Economic Stimulus Package

The House passed their version of the economic stimulus package today. And, of course, the Senate wants to change it. Both are in the 145 to 160 billion dollar range.

The money has to come from somewhere, and it’s going to add to our deficit and ultimately our national debt. As of today, the CBO (Congressional Budget Office) puts the 2007 deficit at $163 billion and the projected 2008 deficit at $219 billion, and that’s not including this stimulus package. As for the national debt, the CBO currently pegs it at 5 trillion dollars.

Let’s assume for the sake of argument that implementing this stimulus package is a good idea. I honestly don’t know. Put two economists in a room and you’ll probably wind up with three different opinions. But let’s assume it’s a good idea.

Rather than send this money to individuals in the form of checks, why don’t we spend this $150 billion, or at least a large portion of it, on our infrastructure: our roads, and bridges, and tunnels, and levees, and ports, and railroads, and airports? Not many people would argue against the fact that our infrastructure is literally falling apart in many parts of our country. Certainly Hurricane Katrina and the Minnesota Bridge Collapse are two excellent examples of what can happen when various parts of our infrastructure are allowed to decay. There are probably hundreds of similar disasters waiting to happen.

Given that, to replace that one bridge in Minnesota is going to cost over $200 million and the upgrade to our air traffic control system is going to cost at least $1 billion, $150 billion is just a drop in the bucket when you look at the big picture of what needs fixing. But it usually costs a lot less to fix something before it breaks than it does to replace it after it’s gone. Nevertheless, $150 billion won’t cover everything, but it’s a pretty good start.

And there’s no doubt it would stimulate the economy by adding hundreds of thousands of jobs to the nation’s work force. So it helps solve two problems: (1) providing an economic stimulus; and (2) putting us on the road, so to speak, to fixing some of our more serious infrastructure problems. And even if, in hindsight, it turns out that (1) wasn’t actually needed, (2) is something we can all benefit from for decades to come.