Another stimulus round: where should the gov't spend that money?

[Greg]

Rumor has it there will be another stimulus package soon after the Obama administration takes over.

Rather than give that money directly to consumers (like last time), where do you think the gov't should spend that money?

This poll is inspired by this blog post at BusinessWeek that asks the same question.

Take the poll, and post your reasoning as a reply in this thread!

Edited to add: Here's a story about Obama's plans for hundreds of billions of dollars to be used to stimulate the economy. There are some ideas in that article about where that money should go.

[Philip Brewer]

I hope a lot of it gets spent on the things he campaigned on--health care and education.

Way back when I was studying economics, back in the late 1970s, one of the things that we talked about was that the government doesn't have a capital budget as distinct from regular expenditures--there's no difference between spending $1 on on a bridge that'll last 50 years versus spending $1 on toner for the laser printer.

If most of the borrowed money gets spent on things of enduring value--like bridges, but also like education for our youth and health care for people who (returned to good health) can return to being productive workers--then there's at least some hope of paying back the money.

[khorrell]

I have mixed feelings on this one - I could reasonable vote for all the options. From a purely selfish standpoint, I would love to have the cash or a gift card. If I look at it from a bigger perspective, I think it would be more economically sound to either save it or spend it on education or infrastructure. I'm not savvy enough to know if spending it on tax reductions for business would actually result in jobs.

[Greg]

I think more gov't help on healthcare and education are great ideas! I forgot to include those options in the poll. Thanks for mentioning them, Philip.

But I wonder if the effects are immediate enough to be part of an economic stimulus. I suppose investment in green industries might not be immediate enough too.

Long term, I think we should spend more money on education (more financial aid) to maintain America's competitive advantage.

And while I'm a big free-market supporter, I do think healthcare is the next thing the US needs to "socialize".

[Philip Brewer]

Originally Posted by Greg

But I wonder if the effects are immediate enough to be part of an economic stimulus.

It would at least be possible for restructuring health insurance to be stimulative, if it made providing health insurance cheaper for companies or if it made the costs of health care cheaper for consumers. In the medium term, it definitely would help, simply by removing the uncertainty of future health care costs from company's books.

Similarly, money spent on education would be spent: Teachers and janitors would get hired (or at least, not laid off). I think that's as effective as paying construction workers--and the students will go on being productive for every bit as long as a road or bridge would last.

People talk about how the last round of stimulus didn't stimulate much, because so many people used it to pay down debt. I fear, though, that it'll still end up being stimulative, because I'm afraid so many of those people will end up borrowing that money yet again, in an effort to maintain their standard of living. That's not a pretty scenario, but at least I don't worry so much that spending won't be stimulative--pretty much any spending will be stimulative.

[wildgift]

Socialized education has been successful on the west coast -- look at any list of "top universities" and the Univ. of Calif. campuses are represented. Since the UC got into the California "market" early, only one premier private university has developed: Stanford. The other private universities like USC, Pepperdine, and Occidental, aren't considered competitors to the upper strata of global education.

[Philip Brewer]

Originally Posted by wildgift

Since the UC got into the California "market" early, only one premier private university has developed: Stanford.

And the only reason that Stanford exists is that Leland Stanford, the founder, was so annoyed with how is appointment to the UC board of regents got turned into a political football, he decided not to have anything more to do with it, and used his wealth to found Stanford instead....

[wildgift]

Making the UC is like making sausage and legislation.

The results can be tasty, though.

[MoneyTrev]

Anything that gets us out of the recession and makes a better tomorrow. That's whats everyone is hoping for.

[redambrosia]

Voted for sending the moneys to state and local govs.... States are in the crapper right now, and locally designed programs are better than some federally mandated thing.