I have a big, strapping cat who’s infamous for darting under a couch and cowering when a dog, even the tiniest, enters a room. Well, a yipping toy poodle has entered the Senate from the state of Massachusetts.
Never a bold bunch, the Democrats have gone into full-on retreat, spooked by the loss of Teddy Kennedy’s Senate seat. While the economy continues to unravel, Obama responds by declaring a freeze on “non-discretionary�—i.e., non-military—spending. That’s not a bold agenda for change; that’s panic.
People prone to being scared by deficit spending should keep in mind the concept of false economies. In the short term, it would make financial sense to spurn admission to Harvard and instead pursue a degree at your local community college. Long-term, it would be absurd. Like anything else, debt can be abused (think miliary adventures in Central Asia, or housing starts in deepest suburban Orlando). But it can also be used wisely.
While Obama caves in to the GOP, somewhere, John Maynard Keynes is having a stiff drink—and Herbert Hoover is stifling a chortle.
What the economy needs now is jobs, not fiscal austerity. And government spending, financed at low rates by Chinese investors, can provide those jobs. And it can do so in a way that jumpstarts the real, productive economy—as opposed to the house of cards Wall Street keeps cobbling together with its ever-stacked deck. Moreover, the productive economy we stimulate can be green and sustainable—and robust enough to repay investment many times over.
Here’s an example. In analyzing outcomes of the 2009 stimulus package, Smart Growth America found that “In the 10 months since the American Recovery and Reinvestment Act (ARRA) was signed, investing in public transportation produced twice as many jobs per dollar as investing in roads.�
To wit, a billion dollars dumped into maintaining our highway system, which enshrines the oil-guzzling car as our chief mode of getting around, generated 8,781 job-months. That same billion dollars used to build out mass transit created 16,419 job-months.
