It has become accepted wisdom in Washington that soon after President-elect Barack Obama takes office, he and Congress will team up to implement a truly gigantic "stimulus" program that will spend as much as $1 trillion on infrastructure projects throughout the country. But that became accepted before any debate occurred on whether it is wise.
So far along has the discussion proceeded that few in the halls of power are discussing whether such a project should be undertaken. Rather, current debate is over just how to proceed with it. We wonder just how serious anyone involved in that discussion can be, in view of the fact that politics will rule how money in such a stimulus package is spent.
In fact, politics is the very reason why infrastructure spending is at the top of the stimulus list on Capitol Hill. It would allow lawmakers to dole out hundreds of billions of dollars, taking credit for it when they are up for re-election. It also would allow governors in states with budget trouble to shift their own spending away from infrastructure projects, helping to balance their own books.
Beyond much doubt, hundreds of billions of dollars would be spent for flashy new construction projects, if the infrastructure package is approved. Meanwhile, states such as West Virginia and Ohio that are having trouble with maintenance of existing infrastructure will receive little aid in that regard. To the contrary, every state in the nation will be saddled with new roads, new bridges, etc. - all of which will need maintenance in years to come.
Any argument over what types of infrastructure spending are appropriate misses the point entirely, however.
Economic stimulus programs are supposed to do just what their names suggest - give the economy a shot in the arm. Infrastructure spending simply isn't the best way to do that.
If Obama and Congress are eager to spend $1 trillion, we have a better idea for them: Cut taxes on American families and businesses.
Allowing businesses to keep hundreds of billions of dollars they otherwise would have sent to Washington would create an enormous number of new jobs - and would prevent some who have them now from being laid off.
Allowing American families to keep hundreds of billions of dollars would give them money to pay off debts - perhaps even some of those "toxic" mortgages. It also would encourage them to spend more.
In keeping with the idea of promoting job creation by the private sector, Obama and Congress ought to look into reducing the regulatory burden that costs so many companies dearly - and makes it more difficult for them to keep the economy humming along.
Beyond any doubt, the best type of government stimulus is to simply allow Americans to keep more or our money - and make it as easy as possible for us to create new jobs. If Obama and Congress are serious about rebooting the economy, they will do that instead of using the infrastructure strategy. It would do little to restore long-term health to the economy. Tax cuts - though they go against the liberal credo of higher taxes and bigger, more intrusive government - are the way to go.
Obama has pledged that "change" will be his guiding light. During the new year, we suggest that the best possible change would involve abandoning the liberal strategy of taxing and spending - and allowing Americans to keep and spend more of our own money. When the economy is concerned, Washington is not nearly as effective as are American working men and women in engineering recovery.