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Posts Tagged ‘Infrastructure

Federal and State Deficits – Out of Sync

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this 17 carat gold railroad spike was pounded into the ground by Leland Stanford at Promontory Point, Utah on May 10, 1869, to commemorate the joining of the Union Pacific and Central Pacific Railroads to complete the first Transcontinental Railroad.

This 17 carat gold railroad spike was pounded into the ground by Leland Stanford at Promontory Point, Utah on May 10, 1869, to commemorate the joining of the Union Pacific and Central Pacific Railroads to complete the first Transcontinental Railroad.

America was built on Infrastructure. Take the Railroad Era, for example. Infrastructure represents a short term economic boost and long term economic investment. Just ask your average railroad baron. So If you agree that infrastructure spending is a keystone of economic recovery in the United States, then you’re likely to agree that, a) both the Federal and State Governments are critical to infrastructure spending, and b) that concerns about the deficits have to take a back seat to economic recovery.

That is clearly already true about the Federal Deficit. We’re going to hit a trillion a year pretty soon, and we’re going to be spending way more. The economy is so bad, and deflation such a risk, that printing money seems like a very attractive option. Sheets of the stuff will be churned out. The Mint will be working overtime.

But what about the states? Many States are constitutionally mandated to balance their budgets, including California. And none of them print their own money. States have to raise money from taxes, borrow it, or sell bonds to finance themselves. The first of these is a nasty option politically, especially during an economic squeeze, the second is tough sledding, and the third is deeply unattractive for investors. Which leaves the States in a terrific crisis. Among the many things that suffer are – guess what, infrastructure projects, the very lifeblood of the Keynesian (boy, is he back with a vengeance) recovery.

Problem? Uhh, yeah. Read the rest of this entry »

Why Did Obama Bypass Robert Reich?

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what am i, chopped liver?

what am i, chopped liver?

Of all the cabinet choices that Obama didn’t make, there are a few that really stick out. Not choosing Bill Richardson at State after he had switched loyalties from the Clinton camp early in the game and delivered a big jolt of legitimacy to the Obama team is one, but at least he got a job – if not the one he wanted. The big and potentially most worrying missing name from Obama’s line-up is Robert Reich. Now, it’s very possible that Reich said he wasn’t interested, that he preferred being an academic and a commentator, but it’s also possible he was left out in the cold.

If the latter is indeed true, it would be a very worrying sign for the economic path Obama is likely to take. Reich is the most reasonable, sensible, honest, straightforward and intelligent guy who wasn’t chosen to steer the economy. He knows the mistakes that were made, he saw them coming a mile off, and unlike Tim Geithner, he has no role whatsoever in the disaster that has befallen us. His only ‘crime’ maybe that he is seen as too ‘progressive’, and might ‘scare Wall Street’ (not that Wall Street’s opinion is worth a bucket of spit). Read the rest of this entry »

700 Billion is the New $7 billion

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viaducdemillau

a brand new bridge. this one's in france

Things are turned way around when Liberals are agreeing with quirky, flat-tax Steve Forbes, but when called Hank Paulson the “worst Treasury Secretary in living memory” there are few diehard progressives that would disagree.

But old Hank has at least done us one big, big favor. By steamrolling through the TARP at a cost of $700 billion and then doing precisely squat with it, he turned $700 billion into the new $7 billion. Suddenly, with the exception of the bailout for the once mighty now hopeless auto industry, fears of excessive spending seems petty next to the cost of TARP, the Citigroup, AIG, and Fannie and Freddie bailouts. We’re awash in borrowed money, and nobody seems to care. Another day, another dollar, or a hundred billion of them. Whatev.

So when Obama announced his massive public works program (let’s call it the New New Deal or NND) and didn’t even bother to mention a pricetag, the only Cassandra was the ever-predictable American Enterprise Institute. With the economy losing half a million jobs a month, the American people are ready for it. So don’t expect the whining from Club for Growth knuckle-draggers in Congress to be anything more than mumbled griping at worst. Read the rest of this entry »

Written by coolrebel

December 6, 2008 at 2:02 pm