Duffonomics: Stimulate This!

As a slight disclaimer, you will notice some of my writings may contain a bit of a political or ideological slant. While I will do my best to convey “just the facts” for the most part, I may get somewhat righteous when I feel strongly about a particular subject.

If you are at all like me, then you are probably trying to navigate the murky waters of this new federal stimulus package, trying to figure out what it actually means to us as a country and to you as an individual. I am going to do my best this week to try to shed some elementary light on the many confusing aspects of this proposed bill.

First off, let’s take a real basic look at the fundamentals of why the Democrats and Republicans are bickering over the basic tenets of this bill in the first place: The Republican Party has always been about “less government” and “more business.” As far as the stimulus package, they are striving for more tax cuts and incentives in the loan market—ostensibly making it cheaper to forge ahead with entrepreneurial endeavors. Personally, I don’t believe a bunch of new small business start-ups will be enough to get us back on our feet. Business left alone is what got us into this heap of trouble over the last eight years.

The Democrats believe that a larger government role in our day-to-day life will even out the highs and lows of the economy. In this new stimulus package, a large chunk of the money is earmarked for building infrastructure (roads, wind-powered energy, dams and the like). Some may think that these create only short-term jobs. But I would argue that new roads will open up more of our country for commerce; repairs to existing roads and bridges will ensure the continuation of commerce on them in the future; dams and other renewable energy projects will need ongoing servicing, creating long-term jobs in addition to the short-term construction jobs; and every kilowatt of power these projects generate is one we don’t have to send money to some foreign oil bandit to pay for. Grants for college students (Pell grants) are also included, and we would all benefit from the education of our youth—not to mention that such grant money would instantly be put back into our schools on our soil.
 
Let’s take a gander at some recent economic history. When Clinton left office in January 2001, we had (according to CNN) a budget surplus of $230 billion. Also, our unemployment rate was at 3.9 percent according to the Bureau of Labor and Statistics. When Bush left office, we had a $410 billion deficit (according to AP, February 12, 2008) and our unemployment was at 7.2 percent. Hmmm.

In the last 25 years, the two parties have become increasingly polarized, battling each other in the House and Senate and voting along party lines on particular bills and measures. I believe this “party first” atmosphere has done nothing but cause mutual demonization and hinder our progress as a nation. The Republicans are now claiming that Obama’s stimulus package mirrors Roosevelt’s programs in the 1930s and suggesting those didn’t work. Bullshit is what I say! Maybe it wasn’t a fast elevator ride out of a hole, but it was a focused and upward movement out of the Great Depression. My grandfather Jon Harrington, an immigrant from Ireland who had fought in World War I as a new American, finally found work through the New Deal—after many years without a steady income—building dams throughout the West. And you want to talk about long-term benefits? We were able to win World War II in no small part because of air power—air power that would have been impossible to produce without the electricity from two FDR jobs projects, the Bonneville and Grand Coulee dams on the Pacific Northwest’s Columbia River. Those two dams provided the juice to manufacture tens of thousands of bombers and fighter planes in the 1940s as America scrambled to catch up to the military industrial might of the Axis powers. It’s no coincidence Boeing is in my hometown of Seattle!

Larry Summers, our new chairman of the White House National Economic Council, summed up the squabble succinctly on ABC’s This Week by stating that “those who have presided over the last eight years, eight years that brought us to the point where we inherit trillions of dollars in deficits, an economy that’s collapsing more rapidly than at any time in the last 50 years, don’t seem to me in a strong position to lecture about the lessons of history.” Indeed.