CNBC is reporting a Second Stimulus May Arrive by Christmas - I hope it looks different than the last one.It is being reported that
House Speaker Nancy Pelosi on Wednesday urged passage of at least $61 billion in new economic stimulus funding this month, but said the future of the legislation requires the cooperation of Republicans in the Senate and President Bush.I am having deja vu all over again! At least $61 billion but discussions are ranging up to several hundred billion dollars. I hate this idea and stated so numerous times last March, including one of my most important stories of the year (I think) Fund roads & bridges NOT mad money stimulus.
We are past fretting about the banking crises and the housing market collapse. These issues have not resolved themselves yet but they are closer to the bottom now and if not there may not have that much further to go. The crises in 2009 will be different. Next year the crises will be about a rapid increase in unemployment.
From what I am seeing in the real estate and construction market now I would not be surprised if unemployment is at least double the overall national average in six months. There are many advantages to using any notion of economic stimulous for infrastructure projects. The most important reason is to stimulate productivity not consumption.
If we build roads and bridges and tunnels and the like we will be spending money on things we know that we need and that will last 80 to 100 years! If we just fund a cash giveaway, we will be funding things like televisions and cell phones and other perishable or highly depreciating commodities. The former is a much, much better investment then the latter.
Improved transportation networks also serve to increase productivity in numerous ways -- consumption does much less.
Another difference is that we will be keeping more of the money in the United States versus sending half of it overseas. I say put people to work, keep the money here, stimulate the higher return on investment -- in physical terms and personal terms.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.
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Reader Comments (Page 1 of 1)
11-06-2008 @ 2:41PM
Virgil Bierschwale said...
Take a look at my latest article titled "Stimulus Package" at http://www.KeepAmericaAtWork.com to see what I think of stimulus packages.
From what I'm hearing, a lot of people that really needed help didnt get any.
I've said this time and time again and I'll say it until it sinks in.
We don't need stimulus packages, or bailouts.
We just need to put our people back to work by bringing our jobs home and adding the companies that are sending our jobs overseas and ruining our economy and national budget to the "Wall of Shame" at http://www.KeepAmericaAtWork.com so that their friends and neighbors will know who to blame for their reduced sales figures.
Virgil
http://www.KeepAmericaAtWork.com
11-07-2008 @ 1:30AM
BoboTheClown said...
While infrastructure investments may make a lot of sense, they will NOT help the economy in 2009. It simply takes too long to get the money through fed, state, and local government, do the EIS, design, etc and finally get bids back from contractors. In the very best case that process takes more than a year.
11-07-2008 @ 6:12AM
Sheldon L said...
Bobo,
It will take 6 to 7 months instead of 2. The difference is worth it. Worth vs waste.
11-24-2008 @ 12:35PM
Keith Jeffery said...
The bailouts are a joke. Let them reorganize thru bankruptcy and become better companies as a result. Fire the so called leaders of these companies as a requirement of bailout. Doing the same thing and expecting different results is the problem. As far as Obama. If he is filling his cabinet with Clinton cronies. How much change can we really expect...