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Somebody`s Not Clear On The Concept Of "Stimulus"
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December 19, 2008, 08:19 PM
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From the Washington Post, "Obama Team Develops Stimulus," about what`s now being spitballed as costing $850 billion:

The potential for massive new spending has touched off a frenzy among interest groups eager to claim their share of the expanding stimulus pie. The profusion of requests from governors, transportation groups, environmental activists and business organizations is spawning fears that the package could be loaded with provisions that satisfy important Democratic constituencies but fail to provide the jolt needed to pull the nation out of a deepening recession.

"It`s everybody`s wish list, everybody`s favorite program. And I think that`s a big mistake," said Alice Rivlin, a Brookings Institute economist and former budget director for President Bill Clinton who has been advising Democrats. "I agree with the Obama team that we need a big increase in public investment, but it should be done very, very wisely," rather than through a rushed process that risks being "seen as scattering money to the wind.

An Obama adviser involved in crafting the stimulus package said the transition team was keenly aware of the potential pitfalls and was focused on funding ideas that would quickly pump money into the sagging economy, fulfilling Obama`s promise to create or preserve 2.5 million jobs by 2011. Because many ideas probably won`t meet that standard, the adviser said, the team is developing a screen to keep them out.

So, let me see if I have this straight ... Experienced Democratic expert Alice Rivlin is worried that the Obama Administration will spend the money too fast and the Obama adviser responds that they are devising a system to make sure they don`t spend the money too slow.

Maybe I`m just not showing a positive mental attitude, but this does seem like a fundamental conundrum — you have to spend it fast to make it a stimulus, but then you are probably just going to waste it — that somebody ought to ask Obama about before Congress hands him $850 billion.

And why all the huffing and puffing over "infrastructure," which obviously takes more time to get going than just hiring, say, some social workers. Is it because "infrastructure" sounds manly and complex? Is it because the unions have been demanding more spending on infrastructure since 1982? (I recall identical authoritative sounding predictions during the 1981-82 recession from the AFL-CIO that America was about to collapse in a heap unless Congress voted a giant increase in infrastructure spending.) Is it to keep illegal immigrant construction workers from going home to Mexico before they can be "put on the path to citizenship" (and voting Democratic)? Is it because that`s what they do in Chicago and Obama mostly knows the Chicago Way?

And shouldn`t we start thinking about how to export more? The most obvious government policy to cut the trade deficit by selling more abroad is the for the government to cut back on environmental restrictions on mining.