly all of them are already employed. Put money into alternative fuels, and you're merely changing the projects those researchers work on. Expanding the supply of qualified research-level chemists takes a generation of effort to improve science education in our schools, provide incentives to study chemistry, and the like.

Conversely, in a WPA-style public works program, anyone who can hold a shovel or paintbrush can be immediately employed. Thus one can reduce unemployment on a broad scale while simultaneously pumping dollars into the economy which will immediately be spent, creating a ripple of prosperity among retailers, grocers, and the like.

Again, I strongly agree that we (as a country) also need to make longer-term plans. I also strongly believe that it is disingenuous to piggyback such efforts on a bill alleged to be a short term, time-critical fix for immediate economic problems.

[paradoxosalpha]

You seem to have cogently restated your original post without really responding to the points I raised. Wrt the one specific instance of spending on "alternative energy," it is not my impression that the funding is intended to be dedicated to primary research, as if "alternative" meant "alternative" to anything we know of now. Instead, the idea is to prime the industrialization and commercialization of competing known energy sources that have not been able to get a business toehold in the face of the inertia of our existing systems of production. Such an effort could create a wide variety of jobs, many of them requiring only very general skills that may have been developed in other lines of work.

Again, other than its Republican critics and their recruits, I am not aware of anyone touting this stimulus spending as exclusively "immediate" or short-term in nature. The saner voices seem to be emphasizing a mix, with a sort of time-release advantage to different sorts of projects. That's even given as the reason for including some tax cuts, with the idea that although they have a dismally low "spending multiplier," they take effect much more rapidly. By the same token, longer-term spending has an effect on the economic climate now, because of the extent to which business is built on expectations.

[isomeme]

David Brooks makes a good argument about the value of focus in this op-ed piece (though his "harmful to state governments" point is rather silly, I think). In brief, longer-term programs with effectively permanent effects are inherently (a) more complex and (b) more controversial than immediate, focused stimulus spending. Why rush into the former when this is guaranteed to create more partisan resistance, and also to result in poorly thought out initiatives being pushed into implementation?

We're metaphorically in the position of doctors treating a patient who suffers from both heart disease and a severed femoral artery. It seems unwise to spend time planning and implementing appropriate cholesterol control measures until we've stopped the bleeding.