President Obama on Monday reiterated his call for a new stimulus plan that would create jobs, improve our crumbling national infrastructure, and boost the still struggling economy. As reported by McClatchy:
His plan calls for rebuilding 150,000 miles of roads — "enough to circle the world six times" — laying and maintaining 4,000 miles of railways, restoring 150 miles of airport runways and advancing a new air-traffic control system.
Obama said that America's crumbling infrastructure weakens our economy and leaves the nation trailing foreign competitors in investment, including China, Russia and Europe. By embarking soon on the infrastructure buildup, he said, "we will create good, middle-class jobs right now."
Obama's push comes with the nation's overall unemployment rate stuck at 9.6 percent. Voters are upset about the economy and job losses, but they're also unhappy about federal budget deficits and the skyrocketing national debt. The deficit for fiscal 2010, which ended Sept. 30, was $1.3 trillion, the second highest since World War II, according to an estimate last week from the Congressional Budget Office. The highest came the preceding year, at $1.4 trillion.
What McClatchy didn't mention was that the August deficit was down from August 2010, with rising tax revenues making the difference. In other words, Keynesianism works. Deficit spending in a deep recession can end up paying for itself, thanks to the resultant economic boost. Which is part of the point.
As previously noted, private industry is not hiring, and will not resume doing so any time soon. Only the government can do it. And as Meteor Blades wrote, when the president first announced this plan:
Like so much else that plagues the U.S. economy, decay of the U.S. infrastructure has been building for decades. That's in part because policymakers at the local, state and federal levels have been more interested in building new stuff than in keeping the old stuff in good repair. It's also a product of the magical thinking known as out-of-sight, out-of-mind, or in budget-writers' parlance, deferred maintenance.
Bridges don't fall down when the first rivet rusts through. Roads don't become unusable when the first pothole appears. A rotting rail bed merely slows trains down; it doesn't stop freight or passengers from moving altogether. But deterioration from deferred maintenance is cumulative. What starts out as an easily fixed, relatively cheap repair becomes a gigantic, hugely expensive rebuild, often sparked by a killer catastrophe that spurs a duh moment for the media and many citizens, who inquire: how could this have happened? There is, obviously, the short-sightedness of politicians and other civic leaders, but the anti-tax attitude that has permeated so much of the populace plays a large part. Examples of this myopia abound. Americans shudder at that poor education so many of our children receive, but the desire to get them out of schools that can only be described as ramshackle frequently collides with the attitude that no taxes should be raised to change the situation.
This is the right policy, and given the inevitable Republican obstructionism it should be an easy political win. If Congress were to vote on it. Which Congress has yet to do.