How would you stimulate the economy?
Those of us who live in the United States probably have or will soon receive a check from the U.S. Treasury, issued as part of the government's economic stimulus act. I expect mine any day now, but I haven't decided how to use it, so I ask you, our wise, worldly and experienced Plant Services readers – what do you think I should do with it?
How can we spend our stimulus checks in a way that will do the most for our economy?
What other ways to improve the economy would you recommend?
The idea here is to spend it in a way that grows the economy. Should I roll the dice with some stock in an established company or try to support an emerging technology? And in what field?
How about clean energy? A recent report, "Job Opportunities for the Green Economy," says that getting away from the "dirty, fossil-fuel-based economy" would lead to millions of new jobs in manufacturing, unions and the building trades. Can anyone tell me how I could use my stimulus check to help make that happen?
I don't think I should spend it on an appliance or electronic gadget made in China, or splurge on fuel for a long car trip, and it would feel un-American to pay off debt or put it in the bank. Maybe I should get my wife a new front door for our house, made in the USA, finished and installed by starving local craftspeople, or replace some of our dead landscaping with plants from a local nursery. Why do some countries' economies grow and others don't?
A commission set up in part by the World Bank has been working on that question for a couple of years and recommends, among many other things, heavy investment in infrastructure. Economics professor Burton Malkiel notes that China's economy has grown 9% to 10% annually for 25 years and credits the country's investments in education and infrastructure.
There's no doubt that how our government spends our money (or in the case of this stimulus, our children's and grandchildren's money) has a profound effect on the economy. "But the tiny checks the Treasury just sent out are barely enough to pay our rising fuel bills. We need a stimulus package that’s truly up to the job of restoring aggregate demand," says Robert Reich in his May 23 commentary on National Public Radio (http://www.plantservices.com/articles/2008/099.html). Reich teaches public policy at the University of California,
Berkeley. His latest book is titled "Supercapitalism." "The best and easiest candidate is spending on the nation’s crumbling infrastructure. We’ve deferred billions of dollars of maintenance on bridges, sewers, water systems, levees and dams. That’s already cost the nation dearly," he says. Reich says the public doesn't trust the government to spend money on infrastructure wisely when earmarks go to "bridges to nowhere." So he suggests the next president establish a capital budget that lists infrastructure projects in priority order. "No more earmarks," he says. "The capital budget will reflect the nation’s true infrastructure needs."
The government would fund the capital budget "the way capital budgets should be funded – through borrowing that assumes a realistic return to those capital investments, just like any smart business does," Reich adds. "That way, we keep the economy growing, create millions of jobs, and we get the infrastructure we need for the 21st century." What do you think of that? And seriously, how would you spend a stimulus check or otherwise help improve the U.S. economy?