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New Stimulus Needs One Big Project

by: Bill Egnor AKA Something The Dog Said

Fri Sep 03, 2010 at 06:01:07 AM MST


Complexity is really only attractive to nerds. I say this as someone who loves complex systems and way they interact. Given the choice most folks would rather have a description boiled down to the barest of truths and then they go from there in thinking about it. This is part of the problem with the public perception of American Recovery Act, more commonly known as the stimulus bill.

It is widely held by economists and those who don't rely on Faux News and Rush Limbaugh for their information that the stimulus worked very well, for its size. Even as it was being passed 19 months ago many were saying it was too small in its scope to completely fix the hole in the economy that the policies of radical Republicans had caused. This was a win/win situation for the Republicans as they would be able to reap the benefits in their districts and states, but still be able to say that it was bad policy since it did not bring the nation back to full recovery.  

Bill Egnor AKA Something The Dog Said :: New Stimulus Needs One Big Project

The effectiveness of this gambit was aided in the fact that there was no single major project or even groups of projects that Americans could see and be inspired by. We had no massive long term projects like those of the New Deal to hang the hat of low information voters on. We had no Rural Electrification program, no Conservation Corps that could put people to work and see real results.

It is not that an overarching project would have put money into the economy faster. In fact anything short of direct hiring by the Federal Government really would not do that. Still to have a project that could inspire, that could be pointed to as Americans coming together in a time of trouble would have made it much easier for everyone to accept that the money being spent was having a positive impact.

It is not too late for such a measure. While there is a lot of political weakness in the Democrats in Congress (really that should be in the Senate, the House has done yeoman's work these last two years) a big idea is something that Americans can't resist. The good news is there is a big idea that can be polished up and really invested in. National High Speed Rail.

About 1% of the American Recovery Act was allocated for high speed rail. The problem is that the 8 billion is a drop in the bucket compared to the estimated 500 billion needed to establish a full scale high speed rail system. It focuses on too much on passenger transport and not enough on cargo transport. This small amount of money also means that it is a state by state or at best regional issue not a national one that can inspire people and produce decades of good jobs.

Major national projects like this do not really pay fast dividends when we are talking about economic stimulus. Still they do set the stage for economic growth long term and can serve as point of pride to unite the people. It took a total of 50 years of investment to complete the Interstate Highway system. Those decades of construction required heavy equipment, materials and workers to do the actual building. It linked the nation in ways it had not been linked before. While there was an associated blight in terms of sprawl the initial idea was a good one that spread the wealth to every state in the nation.  

We need high speed freight and passenger service. The cost of continually moving freight over highways is just too high. The cost of maintaining the roads, the cost of fuel that can only be satisfied from foreign sources, the cost of lives from the inevitable accidents with 80,000 pound trucks, and the environmental cost of billions of gallons of fuel being burned daily are all too high to continue.

A national decades long initiative to bring high speed rail coast to coast is the kind of spending that the American people can get behind. It gives us a vision of the United States as nation on the move again, a nation that can still do great and impressive things. It also gives us the chance to revive the steel industry, the construction industry, the heavy equipment industry and the high tech heavy engineering industry. This kind of program would require the nation getting back to what made it great, the production of real things by real workers.

The follow on prosperity this kind of project would bring would do a lot to take the nation out of a service economy and put it back into a goods economy. This is where real prosperity lies, in having a nation where people can work, sometime really hard work, but solid honest work, and raise a family. Have opportunities that are not able to be outsourced to India or China and perhaps most importantly point to something tangible and say " I was part of making that real".

Politics is more than just good policy. There has to be a level of inspiration. Our opponents on the Right have found their inspiration in the dark and negative. We can combat this and win if we offer the American people a positive and concrete vision of the nation. That requires a big idea, a long term idea. It can be enormously complex in the details, but it has to be simple in its majesty. A nation wide system of high speed rail is such an idea.

This is what the President and the Democrats in Congress need to give the people. A project that says hope, that says we are a nation that is more than just its war making powers; a project that brings the imagination and dreams of Americans back to the possibilities of a nation like ours, and gives a chance to make it real.

This is the kind of thing that many of us were expecting when we heard the message of change from the Obama campaign. His election shows how hungry the country is for that kind of idea made real. It is time to make it real in sound of steel wheels on steel rails.

The floor is yours.

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High Speed Rail Good, but/and...
High Speed rail corridors are probably a more efficient way of allocating the funds. You want to pay attention to population density, potential revenue flows, and number of people who will be affected.

Add to that expansion of urban mass transit, which would provide a large amount of capital expenditures, i.e. stimulus. Long-term subsidy of tickets could come from fuel taxes. While gas taxes are regressive, if people have a cheap alternative, maybe families can drop one car of a two car family.

Japan has followed decades of large capital projects, including super-high-speed rail. Of course Japan's population centers are pretty dense.


There Are Several Regions Where High Speed Rail Makes Sense
  1. Boston-Washington
  2. Washington-Atlanta
  3. Boston, New York, Philadelphia, Washington-Chicago
  4. Chicago-New Orleans
  5. San Diego-Seattle
  6. Denver-St Louis-Chicago
  7. maybe some others

However, we need to understand that the existing rail beds, are insufficient for this use and would have to be either replaced or created new. The issue is not merely a case of building high speed engines and cars.   This lack of aqueduct rail bed is the reason that high speed rail in the Northeast US has not been a large success.



[ Parent ]
There Are Several Regions Where High Speed Rail Makes Sense
  1. Boston-Washington
  2. Washington-Atlanta
  3. Boston, New York, Philadelphia, Washington-Chicago
  4. Chicago-New Orleans
  5. San Diego-Seattle
  6. Denver-St Louis-Chicago
  7. maybe some others

However, we need to understand that the existing rail beds, are insufficient for this use and would have to be either replaced or created new. The issue is not merely a case of building high speed engines and cars.   This lack of aqueduct rail bed is the reason that high speed rail in the Northeast US has not been a large success.



[ Parent ]
Hear what you're saying
and fully agree with you.  However, we won't get the needed stimulus from this President.  More so that the type of President we elect, the important factors are who he assembles around him.  And the people Obama has in place are the obstacles to the needed stimulus and needed progressive reform this country desperately needs.  All the people in power are there for that purpose only: power.  They have it and they don't want us to have it.

Some good projects have been started.  Some foundations have been laid.  But they're too few in number and too weak in effect to make enough of a difference to move this country forward in the 21st century.

Obstructing those too few foundations are the psychotics in the other party who would much rather return this country to perhaps the late 1800s; perhaps the 1500s, when super-concentrations of wealth were the norm and the correct kind of people were masters of their little world.

I suppose the biggest problem I have is those in power today are aiding and abetting the right-wing extremists' agenda by limiting the amount of progress we make.

There is only so much we can do at the state and local level, as most of us realize.  We can make good progress locally, but the problems we face are too large in scale for local-level efforts to fix.  It appears to me that conditions will have to worsen even further before we take necessary steps.


Part of the Reason for Blocking Is Corporate Interest
The country has been on a tear to deconstruct manufacturing and on a program of placing services as the dominant employer. Those companies and organizations providing services will not see a change in direction as beneficial to their interest, and they have a lot of power, as the financial services industry has demonstrated.  

[ Parent ]
I'd vote for Major Health Care Reform
Single Payer is the idea that we get rid of the insurance companies in order to free up 33% of our health dollars. It would be interesting to track what people would do with that 33% savings.

Also, if health care were paid for by taxes, we would see a huge stimulus directed at small business, in particular any business with lower wage employees, startups, sole-proprietors, starving artists. Even big business would benefit, as it would lower the health care benefits from their employees allowing them to compete with Canada and other countries, plus it would remove the overload of health care expenses for retired.

I can't believe the stimulative effects of single payer health care hasn't been studied by smart economists. Most articles are narrower in their focus on the impact to consumers and health care services.

Is it any wonder that Canada has so many great musicians? You can actually afford to pursue an artistic career. Here, well don't lose that [ahem]starbucks[/ahem] job. (Yes, I know, big dawg.)


I Agree, the US Needs a Real "Making Things" Stimulus
Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy - and somehow still expect to prosper... . That idea was flat wrong. GE's Jeffrey Immelt.

The model of the Interstate Highway system is a good one.  Without it, our transportation system would look very different and our cost of goods to market very likely higher.

The capital investment of infrastructure is terribly important.  Consider

  1. that Mexico has a better telecommunications system at the retail level than the US because one of the requirements of Telemex's privatization was to upgrade the system, so a new fiber optic network was put into place around 1990.  It helped enable Mexico's manufacturers to compete in NAFTA and to attract some of the major automotive core technology transfers to that country.
  2. the water projects in the Western states, Bonnivile Power Administration and its dams on the Columbia River System and the Department of Reclamation and its work on the Colorado River both of which enabled wealthier regions from Boise to Portland and to Arizona.

Our country's infrastructure is aged and, like much of the formerly great American steel industry, worn out.  

  1. Because of the effects of deregulation, electric power transmission systems are not maintained and are aging.  We consumers will see this when there is a massive, multi-state blackout in the future.  Most of this form of infrastructure is more than 40 years old, controlled by 1960 period computer and instrumentation technology. This kind of infrastructure can be upgraded with federally guaranteed bonds sold by the power companies, thereby giving them a better asset base at a lower cost of capital. And it will permit larger scale, clean power generation where sensible.
  2. Of the country's nearly 600,000 bridges, 26% were found structurally deficient or "functionally obsolete" in a 2006 U.S. Department of Transportation report.  Colorado, alone has more 100 srrucutrally deficient bridges.  Federal stimulus to bring these bridges to safe standards for the next 50 years would bring jobs for design, materials and construction with their associated multipliers throughout the nation.
  3. Alternative energy projects can bring substantial jobs in materials as well as construction and operations in much of the nation.
  4. High speed intercity rail, where appropriate, will bring jobs in design, manufacturing and construction since the rail beds as well as the vehicles need building.
      All of the above would put people to work in engineering, manufacturing and construction. They are not "make work" because each of them will produce long term economic benefits to the regions where they are placed. They would also force US manufacturers to become more competitive in order to gain the contracts for the work. Increased taxes would pay for the projects, so that they could be afforded. Why do we hear that we should not be doing this?


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