A new round of federal spending looks too little, too late for the nation’s searching jobless and sputtering economy, and it seems to be a “Hail Mary pass” of desperation, Mercer University experts and Georgia’s senior senator in Washington said.
President Barack Obama spoke this week in Milwaukee and Cleveland about a new $300 billion plan to stimulate the economy through government spending and tax credits.
U.S. Sen. Saxby Chambliss, R-Ga., said through his office that he could not make a definitive comment on the new stimulus without seeing specific details that go beyond the broad brush strokes the White House has offered.
“The public has made it clear that they do not want the government borrowing any additional money from their children and grandchildren,” Chambliss said in a statement, “and raising taxes in this economic climate is not wise.”
The White House admitted this week the effort would probably not receive much support in Congress until after the midterm elections in November.
For Mercer economist William S. Mounts, stimulus spending generally doesn’t create jobs to a great degree.
“I don’t think this new round would help much at all,” said Mounts, who is an associate dean of economics. “It’s often the case that this type of stimulus money is aimed at specific projects, and those projects are usually completed by specific contractors that move from one job to another.”
This “swap from one contract to another” model doesn’t show a track record of creating jobs, Mounts said. “I find this is fiscal policy which reallocates resources and not new output in the economy.”
Chris Grant, Mercer associate professor of political science, said the new stimulus proposal is seen by many as a response to claims that the $780 billion February 2009 stimulus was not enough and, in some measure, is headline grabbing.
“It looks like the Democrats are grabbing at anything they can in a policy response that would create some buzz that they are doing something to end the recession,” Grant said. “The president’s popularity is low, and there is a buzz that they will lose the House.
“The ship is sinking, and this looks like a ‘Hail Mary’ pass of desperation.”
The previous stimulus track record is not good, Grant said, with many arguing there has been no tangible benefit from that spending bill “because it has been poorly executed, with many of the projects not even being started right now.”
A cornerstone of the tax credit proposal, according to the White House, would allow new businesses to deduct 100 percent of start up expenses immediately. Currently, businesses have to spread the deductions out over years.
The Obama infrastructure plan would rebuild 150,000 miles of roads, build 4,000 miles of railways, and add 150 miles of airport runways, along with enhancing landing navigation systems to ease travel delays.
The president also wants to start an “infrastructure bank” that would pay for long term improvements to road and bridge projects.
Mercer experts agree that a new round of government spending, whether it is dubbed stimulus, is not popular across the nation, even though it might be an optimum time to pull out the national credit card and build new roads.
“Now’s a great time to borrow money. Interest rates are low, and that makes it very desirable to borrow money for government spending,” Grant said.
“The political reality is that many Americans are against driving up the national debt, and that’s a real issue going into the November election.”
To contact writer Shelby G. Spires, call 744-4494.
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