by Bob Bestanii
One would think that in a time of emergency the U.S House of Representatives would do the right thing and craft a stimulus package that puts America first. Instead, it has created one of the most pork laden packages that has ever been voted on in the name of the American people. This comes even after they insisted on $165 billion in earmarked pork before they would approve the TARP bill. In so doing, the Democratic members of the House have demonstrated exactly why Congress has one of the lowest approval ratings of any institution in the country, a mere 9%.
The current financial crisis is real, it is global, it is serious and it is growing. Lower interest rates, the traditional instrument of economic stimulus (monetary policy), tends to take a year and a half to kick in. Yet day by day, the economic crisis is growing and is digging deeper wounds into Main Street. We tend to think about this panic as a financial crisis but the Main Street economy is already in worse shape than the financial markets. Congress is correct in now looking at spending measures and tax cuts (fiscal policy) to aid in the recovery effort. It must be bold and it must be quick about it.
But the cure can’t be worse than the sickness. It must be remembered that with the budget deficit projected to exceed $1.2 trillion, on top of the $10 trillion in debt America is now carrying, every dollar spent is a dollar we must borrow from abroad. If we frivolously spend borrowed money with no assurance of getting it back, we are digging our children into debt that they and their children will have to pay back in the future. What spending we undertake now, must be spending that will pay back dividends to our country and automatically repay the debt we take on. It must be invested in America.
Honey bee insurance subsidies totaling $150 million will not do this; neither will tens of millions for anti-smoking programs, ATV trails, fish passage boundaries, cars for government bureaucrats, remodeling the Commerce Department or numerous other earmarks. In the words of a fiscally conservative Democrat who voted against the House bill, the old bulls of the House are dumping in all of the pork they been waiting years to get passed. So the White House and the Senate are now rushing to save the stimulus package, to bring back a bit of reason into the effort. With any luck, the new version will save the government from the embarrassment that the House has laid at their doorsteps.
As far as experts go, economists are an argumentative bunch that seldom agree on most things. But one thing they do agree upon is that infrastructure spending has the biggest bang for the buck. Infrastructure spending will provide real “nutrition” to the economy, not the “sugar high” of most of the goodies in the House bill. The American Society of Civil Engineers have recently given America’s infrastructure a grade of “D” and have estimated that $1.6 trillion will be needed to restore us to the infrastructure we used to take pride in. The more that is spent on this sector the better. The House bill has less than 6% for infrastructure.
The argument is that such projects are not “shovel ready” and will take time to implement. But few Americans will argue with the notion that substantial maintenance on our roads, bridges, power grids, etc. must be undertaken now. Dangerous bridges and roads riddled with potholes and inadequate surfacing should be fixed to prevent accidents. Schools with roofs past their reasonable life should be replaced to protect our children. A stitch in time saves nine, as the saying goes.
Here in New Hampshire, for example, the Department of Transportation has a Red List of 77 bridges most in need of repair. The projected cost, according to DOT, would be $403 million. The DOT estimates that there are resurfacing needs on highways that would cost $58.7 million. Without Federal funds, Concord does not have the money to undertake many of these projects for several years and some would not be funded at all. This is the kind of spending which the Federal stimulus package should be used for: spending which provides immediate job creation and insures the safety of our citizens. Such spending will strengthen New Hampshire and America today and into the future.
Obama was voted into office on the pledge of changing Washington. Two weeks into his Administration a major test is before him already. For the sake of the country, let’s hope he passes.
Mr. Bestanii is a member of the NH Republican State Committee and the Chair of the Rockingham County Republican Finance Committee