Infrastructure

As long as we're enumerating things teabaggRs believe that are demonstrably and dangerously wrong (and I was), I received a missive from my investment guy the other day, which referenced the most recent commentary of Bill Gross, co-founder of PIMCO and, evidently, a highly respected voice in financial and investment matters. As if to confirm its importance, several sites which I visit regularly have referred to the article as well. The whole piece is here. In it, Mr. Gross takes on both congressional Ds and Rs, but the thrust is about the false argument by Rs that government doesn't create jobs, private businesses do.

Solutions from policymakers on the right or left, however, seem focused almost exclusively on rectifying or reducing our budget deficit as a panacea. While Democrats favor tax increases and mild adjustments to entitlements, Republicans pound the table for trillions of dollars of spending cuts and an axing of Obamacare. Both, however, somewhat mystifyingly, believe that balancing the budget will magically produce 20 million jobs over the next 10 years. President Obama’s long-term budget makes just such a claim and Republican alternatives go many steps further. Former Governor Pawlenty of Minnesota might be the Republicans’ extreme example, but his claim of 5% real growth based on tax cuts and entitlement reductions comes out of left field or perhaps the field of dreams. The United States has not had a sustained period of 5% real growth for nearly 60 years.

Both parties, in fact, are moving to anti-Keynesian policy orientations, which deny additional stimulus and make rather awkward and unsubstantiated claims that if you balance the budget, “they will come.” ...

... Well, commonsensically and anecdotally, I know of no family who, after watching the Republican candidates’ debate in New Hampshire, went out the next day and bought themselves a flat screen under the assumption that their Medicare entitlements would be cut in future years and the U.S. budget balanced. ...

...Additionally and immediately, however, government must take a leading role in job creation. ...

In the near term, then, we should not rely solely on job or corporate-directed payroll tax credits because corporations may not take enough of that bait, and they’re sitting pretty as it is. Government must step up to the plate, as it should have in early 2009. An infrastructure bank to fund badly needed reconstruction projects is a commonly accepted idea, despite the limitations of the original “shovel-ready” stimulus program in 2009.

It makes so much sense that even a non-economist like myself has been arguing for it since the stimulus was just a gleam in Obama's eye: too much in tax cuts, not enough in infrastructure spending.

And yet, precisely because it makes so much sense, it'll never happen as long as teabaggRs control the House. What's good for the country, what works, what is needed whether it fits their encrusted ideology or not -- is simply off the table. Unless it fills the pockets of the wealthy Republican sponsors, good ideas from reasonable people are like tea in Boston harbor: sunk.

[Addendum: hardly liberal, the WSJ weighs in in similar fashion.]

[And, finally, Ds are beginning to state the obvious: Rs don't want the economy to recover before the election. Screw the country? Who cares? As long as it might get them votes.]