Thursday, September 9, 2010

When you're in a hole... dig a little deeper

This week President Obama proposed $180 billion of new spending which, he says, is necessary to get the economy going again. $50 billion of that money would be spent on infrastructure projects -- building and repairing roads and bridges across the nation.

There are a number of reasons to be cynical about spending tax dollars in this way. The most obvious is that we don't have the money. America is broke, and continuing to spend money we don't have just digs us deeper into the "ditch" Obama keeps telling us the Republicans drove us into.

In addition, there's little reason to believe that more spending will do anything to help the economy. Despite assurances that Obama's original "stimulus" plan would "jump start" the economy, all we've got to show for it is higher unemployment and a ditch that is a trillion dollars deeper. Recall that billions of dollars of that original "stimulus" money were directed precisely at such "shovel ready" infrastructure projects -- to no avail. What's so special about this particular pile of money that we should expect better results this time around?

Note also that Obama's latest spending spree will, by design, be spread out over six years. Even if we accept on faith, despite trillions of dollars of evidence to the contrary, that such a project will boost the economy, don't we want that boost to come now, and not six years down the road?

This was one of the big "tells" that the original "stimulus" package was a farce. The administration scoffed at critics who pointed out that much of the money wasn't scheduled to be spent until years down the road. Yet here we are, almost two years after Obama was elected -- we've blown past the "jump start" and the "Summer of Recovery" -- and still half that money hasn't been spent. So stimulus, that.

We've seen this movie. We know how it ends. No need for a sequel.

Finally, there's this:
When Congress passed the Federal Aid Highway Act of 1956, it gave the Bureau of Public Roads a clear mission: oversee construction of a safe, high-speed Interstate Highway System. As that system neared completion in the 1980s, the mission of the Department of Transportation became increasingly murky. Now the department is supposed to reduce congestion; attract people out of their automobiles; clean the air; promote economic development; improve livability; create a sense of community: and accomplish a variety of other often conflicting goals -- most of which are not easily quantifiable.

As the mission became muddied, each surface transportation reauthorization since 1982 has included an increasing number of earmarks, divided revenues among more and more different funds, and added lengthy rules for how those funds may be spent. Each earmark, apportionment, and rule has made transportation spending incrementally less efficient.

This increasing politicization of something that began life as a fairly efficient program is the predictable result of government involvement in what is essentially a private economic activity. The inevitability of such decline is a good argument for abolishing the U.S. Department of Transportation and devolving federal transportation programs to the states.
Government is just bad at this stuff. Extremely bad. It's a monopoly and, as such, it has little incentive to seek efficiency or produce a superior product.

So what are we left with? $50 billion more down the rabbit hole, with little impact on the economy. Meanwhile, Obama can boast about the jobs he'll "create or save" -- all of them union jobs, incidentally -- while ignoring the private sector jobs he'll preclude or destroy by siphoning that $50 billion away from those "evil rich" employers.

I agree with Thomas Sowell that probably the best thing politicians can do to boost the economy is to shut up and stop meddling.

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