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View Diary: The Crisis Deepens, but Obama Has Too Little Room to Maneuver and Experiment (24 comments)

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  •  Avoiding Depression and "Stimulus" (0+ / 0-)

    Much bolder action is required to avoid the market meltdown turning into a second great depression. And it is needed now! So I'm writing to advocate two necessary actions. First, advocate to amend the Federal Reserve Act of 1913 to make the Fed (at least temporarily) a part of the government. Then the President can simply order it to print enough money for all stimulus and infrastructure needs and spend them into the economy without raising the national debt one cent! Would this be inflationary? - Yes, but money-created re-inflation now would be good! Neither Congress (nor corporate compensation committees creating perverse risk incentives for executives) have any spending restraint anyway. Twice before in times of great national emergency our government has printed its own money: the Revolutionary War and the Civil War. Inflation occurred in Revolutionary times because the British printed billions in counterfeit. I emphasize that this is an experiment and can be undone later if it proves worse than a new Great Depression that might last 10 years again.
    Second, advocate the building of a 21st. Century railroad system as effective infrastructure stimulus. A study "Evaluating the Creation of a Parallel Non-Oil Transportations System..." reasonably argues  this would  reduce oil consumption, air pollution, highway truck traffic, and road expenses. It could generate many meaningful, healthy, outdoor jobs, and increase economic output.
    Work is needed refurbishing track, building parallel tracks, reducing choke points, building urban rail lines and 11 high speed rail corridors, connecting them, and electrifying the system. The cost of  non-oil high speed rail is estimated at between $250 and $500 billion, and $60 billion/year for urban rail for 20 years. Remember: GM, now begging bailouts, and Standard Oil of California, now Chevron, bought and tore up the urban tracks in 40 cities! The cost of the interstate highway system (47,000 miles over 35 years) came to about $425 billion in 2006 dollars. The sprawl enabled enormous expense and environmental damage through private car dependence. The money needed for this project can be gotten without increasing the national debt by a re-flationary putting of the Federal Reserve under the Treasury, printing greenbacks  and paying the workers.
    19th Century track building required 113 - 182 men to lay track up to 2 miles/day.  High speed rail requires automated continuous weld rail. But as a stimulus program, using appropriate methods, "workin' on the railroad" could provide very many jobs and benefit the economy and  environment. For example, we'll all feel and be safer on the railroads traveling at 200 mph+ if each mile of track has been recently walked by a responsible human supplementing automatic defect detection equipment.

    •  Thanks (0+ / 0-)

      You are right about rebuilding the rail system. Some facilities vacated by Detroit firms could be used to build RR cars.

      Many of my friends agree with you, but we hear nothing about this at the national level.

      Sherm

    •  Both suggestions are excellent. (0+ / 0-)

      The pit has to get a lot deeper before we talk about bringing the FED under the elected government.

      I believe we abandoned rail transportation out of anger with the rail unions.

      IKE's biographers say we got the interestate highway system becaue of some military concerns he had.

      Maybe, both reasons

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