Questions Forthcoming, I Swear

So there's some push-back against the economic stimulus bill winding its way through congress... Sen. Kay Bailey Hutchison was on Meet The Press saying she hoped (and that many like her hoped) that they could remove the "social spending," and keep the spending that is stimulative or oriented towards job creation. I think the "social spending" she referred to was expanded unemployment benefits and food stamps and perhaps direct aid to the states.

It seems to me that most people can't be blamed when their job is cut back or curtailed when they're the last domino in the line that began with Wall Street-types generating bets on whether about the bets another Wall Street-type made. Also, when folks are paycheck-to-paycheck, if you eliminate their paychecks, you cut back demand in the economy. I'd think, then, that these folks are ones you'd want to be subsidizing when you're combating a slowdown. This is, I understand, a pretty common view... So I'm a bit skeptical about the skepticism.

Similarly, the states and localities provide a lot of services that we need... garbage, sewer, a certain amount of transit-related services, jails, hospitals, etc. I guess we could eliminate all the velvet-lined foster homes... but after that, you're really running up against the fact that most places just don't spend huge amounts on things that the people don't need. I agree that I see things that might be absurd, but these things just aren't large budget items. When you cut them, you get a small savings, to be sure, but the state revenues aren't going down by a small amount--they're going down a large amount, and possibly a huge amount, depending on where you are. I'm not sure that a drastic reduction in the quality of life is what Sen. Hutchison is hoping to achieve, but that seems to be a very likely result if she gets her way.

As far as gov't investment in the future goes, well, I think that'd be nice. Certainly, we can help lay down a nice foundation for growth. Example? Reduction in road transport costs opened up new markets for internal producers--NIDA under Eisenhower probably had just a little to do with that, and it was, at the time, a public works project of an unheard-of size. We could try more things like this with the understanding that the ultimate benefits may be down the line some, but good luck getting support for that. Instead, we may have a series of smaller projects that look unimportant right now: a big push for subsidizing broadband infrastructure; modernization of utilities (especially power); increasing the penetration of rail transport and transit; improvements to educational facilities.

What's great about things like that is that they may reduce the costs of moving things and people where you need or want them to be, may reduce the costs of getting the factors of production where you need or want them to be, etc. By doing that you may make possible products and companies you never dreamed of--something that undeniably happened after the interstate highway revolution. Now, not a lot of people would argue that the quality of life decreased precipitously (or even did anything other than increase rapidly [on average]) over the generation or two after that, I think--such investments can pay off!

So I'm not sure, but I think the idea of stimulus is possibly workable. I also think that Sen. Hutchison is wrong to divorce the "social spending" from the stimulus. Will it work? Maybe, maybe not: nobody knows, and only those who experienced the depression know how bad it can and has gotten in the U.S.