After putting in his routine pitch for more lighthouses, canals, and post roads
They would understand, as President Eisenhower did, that at this crucial hinge in our history we cannot just be about cutting. We also need to be investing in the sources of our greatness: infrastructure, education, immigration and government-funded research.
Thomas Friedman mentions something with which I agree
Real conservatives would understand that you cannot just shred the New Deal social safety nets, which are precisely what enable the public to tolerate freewheeling capitalism, with its brutal ups and downs.
and proceeds on to the meat of his column, with which I also agree
Mr. Obama gave us the credible $447 billion jobs program, but his deficit reduction plan announced on Monday to pay for it and trim long-term spending does not rise to the scale we need. It may motivate his base, but it will not attract independents and centrists and, therefore, it will not corner the Republicans.
As The Washington Post reported: “The latest Obama plan ‘doesn’t produce any more in realistic savings than the plan they offered in April,’ said Maya MacGuineas, the president of the bipartisan Committee for a Responsible Federal Budget. ‘They’ve filled in details, repackaged it and replaced one gimmick with another. They don’t even stabilize the debt. This is just not enough.’ The most disheartening development, MacGuineas and others said, is Obama’s decision to count $1.1 trillion in savings from the drawdown of troops in Iraq and Afghanistan toward his debt-reduction total. Because Obama has no intention of continuing war spending at last year’s elevated levels, that $1.1 trillion would never have been spent.”
A Financial Times editorial summarized my feelings: “American voters are not looking for champions of their preferred redistributive stance, but responsible attitudes to the country’s challenges. If Mr. Obama suggests a millionaire’s tax can save ordinary voters from pain, he will fail, economically and politically.”
Let’s address these points one at a time.
When the National-Aid Highway Act was enacted in 1956 it was passed as a defense bill, it subsidized not only the inherently domestic economic activity of road-building but also the primarily domestic economic activities that would provide the engines for U. S. economic growth for the next quarter century: automobile manufacturing and the oil industry. The interstates and bridges it built were sound investments throughout their productive lives.
When President Kennedy announced his intention to send a man to the moon and return him safely to the earth, that, too, was promoted as a defense bill and it subsidized not only the defense and aerospace industries (which provide the lion’s share of our foreign exports) but it created the modern computer and telephone industries. Add the defense-inspired DARPAnet (you probably know it as the Internet) and you have today’s information-based technology. Apple grew from a garage to the company with the 2nd highest capitalization of any in the U. S. not merely from the inspiration, sweat, and determination of its founders but from the fertile ground created for it by a generation of defense-based infrastructure spending that looked not merely to the past but took a serious look at the defense needs of the future.
Can anyone seriously contend that building and refurbishing roads and bridges and refurbishing early 20th century schools will have the same lasting use and the same lasting potential for economic growth? The idea is absurd. It is too backward looking when we must look forward. Simply because China, until very recently desperately poor and lacking in 20th century let alone 21st century infrastructure, is building roads and bridges does not mean that it is equally sensible and prudent for us. China is also building cities without inhabitants. Should we be doing that as well?
I know I disagree with some of my readers on this point but income assistance for the elderly and medical care for the elderly are not only merciful and an intrinsic part of a society worth living in but they produce more economic activity here than would otherwise be the case. There is no ready alternative to consumer spending as an engine for economic growth in the United States. Our economy is too large, those in the rest of the world too small, and we cannot export enough to make up the difference. We need more exports and we need more business consumption but we will continue to be dependent on consumer spending for the bulk of our economy for the foreseeable future. That is not compatible with very high levels of saving.
The infrastructure that’s most desperately in need of refurbishing are these 75 and 45 year old programs. We’re simply not going to bulldoze them but they are in tremendous need of rehabilitation for today’s circumstances.
Leaving aside the prospective effectiveness and, consequently, prudence of an additional half trillion dollars of stimulus spending, when did it start being deemed serious to propose solutions that were wholly inadequate to the problems being addressed? If we were to cut the three highest ticket items in the federal budget in half and add the interest we’re paying on the public debt, that amount would still be higher than revenues. Primary default is just a few years away and the proposals on the table do very little if anything to address that problem.
Retorting that these proposals are merely opening offers is risible. The process of trimming the federal budget is overwhelmingly likely to prove so painful that the assertion that lawmakers will be ready to return to it immediately is far-fetched. We’ve got to change our evil ways, baby.