For it before I was against it

by John Quiggin on September 7, 2010

Last time I looked at a proposal to spend $50 billion on infrastructure to stimulate the economy, I thought it was a great idea. This time, I think it’s scarcely worth the bother. Why have I changed my mind?

Last time was in February 2009, and the proposal was made by the Rudd government for Australia (population 20 million, GDP (about) 1 trillion, stimulus about 5 per cent of GDP).

This time, its the Obama administration in the US (population 300 million, GDP (about) 15 trillion, stimulus about 0.3 per cent of GDP).

{ 33 comments }

1

Steve LaBonne 09.07.10 at 12:26 pm

It’s so quintessentially Obama- when you finally (many months too late) get around to issuing a proposal over which to pick a fight with the obstructionist opposition for campaign purposes, make sure it’s so watered down that it would do little good even if it managed to pass.

2

Phil Ruse 09.07.10 at 12:27 pm

Assuming you’re still for it in principle, what figure did you have in mind?

3

Alex Earl 09.07.10 at 12:30 pm

Part of me wonders if labelling it ‘Stimulus Funding’ is only so much spin, to make infrustructure projects palatable at a time when they might be considered frivolous. Even though the amount is in fact somewhat marginal, most people have a hard time conceptualizing numbers on this scale – the difference between 50 and 500 billion dollars is blurry enough for most that it might just be a way for Obama to dump money into some pet projects like HSR.

It’ll depend where the money goes I guess.

4

jim 09.07.10 at 1:19 pm

From the NYT story, it looks like the proposal is really to take the Oberstar transportation authorization bill, which has been languishing in Congress for lack of a funding mechanism, rejigger it a bit to frontload some of the additional spending and bring it forward. The $50B is the additional spending (over “normal” transportation spending) in the first year.

I really wish this administration would not be vague about their proposals.

5

jim 09.07.10 at 1:21 pm

And, by the way, congratulations on Julia “One is enough” Gillard.

6

chris 09.07.10 at 2:11 pm

@Phil 2: Well, I have no authority to put words in John’s mouth, but logically, a country with about 15 times the population and GDP of Australia should have about 15 times as much infrastructure that needs repairing or improvement, so $750 billion.

But while it would be difficult to get $50 billion past Congress, it would plainly be impossible to get $750 billion past them, for any reason, no matter how important and unquestionably necessary. (Well, except maybe killing foreigners. That you can always get a blank check for, in any country. Our species may have complex technology, but we’re always ready to prove that some of us still have no more sense than baboons.)

I think the problem is that the US economy is so mindbogglingly massive nobody but experts really believes how mindbogglingly massive it is, they just know that $750 billion is a huge amount of money. Which it is, but the US is a huge nation and so it needs to spend huge amounts of money to get worthwhile things done on a nationwide scale. Our politics is paralyzed by sticker shock in ways that a smaller country might not be.

(I had a similar reaction to the idea that the death of 3,000 people was a grievous blow to our nation of 300 million. It shows a lack of appreciation for the sheer size of the US.)

7

James Wimberley 09.07.10 at 2:20 pm

Chris #5: “..we’re always ready to prove that some of us still have no more sense than baboons.”
Challenge. Evidence please that baboons will not defend their individual and collective interests (against lions, hyenas, other baboons, wildfires, etc) pretty sensibly, within their cognitive and physical limits.

8

NomadUK 09.07.10 at 3:36 pm

it would plainly be impossible to get $750 billion past them, for any reason, no matter how important and unquestionably necessary. (Well, except maybe killing foreigners [...].)

Or handing over to financiers to make up their losses.

9

Uncle Kvetch 09.07.10 at 5:10 pm

it would plainly be impossible to get $750 billion past them

A tax cut that size would sail through a Republican Congress in 5 minutes, provided 90% of the benefits went to the wealthiest 10% of taxpayers.

10

Keith 09.07.10 at 7:04 pm

I think the problem is that the US economy is so mindbogglingly massive nobody but experts really believes how mindbogglingly massive it is, they just know that $750 billion is a huge amount of money. Which it is, but the US is a huge nation and so it needs to spend huge amounts of money to get worthwhile things done on a nationwide scale. Our politics is paralyzed by sticker shock in ways that a smaller country might not be.

On top of this, we have an opposition party that has adopted as part of its platform the principle that spending on infrastructure is Socialism, an inherently evil scheme designed to aid Blacks, Hispanics, Muslims, homosexuals, single mothers and other undesirables in their conquest of our lillywhite Christian nation. So it won’t happen, no matter the size.

Now, if we wanted to spend that amount and then some rebuilding Iraq so we could invade it all over again, the GOP would get behind that in a second.

11

Steve LaBonne 09.07.10 at 7:36 pm

I wish I lived in a world in which Keith’s post was satire rather than being, in every particular, a sober description of reality.

The US is really screwed.

12

Jack Strocchi 09.07.10 at 8:11 pm

Pr Q said:

Last time I looked at a proposal to spend $50 billion on infrastructure to stimulate the economy, I thought it was a great idea. This time, I think it’s scarcely worth the bother. Why have I changed my mind?

Precisely the same thought occurred to me. Its a case of too little, too late for Obama as the Congressional wipe-out looms. $50 billion is a rounding error in the US’s economy.

Interestingly, the US and AUS are a tale of two markedly different politico-economies with similar endings.

Rudd inherited a good economy, was a sound economic manager but was a lousy political tactician.

Obama inherited a lousy economy, was a weak economic manager but a savvy political tactician.

Yet both have taken, or appear to be heading for, major political hits.

It looks like the Left’s swinging voters are a notoriously fickle bunch. The QLD marginal voters in AUS and conservative DEMs and independent voters in the US.

13

Keith 09.07.10 at 9:23 pm

It looks like the Left’s swinging voters are a notoriously fickle bunch.

Can you blame us? We don’t have a dedicated party of our own and the Dems piss on us as much as GOP, because they know we have no credible alternative. Obama’s press secretary said as much a few weeks back. Anyone to the left of Reagan gets tarred as Hippie ComSymp and run out town on a rail and we’re left holding our nose and voting for the Establishment suck up, because our only other choices are the crypto-fascist party or some wackaloon with a tinfoil hat and no discernible pulse, let alone a coherent platform.

14

par4 09.07.10 at 11:06 pm

Keith; Vote third party and damn the consequences. I’m going to and will feel true to my beliefs in the process.

15

Nick Caldwell 09.07.10 at 11:49 pm

par4, George W Bush thanks people like you deeply and sincerely for following that strategy in 2000.

16

Substance McGravitas 09.07.10 at 11:58 pm

George W Bush thanks people like you deeply and sincerely for following that strategy in 2000.

Based on what?

17

James 09.08.10 at 12:37 am

But while it would be difficult to get $50 billion past Congress, it would plainly be impossible to get $750 billion past them, for any reason, no matter how important and unquestionably necessary.

Correct me if I am wrong, but didn’t this same congress pass a $356billion TARP bill (which ended up costing $89billion, but is nonetheless greater than $50billion), a $940 billion Healthcare Reform bill (yes, spread over 10 years, and paid for), and most importantly a $787billion Recovery and Reinvestment Act (bigger even than the “impossible” $750billion you speak of).

Add this to the $100billion for ARRA, and $185billion extra for medicare, medicaid, EI and SS. Clearly this congress clearly knows how to spend.

18

James 09.08.10 at 12:38 am

*Clearly this congress knows how to spend.

19

geo 09.08.10 at 2:41 am

George W Bush thanks people like you deeply and sincerely for following that strategy in 2000

Nonsense, Nick. The US electoral system is not just idiosyncratic but rigged, and the Democratic Party is not just disappointing but deeply, chronically corrupt. If people like you had voted for Nader instead of Gore (assuming you didn’t actually prefer Gore to Nader, in which case let’s just drop it), and had spent your energy since 2000 complaining about the electoral system and Democratic corruption rather than complaining about the only candidate who challenged them, we might be a little further toward a third party and proportional representation than we are now, which is further from them than ever.

20

BillCinSD 09.08.10 at 3:03 am

par4 @ 14 –in many areas and races there are no third party candidates.

seriously Nick, Bush stole the election with the help of the Supreme Court. Nader had little or nothing to do with it.

21

Scott 09.08.10 at 3:53 am

Returning to the substance of JQ’s point, I must agree that this package is too little to make any real difference to either the US economy or the US transport system. A stimulus of 0.3% will not generate confidence for anyone.

Nor will it do much for transport, once spread across every State and earmark in the United States. For transport investment, this represents less than $1 billion per State, less than what is spent now on maintenance. The Big Dig Tunnel in Boston cost $14 billion. The proposed California High Speed Rail needs $10 billion for the first phase. It is sobering to compare with the Chinese rail program: $30 billion per year for every year from now till 2020, in a country with cheaper labor rates and additional spending programs for urban and rural freeways. Unless focused on a few key projects, this will achieve nothing.

22

Keith 09.08.10 at 5:15 am

Unless focused on a few key projects, this will achieve nothing.

But it will seem like it is doing something, which is really the whole point. No need to rock the boat by doing anything. That’s the Obama motto. Lets just do a quick kabuki number and call it a day. %0 billion gets flushed into the pork drain and we can ignore the problem of our crumbling infrastructure for another year, move on to some other pressing issue that we can dance around until everyone gets tired and goes home.

23

Patrick 09.08.10 at 7:16 am

$600 B in the first year, $700 B in the second year,$800 B in the third year….stop when the interest rate starts going up.

24

ajay 09.08.10 at 12:09 pm

If people like you had voted for Nader instead of Gore (assuming you didn’t actually prefer Gore to Nader, in which case let’s just drop it)

…it would have been an interesting decision, given that Nader himself preferred Bush to Gore and said so.

25

Nosmo King 09.08.10 at 6:43 pm

Re: Nader 2000– It is fairly easy to find incontrovertible evidence that Nader only campaigned in swing states, where his margin would conceivably tip them into the Bush camp. For Nader voters to pretend otherwise is disingenuous. I gave up my political principles in favor of harm reduction. When people say, “Oh, so-and-so is just the lesser of two evils” , that’s when I reach for my revolver. You just said that one choice is LESS EVIL, and you act like that’s not a real, significant choice? Go sit with your principles. I’d rather argue extending unemployment benefits with any Democrat than any modern Republican.

26

Keith 09.08.10 at 11:49 pm

Nosmo King: I’d rather argue extending unemployment benefits with any Democrat than any modern Republican.

Hope you like arguing, because that’s all you’ll get with Dems. They’ll debate until the proverbial cows come marching home and then roll over for whatever the GOP wants anyway. The “lesser” part of the two evils gets smaller and smaller every election cycle. At some point you have to concede that the Dems are only less evil because they are tacitly complicit with the GOP rather than actively abetting them.

27

chris 09.09.10 at 1:42 pm

They’ll debate until the proverbial cows come marching home and then roll over for whatever the GOP wants anyway.

If the GOP wanted health care reform, they sure hid it well. Or stimulus. Or even the Ledbetter Fair Pay Act.

28

Keith 09.09.10 at 8:28 pm

Chris: If the GOP wanted health care reform, they sure hid it well. Or stimulus. Or even the Ledbetter Fair Pay Act.

HCR is a pale shadow of what was proposed and the stimulus was too small by half. The GOP let those through only so they could underfund them and then say “Told ya so” when they fail.

And the Ledbetter Fair Pay Act was split along party lines almost to the man.

29

chris 09.10.10 at 1:54 pm

And the Ledbetter Fair Pay Act was split along party lines almost to the man.

You do realize this totally contradicts the idea that the Dems will “roll over for whatever the GOP wants”, right?

They passed what the GOP didn’t want, multiple times. That’s a provable fact. The fact that you’re dissatisfied with the extent of HCR that actually passed doesn’t make it “what the GOP wants”, it makes it mushy centrism. There’s nothing centrist about the GOP or its wants.

30

Salient 09.10.10 at 2:50 pm

When people say, “Oh, so-and-so is just the lesser of two evils” , that’s when I reach for my revolver. You just said that one choice is LESS EVIL, and you act like that’s not a real, significant choice?

“They’ll both maim you. The guy on the right will enjoy it a little more, and be quicker about it. Got a preference?”

31

mpowell 09.10.10 at 4:49 pm

I’m not sure this debate is really going to go anywhere it hasn’t for the past 10 years, but I know people whose lives have literally been saved by the terms of health care reform. I’m not sure what mental trap causes a person to believe that both sides are truly equivalent in the practical impact they have on the lives of US citizens, but it’s a pretty silly thing to believe. Revolutionary theory may also be wrong, but at least it can claim to never have really been tested.

32

HairlessMonkeyDK 09.13.10 at 9:28 am

The real problem with the “lesser of two evils” spiel, is that it forever absolves the Democrats and Democratic voters of everything.
“Yeah, we use indefinite detention, illegal wiretapping, continue monstrous wars… BUT!
Those OTHER guys, they STARTED the war crimes AND they’ll also torture and bad stuff like that!”. Which is true, of course. But so fucking what?
And even if, on the domestic front, everything was perfect:
The best healthcare reform, the best stimulus, the best of all possible worlds…
Well, guess what, the other stuff, the criminal stuff, the fucking WARS, wouldn’t go away. A lot more people might be willing to turn a blind eye toward it though.
Bribery does work.

33

chris 09.13.10 at 1:22 pm

The real problem with the “lesser of two evils” spiel, is that it forever absolves the Democrats and Democratic voters of everything.

Not forever, only until there’s an alternative that (a) is less evil and (b) has a realistic chance of winning elections.

The problem is, those requirements are incompatible because being evil to scary foreigners is so popular that every major party does it out of self-interest (or equivalently, any party that doesn’t see their self-interest in doing it doesn’t become or remain major). So we would need to dissolve the people and elect another.

When the majority wants their government to commit atrocities in the name of national security, that’s what they’ll get.

Comments on this entry are closed.