Just straight up aid to states seems like a good idea too. State workers are getting laid off in MA and some of the services being cut are really important, e.g., programs for the severely mentally ill. They're also very short-sighted, because the increase in ER visits and hospitalizations will eat up any savings.
Also Head Start type programs are being cut.
1 (and the original post): Any stimulus package is expected to include a range of federal spending: direct aid to deficit-ridden states to help with Medicaid payments; aid for those hardest-hit in unemployment insurance extensions and food stamps; tax cuts or rebates for the middle class; and funding for infrastructure projects.
I had similar thoughts when I saw this. A month before inauguration, and he's a bad president already.
True, but he's not talking up the potential for expansion -- for using stimulus money to aggressively do more than we have been doing.
5 to 3. To 4, I'm fully prepared to be disappointed by someone new. But on the other hand, he's so much better than the alternative.
I know that Obama has talked up the early childhood intervention programs before, so maybe that'll be in a different package?
And give up on the Second Avenue subway! It's cursed, doomed!
Social service spending will be harder to get through congress for a number of reasons. The constituency doesn't have lobbyists, the republicans will oppose it on principle (specifically the principle of "fuck the weak"), and it is inherently a long term commitment which puts it in a different category from short term stimulus spending on infrastructure.
And give up on the Second Avenue subway! It's cursed, doomed!
Are you just being silly, or do you seriously believe it's unworkable? They've dug a bunch of it already.
2nd Ave. subway isn't only cursed, but actually caused the financial crisis.
More public transportation for New York City? Talk about the government bailing out the haves and ignoring the have-nots!
Public transportation money should go to north east Ohio. Its densely populated. Seventy five years ago, before the car makers target public transportation for extinction, the whole area was served by an extensive light rail & trolley network. The area is ideal for investment.
Also, north east Ohio is the real cultural capital of the US.
I remember reading somewhere that back in the glory days of light rail, you could go from NY to Chicago by trolley (not that you would, but that it was possible). One city's light rail network would stretch out far enough to touch the next town's, and there weren't any gaps until west of Chicago.
Most of these examples fail the "short term costs, long term benefits" test of responsible stimulative spending. You could theoretically pump up support for social services for 2-3 years, then cut back when the economy picks up, but more likely there would be a "ratchet" effect and letting the programs expire would become politically difficult.
My understanding is that the CAP stimulus plan is probably pretty similar to what Obama will end up proposing, and it's not too bad. There's $19 billion for transit, which is a pretty large amount compared to the usual level of federal spending on that stuff. Also a big bump in food stamp assistance, which has the added value of being among the more efficient ways of doing economic stimulus. No Medicaid boost, but there is a COBRA premium subsidy and more money for unemployment insurance.
Funding for home care would of course be fantastic (this is an issue my dad's been working on for a while), but that's a whole different problem that almost certainly won't get addressed through the stimulus package.
I'm pretty firmly in the "I'll believe it when I see it" camp in regard to the 2nd ave. subway. What'll happen to the project once it no longer directly benefits our most cranky-efficient builder-mayor?
13, 14: Wouldn't investments in education and care for infants and young children bring long term benefits in a direct and obvious way?
Do I have to call them investments in "human capital" in order to pass this test?
I can hear them building the Second Ave. Subway right now.
16: You forget that he is appointing himself Mayor-for-Life.
11: Southwestern PA was like that, too. My grandfather used to walk half a mile to catch the T every morning.
17: they pass the long-term benefit half of the test, but fail the short-term cost half.
17: Yes, but not with limited short-term costs.
The point of the "infrastructure" spending is that it supposedly pays off down the road. A subway makes us all better off, one more unnecessary procedure benefits only the doctor.
I say cut the payroll tax and raise the gas tax. We're aleady used to high gas taxes, so they're won't be any shock.
17: What Brock said. Short-term cost means you can spend the money and then stop when the recession is over. That's easy if you build a bridge, finish it, and stop; harder for an ongoing social program.
Cutting the payroll tax and increasing the gas tax would in fact decrease the marginal propensity to consume, and thus worsen the situation. Other than that, good suggestion, though!
Now, that's not a reason not to spend money on social programs at all -- everything I said is still a good idea. But I do admit, come to think of it, that it doesn't fit the pattern for stimulus spending.
You mean the marginal propensity to consume foreign oil? I don't think that's a problem.
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Nearly missed this. Famous Neurological Patient H.M. is dead. Obituary is here .
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A small aspect that seems to get unaddressed in these stimulus discussions is policy changes. There are some simple things that could move a whole lot of people from the cash/informal economy into the payroll economy, which would have good results all around.
For example, Social Security has been limping towards implementing its Ticket to Work program for more than a decade now, but SS disability recipients are still mostly stuck in a crazy system where if they earn more than a minimal amount of money, they're disqualified for SS and kicked off the rolls. Talk about counterproductive -- IMO it's much better to have people actually working, even if they earn a whopping $20,000 a year. They need to stay on SS for the healthcare benefits, but why put such a low cap on earnings?
Same goes with a number of immigration statuses. People wait months and sometimes years in limbo to obtain employment authorization, during which they're either not working at all or working in the cash economy. There is no reason not to grant prompt temporary work authorization to give them access to payroll jobs. Again, win-win for individuals (who are now paying into the SS system) and municipal/state/federal tax coffers.
Taken together this stuff will still be a tiny, tiny drop in the bucket, and of course it doesn't do any good for people to be authorized to work if there aren't any jobs available. But it still surprises me how energy is put behind keeping people OUT of the workforce. The assumption of bad faith is really mindblowing. You wonder how civil servants can get through the day, if their default assumption is that everybody is a cheat and a lowlife.
Re:Short term costs, long term benefits
The longer and more sustained, the better.
We worry way too much about inflation, especially now, in a deflationary economy.
"you can spend the money and then stop when the recession is over."
This is precisely one of the big differences between New Keynesians and Post-Keynesians. A temporary stimulus, either monetary or fiscal, will be not be very stimulative, nor stabilizing.
It's about expectations. The backhoe operator who is building a bridge and then getting laidoff in six months versus the one who lnows she will be building the Interstate Highway System for forty years. The former will save her money for the rainy days; the latter will take out a mortgage on a house.
The post is excellent, by the way.
If Obama doesn't use this opportunity to rebuild all the programs the Republicans have cut for thirty years he will indeed be a very bad President.
Can we have some more FDA and NIH and SEC personnell, currently all worfully understaffed? Jeez.
28: Bummer. No more masturbating to Famous Neurological Patient H.M.
Someone or other at some place on the internets pointed out that the stimulus package disproportionately creates jobs that have been traditionally filled by men.
My engineer friend and I have been thinking that it would be an interesting design problem to assume that hand labor would be building a lot of this infrastructure, and design pieces accordingly. The big machines are labor savors, but we don't want to trade gas consumption for labor right now.
back in the glory days of light rail, you could go from NY to Chicago by trolley (not that you would, but that it was possible)
Another unsourced story:
back in the glory days of the American Chestnut, a squirrel could go from Florida to Canada purely on the limbs of chestnuts.
Dunno if I believe that one, but I like it.
Oh, that was something else I was thinking of in terms of labor intensive stimulus projects.
How many people with pruning shears and herbicide would it take to, e.g., wipe out kudzu? I don't have the knowledge to know exactly what sort of ecological restoration you'd want to do with an arbitrarily large labor force, but I bet there's something.
Everytime I hear someone say "but what about inflation!!1!1" I want to punch somebody. It's always some variant of "but we'll end up with hyperinflation, like in Germany, which led to Hitler". Apparently there are only two years in German history -- the Year Before Hitler, and the Year of Munich.
The 70s did lead to Reagan, so they do have a point there.
34: I thought when you cut a single kudzu vine, two more immediately grew in its place, so no amount of labor could defeat it.
33: Part of the theory behind the stimulus is that the actual impact is larger than just what the government does. This is the "Keynesian multiplier".
36: You need to hold it over your head, so it can't draw strength from the earth. Come to think of it, that was Atlas, not the Hydra. I don't remember how you kill a Hydra.
disproportionately creates jobs that have been traditionally filled by men.
This is part of what I was thinking of in the post. The building trades are great, but what about some love for some better integrated or female dominated areas like health care and social services.
The 70s did lead to Reagan
Would that be the universally beloved Reagan of the turn of the Century, or the reviled Reagan of the 80's? If Bush gets half the rehab Reagan got, he will be remembered as Harry Truman (who was also reviled as he left office).
I'm guessing Reagan is about to undergo considerable dehabbing over the next few years. Chou En-Lai's quote about the French Revolution -- it's too soon to tell -- applies to all historical events and personages.
universally beloved Reagan of the turn of the Century
Universally beloved, my ass.
I don't remember how you kill a Hydra.
Cauterize the stumps with the help of a NPC. You really should have played more D&D.
http://en.wikipedia.org/wiki/Lernaean_Hydra
Universally beloved, my ass
I thought it was Heebie's ass that was universally beloved, Rob, not your's.
If Bush gets half the rehab Reagan got, he will be remembered as Harry Truman
If Bush gets half of what he deserves, it'll bring Reagan down too.
win-win.
they're a little bricks-and-mortar heavy
I would say that they've got the brick-and-mortar thing about right.
I'm trying to figure out right now if/how I can get myself a piece of that sweet, sweet Obama building-greening money. Somebody in DC remind Obama that spending money without professionallicensed direction is wasteful.
38:
You're confusing Atlas with Antaeus, LB.
How many people with pruning shears and herbicide would it take to, e.g., wipe out kudzu? I don't have the knowledge to know exactly what sort of ecological restoration you'd want to do with an arbitrarily large labor force, but I bet there's something.
Aw man, I would love this so much. There is so much stuff that needs to be done that everyone just accepts as impossible because it would take so much labor.
To free up water, you could eradicate tamarisk in the desert west and arundo in the mediterranean west.
The Sierras more or less need to be handthinned of dense undergrowth. Logging doesn't count, because the spindly trees that act like ladder fuels and make huge hot fires aren't economically valuable. Fire will take care of this by itself, but it'll take the old trees too. And leave the soil unanchored.
There is actually talk these days about restoring the native grasses in CA, because they have longer roots that create channels in the soil and increase the infiltration rate and when we get rain instead of snow in three decades, we're going to need every incremental advantage to keep the rain from flooding and leaving our system.
I personally would like to see teams designed to tear down and salvage abandoned places, because I am super interested in intentional retreat.
If you need to put people to work, I HAVE SUGGESTIONS, Pres-elect Obama. I can make work for as many people as you'll give me.
People in other places may have other needs as well.
48: We haven't hit 20% unemployment. Yet.
38, 43: for alternate methods of Hydra disposal see this and this.
48: See, you know stuff like this, and you have a blog. Clever ideas, with estimated manpower needs!! We'll link, adding literally dozens of readers for your ideas!!
LB, thanks so much, hon. I'll call on you very soon, when I unveil a SECRET PROJECT that I am working on. A project that is not yet ready but will one day need dozens of readers.
I sent you email, LB, to your unfogged address.
Some Insider Info on the stimulus package, a comment at Yves Smith
As for the infrastructure stimulus package, I'm in the road industry and we've been told the money will be earmarked for projects that can be put to work quickly. That would be things like resurfacing, safety, intersection improvement projects, maybe larger projects if they are "ready to go" and were shelved for lack of funding.If a project will take a year or more to go to construction, it won't be eligible. That right there would eliminate most major projects but a lot of bridge replacement projects might get funded quickly.
The post & comments are worth reading. Car dealerships are toast, and car dealerships provide 25% of advertising revenue to local TV.
JM Keynes said we need a magneto (starting motor). Keynes did not say jumper cables. The stimulus has to be a permanent change in the economic structure.
What I am getting from the econblogs is a sense of how bad it is going to get, and a false optimism that with a kickstart, we can have it all back the way it was before. For better or worse, what we will look like in ten years, in base socio-economic relations, will be as different from a year ago as 1925 was from 1945.
Obama & crew apparently just don't get it.
Sirota at OpenLeft says Obama may just be trying to hand out a ton of quick pork to build his political base. Stuff a suspension of sales-tax and payroll tax is in the air. Then, with a grateful electorate in 2010-11 go for the radical.
I don't think it will work, although I don't know the politics. Hand me a check for $5000 I will give some to creditors, put a little into the house, and bank the rest because I am still scared witless.
Hoover tried a lot of short-term stimulus, including trying to keep wages up. It wasn't the money FDR spent that made the difference, it was the radical committment to restructuring the economy. I doubt that shows up in the numbers of economic history.
I'm skeptical of the 'ready to go' metric.
The prelude to actual construction provides for middle class jobs doing all the planning, engineering feasibility, marketing and public relations.
If Obamastructure can air condition the subway platforms, I'll consider supporting a third term.
Uh oh. LB, look at who is in your head stealing your ideas.
they're a little bricks-and-mortar heavy
All new construction should be e-construction in cyberspace.
At the insane rate of job loss, Obama's promise of 2.5 million new jobs within the next two years will disappear in eight months or so. It's not a New Deal we're looking at.
58: Heh. Is anyone really surprised?
So, apparently Patrick Fitzgerald is going to be busy in Chicago fighting corruption.
So, if the Governor doesn't appoint the Senator, will they call a special election?
Best sentence from that article: Mr Blagojevich took the chief executive's office in 2003 as a reformer and anti-corruption candidate.
Well done Pat Fitzgerald, and good for Illinois, remaining true to its insane and corrupt political roots.
Now let's see if Blagojevich can achieve a negative approval rating...I think he's been around 8% for the past year.
Too bad this didn't happen AFTER he named Sheikh Mohammed bin Rashid Al Maktoum the new Senator from Illinois.
So, if the Governor doesn't appoint the Senator, will they call a special election?
This is a really great question!
Is there a stupidity count?
IMHE, the element of stupidity is implicit in nearly every criminal indictment.
I don't know the legal details, but wouldn't the Governor resign in favor of the Lieutenant Governor, and then the new guy can appoint a Senator?
JM Keynes said we need a magneto (starting motor).
For the past year, just about, I've been mystified by a graffitti-sticker that's popped up all around my neighborhood. "We [heart] Magneto!" it says. I've assumed it was an x-men reference, if a cryptic one, but now I've another line of inquiry to pursue!
Some of us are already starting to push the social services stuff in the original post, as well as other social services suggestions, it is a very good idea and a needed corrective to the weird construction emphasis in the opening discussions.
But suggestions like taking a few million people to thin kudzu make me afraid....
Bob, if you started a blog that just consisted of linking to the non-stupid comments on econ blogs, you would be a national hero. I can't bring myself to read them anymore to pick out the good stuff. The discussion today at Yves' place where a bunch of ignoramuses stroke their chins and discuss how the financial crisis is the fault of too much banking regulation has broken my will to go on.
Not thin kudzu, eradicate it! And drive nutria to extinction (I think they're an exotic pest, right?) And plant seedlings of blight-resistant American Chestnuts throughout our national and state parks (or, at least, whereever they're appropriate.) And hand-rearing millions of genetically engineered passenger pigeons for release into the wild! And sharks with fricking laser beams!
Aw, I like the nutria. And the elephant ears along the banks of the river.
I like nutria too. They remind me of muskrats, which seem to have gone extinct around here.
Moose are going extinct in MN too. Soon I'll be losing my quasi-Canuck cred. The moose that was seen around here probably was in distress.
The moose that was seen around here probably was in distress.
I knew a guy who joined the Moose Lodge for cheap beer, who taught me the "Moose in Distress" hand signal. If you, as a member of the Loyal Order of Moose (or whatever it's actually called), place your thumbs on your temples and waggle your splayed hands alternately forwards and back, other Moose are supposed to come to your aid.
Was the moose you knew of doing that?
I think the guy was teasing you, LB.
Could have been a put on, but it was mixed in with enough other plausible sounding Moose Lodge facts (at some specified time in the evening, wherever you are, you're supposed to rise, place your hand over your heart, and face Mooseheart, MA) that I bought it. Not that anyone's ever used the Moose in Distress signal in real life, but that it's a part of official Moose lore.
Actually, it appears to be Mooseheart, IL.
Texas A&M prides itself on having a kabillion rules in that style. Like, the dog-mascot (Revelry) is escorted by a student at all times. If Revelry barks during class, class is dismissed. If Revelry gets on your bed, you sleep on the floor. If Revelery is coming, you step off the sidewalk. And on and on, for every aspect of life.
Before your freshman year, there's a weekend camp where you learn all the rules. And "two-percenters" are called as such because those are the students and their percentage who don't participate in the infinite rules.
I really think someone should make a documentary about that place.
I had the name wrong. It's Reveille. This link clarifies, along with the awesome line from the history of the mascot:
"The next morning, when "Reveille" was blown by a bugler, she started barking. She was named after this morning wakeup call."
Not thin kudzu, eradicate it!
It's like nobody listens to the archives (track 10).
We should also eliminate mosquitoes. By hand!
With tweezers!
But seriously, it seems at least possible that there will be at some point a situation where there's stimulus money to spend and high unemployment, but we've run out of practical infrastructure projects. At which point it would make sense to have a wishlist of madly low-skilled labor intensive projects ready to go, no?
Moose in Distress signal
One of the big black fraternities at UNC, the Omegas, has a distress call that is definitely not fake. I was downstairs at a bar once and heard the bark come from the upstairs, where I guess a fight was in danger of breaking out. It was like an alarm going off in a fire station, except they were racing up stairs instead of sliding down a pole. I'd never seen a bunch of guys move faster outside of a track event.
Japanese Knotweed is the Kudzu of Pennsylvania.
At which point it would make sense to have a wishlist of madly low-skilled labor intensive projects ready to go, no?
Possibly, but it is interesting to me how much this sounds like the Cultural Revolution millions of people picking up rocks out of fields stuff. (Understanding the difference in motivational tools used to get folks to participate.)
100% guaranteed insect killer. Place insect between wooden blocks. Bring together rapidly.
the Cultural Revolution millions of people picking up rocks out of fields stuff. (Understanding the difference in motivational tools used to get folks to participate.)
Well, yeah. Like, offering unemployed people a reasonable paycheck.
86: Actually, I am pretty much with you on this one. An interesting feature of my youth was having my mom's parents, aunts and uncles (but not my mom nor her sibs) be utter FDR haters, who would rail endlessly about workers leaning on shovels etc. 25 years after the fact, in juxtaposition with our continual use of parks and trails and picnic shelters and local stadium etc. which were built by the WPA or the CCC.
Like, offering unemployed people a reasonable paycheck.
But the welfare moms!!! If unemployment is a reasonable paycheck, then they don't have an incentive to go back to work. We want them to suffer slightly and then suffer more the longer they stay out of work. If a couple of kids starve, then so be it. They should not be having kids if they cannot have a job. Silly LB.
The nice thing about biological projects is the time factor. For a lot of the invasives, they're in the growth/expansion phase. Intervention now is better than letting the job get bigger. Also, there are time benefits to having the re-established native landscape. While those are growing, they'll be more active carbon sponges.
The other nice thing about biology-based projects is that the eradication ones have delivery mechanisms. The California Conservation Corps has tons of expertise in vegetation management (lots of fire and flood skills, too. They're freakin' magic with the sandbags.). They could add and train staff. Every Resource Conservation District (formerly the Soil Conservation Service) in California would love to do arundo eradication. They're geographically dispersed, government agencies with existing hiring policies, a way to spread jobs in rural populations, and getting rid of arundo is a rare source of wet water in CA. This could be ready to go within months.
Seriously, PGD. The biology based jobs aren't trivial and could address a real problem. They weren't in the New Deal, because people weren't thinking about invasives in the New Deal. But surely we don't have to follow the same template exactly. The biggest problem I see is that they won't soak up enough labor, unless you pick the crazy ideas, like re-vegetating the native grasses in CA. (In which case, time is also valuable, because you should get people growing seed ASAP.)
F'reals, I get that this is weird new ground. But would you like a quick position paper on it? Two pages or something? I could write that pretty quickly and you would never have to tell anyone you got it through the website where you talk about your sex life. You could be the one that had that daring new idea which is self-evident when you think about it.
So why would it be better to be indicted as a senator than to be indicted as a governor?
Whenever I see Megan's name, I want a piece of pie.
90: I dunno, but that was some absolutely astonishing news this morning.
Megan, the fire prevention stuff sounds good. I will email you.
Blajogovitch looks like he should be governor of Hobbiton, not Illinois.
Email me at work, 'k? I can't get to my web-based email during the day.
firstinitiallastname@ the suffix for my whole department.
95: Remember kids, good hair can get you a long way in life.
94: Okay, is it possible that the chatter on this ridiculous blog is actually generating some RL policy input? I'm kvelling.
at least possible that there will be at some point a situation where there's stimulus money to spend
and high unemployment, but we've run out of practical infrastructure projects.
No. Transit projects alone (Supertrains !) could (and should) consume the stimulus. If the
objective was just labor intensive employment with low environmental impact, the solution could be
grants for poets (and bloggers).
All these kudzu-trimming with shears notions gives me dreadful images of a post retirement brush-clearer-in-chief roll for W.
Mostly for Megan: do see Van Jones Green Economy via unfogged.
post retirement brush-clearer-in-chief roll for W
It was just a prop. He's going back to Dallas.
Update on 99:
http://www.usnews.com/blogs/fresh-greens/2009/3/10/obama-drafts-van-jones-as-green-jobs-adviser.html
