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Renegade
01-05-2009, 09:10 AM
Jan 5 05:01 AM US/Eastern
By ANDREW TAYLOR

WASHINGTON (AP) - Washington bureaucrats have a reputation for being able to spend taxpayer money real fast. But, believe it or not, spending it fast enough is one of the biggest tasks President-elect Barack Obama's economic team faces in putting together an economic recovery measure.

Obama's economic recovery plan depends on swiftly pumping hundreds of billions of federal dollars into the economy to create jobs. The focus is on tax cuts and government spending that can provide an immediate lift to the economy.

However, the $675 billion-$775 billion plan emerging in talks between Obama's team and Democratic allies in Congress also appears to contain lots of money that won't be spent for years—like for water projects, rebuilding the electric grid and buying billions of dollars of computers and software for the health care sector. Much of that money won't get spent until the economy starts growing again.

Some GOP critics say Democrats are simply using the current economic crisis to put money into long-term projects now, rather than in a few years when concerns about record budget deficits might threaten the spending.

"We must ... make distinctions between what is 'stimulus' ... and what is merely more government spending on favored projects we don't need with money we don't have," said Senate Minority Leader Mitch McConnell of Kentucky.

One example is a plan to spend billions of dollars on a new health care information technology system that would make the delivery of health care safer, more effective and more efficient.

During the campaign, Obama promised $50 billion over five years for the initiative. The upcoming economic recovery bill will provide less.

Even so, little of the program can get underway quickly and building the system is years away. Basic questions like privacy rights and a design that would allow computers for doctors, hospitals and insurance companies interact have yet to be resolved.

Even Obama's economic advisers have warned privately that as the stimulus bill increases in size, its quality inevitably declines. The economy can absorb only so much public investment over the next two years. Republicans are even more skeptical.

"It's incredibly difficult to identify things that are valuable in the long run, can be financed in the short run and get the money out the door quickly," said former Congressional Budget Office Director Douglas Holtz-Eakin, who advised Sen. John McCain's presidential campaign. "It would be preferable to take any stimulus you feel is necessary and target it on a few things—don't spread it as seed money for a thousand programs that'll never stop growing."

"Right now, we have an emergency on our hands," counters House Appropriations Committee Chairman David Obey, D-Wis. "If the House is burning, you're not going to worry about which hose you grab, so long as you get water on the fire."

Obama officials promise a "use it or lose it" rule to force states and localities to spend new federal money quickly to stimulate jobs. Such an approach could prompt officials to choose more wasteful projects that can be built soon over better ideas that might take a while.

"There's a tension here between wanting to do the most meritorious projects for the long term and wanting to do stuff that boosts the economy quickly," said budget expert Bob Greenstein of the liberal Center on Budget and Policy Priorities.

Many parts of Obama's plan would infuse money quickly into the economy, according to budget experts. These include $200 billion for recession-hit state governments to avoid layoffs, cutbacks in services and raising their own taxes. Federal tax cuts delivered by withholding less from paychecks can take effect almost immediately. Expanded food stamp and unemployment benefits would arrive mostly in 2009.

All of those ideas are poised to get funding—lots of it. But many economists say even more must be pumped into the economy to jolt it out of its doldrums.

That means massive spending on infrastructure projects such as road and bridge repairs, flood control and sewer systems, upgrading schools and public housing, and new runways and other airport improvements. Those projects typically take years. Depending on the length of the recession, much of the spending may not occur until after the economy is expanding. That could result in inflation, economists warn.

A Congressional Budget Office analysis of a $61 billion economic stimulus measure that passed the House in September—only to fail in the Senate—shows that just 27 percent of the plan's $37 billion in infrastructure spending would have occurred as the economy struggles through 2009. Another third would have been spent in 2010 and the final third wouldn't have been spent until 2011 and after.

And those were projects that lawmakers say are ready to go right now. House Transportation and Infrastructure Committee Chairman James Oberstar recently unveiled a $45 billion spending plan for highways, mass transit, water projects and airport improvements. More than that wouldn't create many jobs right away, he cautioned.

"If we're going to have a quick hit—get in, create jobs within 90 days, people working—then there is a finite list of projects that fall into the category," Oberstar, D-Minn., said recently. "So we have to be very careful about how much we grow the list."

Obama and allies like House Speaker Nancy Pelosi, D-Calif., stress that much of the economic recovery plan will have a longer-term focus. Such elements include delivering broadband communications to underserved areas, developing and improving energy efficiency technologies, updating the nation's electrical grid and modernizing schools.

"This is not a 1930s public works project," Pelosi says.

Nonetheless, there's a lot of focus on pushing money out on dams and highway projects already underway and, up until now, financed in bits and pieces.

"There's a huge backlog of demands out there on a number of different fronts," an Obama transition official said. The "real challenge is to make sure money isn't spent willy-nilly," the official said, speaking on condition of anonymity because he was not authorized to speak with the reporters.
http://www.breitbart.com/article.php?id=D95GSQLO0&show_article=1&catnum=3

Michael
01-05-2009, 09:48 AM
It would help if Obama's team to clearly state their concept of economic recovery. It sounds like they are saying creating large numbers of JOBS will move the nation in the direction of recovery. Public work programs to strengthen infrastructure sounds like the New Deal. The New Deal didn't get us out of the Great Depression, WWII did - large scale industrialization and employment of Americans in the military and in the factories equipping the military.

Many people seem to be missing the point of our current economic collapse. EVERYONE world wide was willing to try to make money on money investments and ignore the loan sharking, the bubbles and the risks. EVERYONE was involved in toxic loans. We need more than a reboot of the same type of economy bases on making money on money. America needs to shift back to what got us out of the last Great Depression and re industrialize instead of outsourcing industry.

It is discouraging to see so much federal money being spent while we push the national debt toward 11 trillion dollars and not have a clear concept of recovery presented by either Republicans or Democrats. Republicans were going by the concept of getting money out into circulation in buying and selling and unfreezing the loan market. There was no real accountability with their bail out and the same money grubbing CEOs and executive teams turned around and starting spending in the same old, same old direction (a big part of what got us in trouble) executive bonuses.

BirdGuano
01-05-2009, 04:49 PM
It would help if Obama's team to clearly state their concept of economic recovery.

Absolutely 100% agree.

So far all I've seen is ready-fire-aim out of both the outgoing and incoming administrations.

No clear policy statement to date, except to "do something big and do it quickly".

But from what I HAVE seen, it appears to be more of a stop-loss than an actual recovery plan.

usda
01-06-2009, 01:05 AM
Public work programs to strengthen infrastructure sounds like the New Deal. The New Deal didn't get us out of the Great Depression, WWII did - large scale industrialization and employment of Americans in the military and in the factories equipping the military.
Well, we dearly need the infrastructure fix...whether it gets us out of the depression or not. As far as war is concerned...I am sure, that can be arranged soon enough.

Really though, I do not expect us or anybody else to get 'OUT OF THIS' and go on as before. This world cycle is spent...what comes next most certainly will not be more of the same.

Try investing in some type of Religious experience...that will probably be the next 'bubble' and last far beyond our life times.

The 'Economic' world has spent itself...Bernard Maddox is symbolic of that. The world of thieves and cutthroats is going, going, gone. The new world will be filled with repentants and portents of alien invasions...which will be reintegration of our sub conscious selves and the astral plane. Magicians and Priest will be the next big job market opportunity.

:beer: & :kinky: 'but true!'

usda
01-06-2009, 01:09 AM
So far all I've seen is ready-fire-aim out of both the outgoing and incoming administrations.

No clear policy statement to date, except to "do something big and do it quickly".

But from what I HAVE seen, it appears to be more of a stop-loss than an actual recovery plan. BG

It is the 'blunder buss' approach, smooth barrel, lots of powder and tacks and nails and no rifling...just ignite it and hope it hits its target!

dreadstalker
01-06-2009, 01:37 AM
Nothing left to spend. Anything more and they are just making money out of thin air. Though truth be known they are already doing that. The dropping value of the dollar on the world stage should have given them a clue by now.

Coyote
01-06-2009, 11:58 AM
Well, we dearly need the infrastructure fix...whether it gets us out of the depression or not.
We certainly do. It's good that the feds will be putting some money into this.

Really though, I do not expect us or anybody else to get 'OUT OF THIS' and go on as before. This world cycle is spent...what comes next most certainly will not be more of the same.
I wish I could be that optimistic. I think this bailout/recovery project is designed to get us back to the status quo. Every business and most individuals just want to go back to the days of easy credit and wealth without work.

Gettin' your money for nothing and your chicks for free is just to much temptation. We will have to *truly* bankrupt ourselves two or three times before any real changes will be made.

leistb
01-06-2009, 12:17 PM
We will have to *truly* bankrupt ourselves two or three times before any real changes will be made.

It depends on how the bankruptcy comes about. If it's brutal enough and it certainly appears as though the Fed is doing all it can to insure it will be, once will be enough. A collapse of the economic system has too many political and social ramifications for it not to be.

Coyote
01-06-2009, 12:44 PM
A collapse of the economic system has too many political and social ramifications for it not to be.
The whole bailout/recovery exercise is to ensure that the ramifications aren't that bad. We'll do this a time or two more. Free money is irresistible.

Johnny
01-06-2009, 12:53 PM
We certainly do. It's good that the feds will be putting some money into this.


I wish I could be that optimistic. I think this bailout/recovery project is designed to get us back to the status quo. Every business and most individuals just want to go back to the days of easy credit and wealth without work.

Gettin' your money for nothing and your chicks for free is just to much temptation. We will have to *truly* bankrupt ourselves two or three times before any real changes will be made.

Only revoulution will change it.

leistb
01-06-2009, 12:55 PM
The whole bailout/recovery exercise is to ensure that the ramifications aren't that bad. We'll do this a time or two more. Free money is irresistible.

Understood. However, I'm drawing a distinction between a bailout/recovery exercise and an actual bankruptcy. We will/already have had many bailouts but I believe we'll only need one bankruptcy for the whole house of cards to tumble mightily.

BirdGuano
01-06-2009, 01:11 PM
Infrastructure spend has to be on the correct TYPE of infrastructure.

Spending on 1950's-era roads and bridges, to maintain the status quo and "fight the last war", isn't in our national interest.

We need to be more like Asia and leapfrog entire technologies in the rebuilding, instead of pissing money down a rat hole on last century's infrastructure.

Massive rail electrification, solving the "last mile" delivery problems. Widespread broadband installation, improving the electricity infrastructure with distributed systems, and promoting community infrastructure resilience.

Instead we'll build/repair bridges to nowhere that promote giving $700 billion/year to the Saudi's so they can use it to eventually try to kill us.

Insanity...

AndreaCA
01-07-2009, 05:17 PM
Can't speak on an international or even a national level, but I have several decades of experience on a personal level and you know what really works?

LIVING WITHIN YOUR MEANS!

And if we insist on the ridiculous amount of social programs that we currently have, then may I suggest:


LIVING BELOW OUR MEANS!

(Okay, rant over. Andrea creeps back to her modest kitchen in her modest home to rinse out ziploc bags for reuse in DD's brown bag lunch for tomorrow . . .)