Missed Opportunities and Priorities

The failure of the ARRA of 2009 to boost the economy and get people spending on the basis of hundreds of billions of dollars in projects and transfer payments is all too apparent as we've seen the economy sputtering along for more than a year.

Now, President Obama has announced his plan to seek another $50 billion stimulus for infrastructure improvements over the next six years.

“Over the next six years,” Mr. Obama promised “we are going to rebuild 150,000 miles of our roads — that’s enough to circle the world six times; that’s a lot of road. We’re going to lay and maintain 4,000 miles of our railways — enough to stretch coast-to-coast. We’re going to restore 150 miles of runways and advance a next-generation air-traffic control system to reduce travel time and delays for American travelers — I think everybody can agree on that.”

Mr. Obama vowed that the plan, which would include work on high-speed rail lines, would be “fully paid for” and not add to the deficit.

But Republicans, who have been campaigning on the theme that the president’s $787 stimulus package was wasteful and did not work, immediately cast aspersions on the plan, describing it as another “tax and spend” initiative from Democrats. Representative Eric Cantor, the House Republican whip, called it “yet another government stimulus effort, another play called from the same failed Keynesian playbook.”

That's a tacit admission that the prior stimulus package didn't work. Moreover, it shows the folly of claiming that projects that were shovel ready that weren't. The spending here isn't going to come soon enough to help with the current recessionary environment (particularly if it is being spread over six years - not in one burst).

The timing couldn't come soon enough for Congressional Democrats, who need to bring home some kind of benefit to their constituents in the depths of a strong recession.

Of course, the question is just how effective and targeted the infrastructure spending will be. I'd be all for infrastructure spending, including energy distribution, high speed rail, mass transit, and road and bridge improvements, but the project will end up going to projects that are little more than routine maintenance and long term projects that localities haven't exactly seen as a priority. Throwing billions towards those projects isn't going to provide long term improvements because the localities will not maintain and upgrade their existing infrastructure.

Moreover, there remains a single project that is all ready save the lack of financing - the construction of 4WTC, which is on hold pending an improvement in the real estate climate in New York City. The President would have been wise to have included that in the package - a multibillion dollar financing package to complete reconstruction at Ground Zero. Instead, the project remains on the shelf. Construction at 4WTC would result in the creation of hundreds of direct jobs in all manner of construction trades, along with thousands of ancillary jobs in the fabrication of steel and materials for the building and other industries.