TW: Keeping the massive broadsides being fired against the stimulus plan straight is challenging. But I am going to start trying. I will start with infrastructure. In short our infrastructure sucks. I get sick every time I go to Europe (and would probably feel the same in parts of Asia but have not been there in awhile), their roads/rail/airports/cell phones/broadband etc. make us seem more 3rd worldish than otherwise. I do not believe many Americans even realize this.
Yet the Republicans are pissing all over many of the infrastructure components of the Obama plan. They have two primary beefs: will "bridges to nowhere" end up being built and will the spending occur fast enough to stimulate sooner rather than later These are smokescreens.
Does some infrastructure spending end up misused, of course. But do some tax breaks end up abused by corporations setting up fancy tax shelters, do some bonuses end up getting paid to undeserving folks, of course. Nothing will be perfect but we desperately need improved infrastructure.
Regarding timing, one answer is that if the Bush Administration and Republicans would have been on the ball a year ago the spending cycle could have been nearing completion instead of getting ramped up now. Regardless, this economy is going to be weak for quite awhile, even if the spending hits 12 or even 24 months from now it will be relevant and needed.
From Leonhardt at NYT Mag:
"ONE GOOD WAY TO UNDERSTAND the current growth slowdown is to think of the debt-fueled consumer-spending spree of the past 20 years as a symbol of an even larger problem. As a country we have been spending too much on the present and not enough on the future. We have been co”nsuming rather than investing. We’re suffering from investment-deficit disorder.
You can find examples of this disorder in just about any realm of American life. Walk into a doctor’s office and you will be asked to fill out a long form with the most basic kinds of information that you have provided dozens of times before. Walk into a doctor’s office in many other rich countries and that information — as well as your medical history — will be stored in computers. These electronic records not only reduce hassle; they also reduce medical errors. Americans cannot avail themselves of this innovation despite the fact that the United States spends far more on health care, per person, than any other country. We are spending our money to consume medical treatments, many of which have only marginal health benefits, rather than to invest it in ways that would eventually have far broader benefits.
Along similar lines, Americans are indefatigable buyers of consumer electronics, yet a smaller share of households in the United States has broadband Internet service than in Canada, Japan, Britain, South Korea and about a dozen other countries. Then there’s education: this country once led the world in educational attainment by a wide margin. It no longer does. And transportation: a trip from Boston to Washington, on the fastest train in this country, takes six-and-a-half hours. A trip from Paris to Marseilles, roughly the same distance, takes three hours — a result of the French government’s commitment to infrastructure.
These are only a few examples. Tucked away in the many statistical tables at the Commerce Department are numbers on how much the government and the private sector spend on investment and research — on highways, software, medical research and other things likely to yield future benefits. Spending by the private sector hasn’t changed much over time. It was equal to 17 percent of G.D.P. 50 years ago, and it is about 17 percent now. But spending by the government — federal, state and local — has changed. It has dropped from about 7 percent of G.D.P. in the 1950s to about 4 percent now.”
http://www.ritholtz.com/blog/2009/01/the-big-fix/
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