Stop trying to chip away at unemployment with blind spending bills and start spending smartly on infrastructure for our long-term prosperity, Steven Pearlstein writes in a pretty smart column:
At this point, neither the politics nor the economics support the idea of spending large sums, directly or through tax breaks, just to shave a percentage point off this year's unemployment rate. But with plenty of slack in the economy and interest rates at historic lows, this is the ideal time to borrow and invest heavily in public infrastructure that has been badly neglected over the past 30 years.
I'm referring not only to roads and bridges but also to airports and air traffic control systems, urban transit, high-speed rail, schools and university facilities, national laboratories, national parks, "smart" electric grids, broadband networks, green generating plants, and health information networks. Properly chosen, these projects can have huge long-run economic payoffs while tangibly improving the lives of all Americans.
Yes to safer roads, and faster trains, and better schools, and smarter grids, and all of it! But after imparting "the urgency of deficit reduction," isn't Pearlstein basically calling for ... more spending on top of spending? It's worth pointing out that, from an economic production standpoint, some infrastructure investments can prove costly and ultimately wasteful even if their caretakers have their gaze firmly locked on long-term. As somebody's probably said before, one man's stimulus is another man's dumb earmark.
Take high-speed rail, for example. The federal government has put down $2 billion on a HSR system to connect Southern California. Will faster trains whisking folks from downtown to downtown in SoCal decrease congestion, increase inter-city economic activity, help the environment, and even cover operating costs? It's very much possible. It's also possible that those $2 billion have been flushed down a toilet chasing a project with no shot at completion or solvency (I really hope not). The same goes for many complex federally sponsored tech projects. I guess I'm not saying I disagree with Pearlstein. I just think he's written a great skeptical column that ends too blithely.
In the meantime, we're kissing both 10 percent unemployment and the point of deflation. In the short term, let's extend jobless benefits right away.