Fifty Billion Reasons To Be Uncertain
- Published: Wednesday, 01 September 2010 08:00
I wish it were this easy. The president sees the economy sputter and huddles with the best economic minds. He emerges with a plan to pump $50 billion into projects with long-lasting benefit to tax payers ó transportation infrastructure. And all of this paid for by zapping tax breaks to oil and gas companies. Poof: we're moving again.
As if. First, expect the gas and oil lobby to scream bloody murder; ditto for those who oppose any and all things Obama. Second, and here's where it gets scary, the $50 billion is a front load from a multi-year transportation bill, which requires an act of Congress. Remember, this is a Congress paralyzed on how to fund transportation.
The president's plan also calls for setting up an infrastructure bank that would pool private and public money, set funding priorities, and offer its investors some reasonable return. This idea has been bandied around before. But critics can now point to failings at Freedie Mac and Sallie Mae as reason for the government not to back private ventures.
The infrastructure bank would fund projects that had been reviewed and prioritized by a committee ó a vast departure from today's system of grab as much of the cash as you can for the home district, or ìearmarksî in polite circles. Opposing this change maybe the one thing liberal and conservative lawmakers can agree on, but I'm not holding my breath. For more on earmarks, read my interview with Robert Poole on page 36.
The problem is not just mud slinging for mud-slinging's sake. There is a fissure: a core philosophical division regarding the economy. One camp holds fast to the idea that the government has spent way too much, fearing that further debt could bring the United States to the point of financial collapse, a la Greece. Another camp will tell you that the stimulus money already spent, and the proposed $50 billion, falls far short of what is needed to spur the economy. This divide won't be easily bridged. And a compromise that splits the difference, say $50 billion, could end up proving both camps' doomsday scenarios right.
Picture the economy as Frankenstein's lifeless monster tethered indirectly to a lightning rod at the castle's highest point. There is clearly a storm raging, political at least. I applaud the Obama administration for trying to reanimate this monster. But the chances of a direct strike are about Ö 50 billion to one.
STILL LOOKING FOR a way to commemorate Sept. 11? Try these donation options: the National Fallen Fire Foundation assists families of firefighters who have died in the line of duty, and your local fire department.
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