… before Obama’s stimulus goes into effect. Quote the Associated Press:
It will take years before an infrastructure spending program proposed by President-elect Barack Obama will boost the economy, according to congressional economists.
The findings, released to lawmakers Sunday, call into question the effectiveness of congressional Democrats’ efforts to pump up the economy through old-fashioned public works projects like roads, bridges and repairs of public housing.
Less than half of the $30 billion in highway construction funds detailed by House Democrats would be released into the economy over the next four years, concludes the analysis by the Congressional Budget Office. Less than $4 billion in highway construction money would reach the economy by September 2010.
The economy has been in recession for more than a year, but many economists believe a recovery may begin by the end of 2009. That would mean that most of the infrastructure money wouldn’t hit the economy until it’s already on the mend.
[...]
Overall, only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year, just 7 percent. Just one in seven dollars of a huge $18.5 billion investment in energy efficiency and renewable energy programs would be spent within a year and a half.
[all emphasis mine]
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It seems like tax cuts or rebates would hit the economy much faster, as would cuts in spending on unnecessary programs. Maybe that’s a wiser choice of stimulus.
Tax cuts! Cut spending on unnecessary programs! You know there’s a Democrat in the White House now, right?
/snark
Though, to be honest, the Republican record the last few years hasn’t been anything to boast about either.
Frak, let’s just beat all of them with hoses and start over.
wow- you all voted him in with the knowledge of his intent to increase taxes- 1 day in office, and you are already screaming for tax cuts- it amazes me how quickly you have all abandoned your support. As for the economy- if any American had bothered doing the right thing with their last stimulous check, perhaps we’d be better off as a whole. Instead, people like the blogger above insisted you save it. Do not put anything back into the economy. Rather than help ourselves out of this hole, we as a nation, made sure we secured our seats on the sinking ship that is our economy. I did the right thing, I spent mine the moment I received it. How do you all expect the work force to come back, if you aren’t spending money (thus negating the need for added employee’s)? Businesses are closing left-and-right these days, and we have only ourselves to blame. Not the taxes, not the Government overspending (which is not a new practice)- just us. We were given assistance, and the vast majority of us ignored our Presidents request, and just waited until we were able to play the blame-game again. Shame on America for not helping themselves out of this depressed economic situation, and shame on all of you for demanding the Government do more to help you, all the while refusing to help yourselves.
wow- you all voted him in with the knowledge of his intent to increase taxes- 1 day in office, and you are already screaming for tax cuts- it amazes me how quickly you have all abandoned your support.
You must be new here. Kevin, Keith, and I were vocal critics of Obama throughout the election cycle. I voted for McCain, and I’m pretty sure they did as well.
I think saving money helps the economy just as much as spending. In fact, one might make the argument that saving actually helps more. When money is saved (my assumption is a bank and not between the mattress and box spring) banks have a larger supply to lend out, which tends to lower interest rates, which means that those borrowing have a lower hurdle rate to make investing/expanding worth doing…. so they do more of it.
I don’t see how that is obviously worse than spending.
Yeah, what Eric said. FYI: I’m a registered Republican. I didn’t vote in this election because I had moved to Texas and I was still registered in Michigan. However, I’d have been voting for Sarah Palin anyway.
Not like McCain had a snowballs chance of carrying Michigan anyway.
The theory behind fiscal stimulus is that during recessions, everyone panics and savings are no longer leant or invested (instead sitting in a bank vault or under a mattress), so the government needs to step in to pick up the excess capital and use it to reactivate the productive capacity that’s laying idle due to the recession.
There were signs of that happening last year, but the credit market now seems to be thawing out, either on its own or as a result of some combination of the financial sector bailout and the Fed’s massive expansion of the monetary base.
Governments can’t generally do a whole lot to stimulate the economy, and seem to be as likely to harm it as help it. Presidents especially have very limited powers, and in most cases I’d say it takes about a year for anything a President does to really take effect. Unless it’s something wildly radical, which few of them ever do. Other than keeping things properly regulated, which takes time to see the effects of, and making sure the money gets printed and the banks don’t founder, what else is there?
There’s "do" and "appear to do". Sadly, "appear to do" is very important in American politics.
Yeah. I’ve long found it odd that people expect the most from Presidents in areas where they have the least power (such as economic matters, which they are only one small actor) and pay the least attention to the areas where Presidents have the most direct power (foreign policy and military matters).
But every President faces the need to be shown as caring about the economy and doing something about the economy, and getting blamed if the economy goes bad even though that’s rarely fair either.
The last really radical changes by a President were during the first term of Ronald Reagan, with mixed success. Probably the one before that was Lyndon Johnson with his War On Poverty which also had mixed results and took years to short out. The most important before that was FDR and his New Deal during his first couple of terms, which also had mixed results.
It’s weird, but it’s like we pay the least attention to where a President can have the greatest impact, and paying the most attention to things that he has the least control over.
I was faced with a choice between two candidates I really didn’t like, so I ended up going with the Libertarians this time. Obama seems to be an eloquent, and thus far open-minded man; I believe he has good intentions. But I also think that attempting to spend our way through this is a band-aid when what is needed is real fiscal reform. Regrettably, I’m afraid we’ll have to wait until the sh*t really hits the fan in about 6-7 years for them to do something to correct the tax and spend policies we’ve seen for several decades. It will take more than a different executive. It will require a wholesale shift in fiscal policy in both the Whitehouse and Congress, a shift that makes the 1994 Contract look like small potatoes.
This just occured to me: "… roads, bridges and repairs of public housing."Â
Â
Giving up on the anthrpogenic part of Global <strike>Warming</strike> Climate Change Already? Lots of cement (BIG output of CO2) and asphalt (fossil deposit, heated on-site by more fossil deposit derivations).
Pfft. Not like that’ll stop Congress, nossir.
My main problem with the infrastructure spending idea, assuming that it’s a fait accompli, is that I’m absolutely sure it’ll be spent on big sexy projects — one to a Congressional district whether they need them or not — instead of actually repairing and upgrading infrastructure on a merit basis. I practically guarantee you that ugly utilitarian rusting rail trestles will get no attention at all, but probably need the most rebuilding.
Bryan Lovely’s last blog post..Compare and Contrast
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