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OpEdNews Op Eds    H3'ed 2/2/09


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Where are you on the stimulus plan? Inevitably a move this complex has so many parts there’s something for everyone to dispute. Both Democrats and Republicans agree that the massive package now before Congress should contain short-term measures, such as tax cuts and unemployment benefits, meant to immediately pump cash into the economy. The debate is whether the package should also include longer-term job-creating investments in key sectors such as health care, energy, transportation and education.

Some Republicans accuse Democrats of using the economic crisis to force through progressive spending program that would face far tougher Congressional scrutiny in normal financial times. They’re calling infrastructure investments on health care, energy, transportation and education “pork,” claiming that such spending has no value as an economic stimulus.

The fact is that the kind of infrastructure investments that anchor the President’s stimulus plan do more to stimulate the economy than the tax cuts favored by the Republicans. Experience as recent as last year shows that tax cuts, especially when given to the non-poor, are in large part not spent but instead saved or used to pay down personal debt, thus defeating their stimulative purpose.

Infrastructure investments, however, create jobs, and put money in play. Dollars spent on repairing and rebuilding bridges, roads, power plants and grids keeps circulating through the economy. Wage-earners make mortgage payments, buy food, gas and clothing and go to restaurants and movies. Money spent on funding health insurance for the uninsured would flow immediately to health care providers. Money spent on research, development and construction of alternative forms of energy will -- in addition to lessening our dependence on foreign oil -- create huge numbers of jobs in an emerging industry where America should never have relinquished the lead.

The there’s the question of timing. Alice Rivlin, a respected Brookings economist, says that the situation is so urgent and the hole in the economy so large that including longer-term infrastructure projects that could take years to become fully operational would fatally dilute and delay the impact of the entire package.

She’s wrong. While some parts of the stimulus package clearly need to have effects visible in months -- such as extensions of unemployment benefits, mortgage foreclosure relief and middle class tax cuts -- the rest of it doesn’t. This recession/depression is going to last for years. While the constipation of credit will hopefully ease by the end of this year, the financial markets of this country are broken. Creating new, workable institutions and oversight regulations will take time. Mindsets have to change too: captains of industry and finance need to get that the era of casino capitalism is over or they need to be replaced. Consumer and voter confidence will not recover until citizens see corporations and markets operating with much more sense of responsibility for the good of the country as a whole.

So recovery will take more time than most people think. President Obama has promised that 75% of the infrastructure investments he proposes will pump money into the economy within eighteen months -- just about when the effects of many of the short-term stimulus measures are wearing off.

Finally, infrastructure investments are just that, investments in the long-term economic health and global competitive advantage of the country. According to Senator John Kerry, there are today $1.6 trillion dollars worth of unmet infrastructure needs in this country, including repairing crumbling highways, bridges and schools, and expanding alternative energy sources, power grids and broadband access.

Congress should follow the President’s lead in creating a stimulus package that is a thoughtful, responsible combination of short-term measures and longer-term infrastructure investments.

Democrats should listen to responsible Republican voices in the coming debates. But President Obama must stand firm. “I won,” was his retort last week to a Republican legislator pushing him to give ground. Those may have been the two most important words he’s uttered since his inauguration.



John Graham

President, the Giraffe Heroes Project,

Author of Stick Your Neck Out – a Street-Smart Guide to Creating Change in Your Community and Beyond

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John Graham shipped out on a freighter when he was sixteen, took part in the first ascent of Mt. McKinley's North Wall at twenty, and hitchhiked around the world at twenty-two. A Foreign Service Officer for fifteen years, he was in the middle of (more...)
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