I’ve lost a lot of my vituperous political vitriol, now that the Presdent-elect is close to being inaugurated. Obama has been reticent concerning Gaza, but vocal about the domestic economy. A few things concern me about the plan to spend our way out of the recession, which is shaping up to being a Recession with a capital “R”.
The feds have already borrowed up to the hilt, and interest rates are already as low as they can get. There’s no give in either direction, but we’re going to borrow even more money from China. Eventually, the Chinese are going to feel they’re in a position to dictate terms, the way Washington should be dictating terms — but isn’t — to Wall Street.
Something else that has been brought up lately by pundits is that the Great Depression wasn’t ended by the New Deal, but by World War II. This time around I don’t see how a war is going to help, because we’re already in a war, and in fact it’s one of the reasons why the economy is in such a mess.
Regarding how the stimulus package money should be spent, there’s a double challenge. First, immediate job creation would come from infrastructure repairs — roads and bridges — which would require relatively little planning and could be ramped up quickly. But bigger projects shouldn’t be for civil engineering, like FDR’s Hoover Dam, but must instead be for energy technology. People used to point to the offshoot technologies that came from NASA in the sixties, but those had only a minor impact on the economy. The creation of the Internet and the GPS were of incalculable value, and both came from Defense Department dollars. Let’s get out of Iraq and spend the money on the biggest security risk facing America — oil dependency.
