Republican congressional leaders are calling for substantial changes to the stimulus package. They want to put the emphasis on lower taxes and not on infrastructure spending, which they have conveniently labeled as pork. Minority leader Boehner alleged that lowering taxes to put a large amount of cash into the hands of consumers is the only tried and true fix. I don’t think he actually said ‘fix’ but that’s what it would be.
It is a tried and true method to fail under conditions such as the ones we have now, and I’m surprised he hasn’t figured that out. That kind of cash infusion would cause a spurt in consumer and small business spending of one sort or another that is not altogether different than a quick fix for an addict. A moment of euphoria, and then nothing but crash.
The kind of spending the administration seems to have in mind would form the backbone of investment in reconstructing the national infrastructure on which and through which long term economic prosperity depends. The jobs that will be created, along with requirements for machinery and materials, will have long term, multiplier effects enabling the national economy to achieve some solid footing. There are problems. Members of congress, governors and mayors will still try to get funding for projects that may have popular political appeal but add little to substantive economic health. The same goes for thousands of small special interest groups who see a chance for their long held pet project to at last get some money. For instance, we have a local museum that would love to get in on some of that, but, as great an asset it is to our community, that is not what this work is about.
Finally, there are those incredibly disingenuous, shortsighted politicians who keep whining about what this will mean to the deficit and national debt. These are the very same whiners who did not blink an eye to fund the war in Iraq with heavy borrowing. They didn’t care a bit about going into debt for a phony war whose primary long term return on investment can only be counted in the lives of the dead, but they whine about deficit spending to rebuild the foundation of our economy.