When is an infrastructure project “pork” and therefore “bad”? When does a project constitute “stimulus” and is therefore good?
Suppose there is an earmark that calls for renovating an interstate between New Hampshire and Maine. It will take 3 years and employ (including laborer, architects, engineers, support/office staff, inspectors etc.) 500 people who might otherwise be unemployed, under-employed or forced onto a furlough. Not many folks outside the upper NE will use the road. Pork or stimulus?
Pork with a hint of stimulus. How do you know the money is being properly spent? How do you know the work is necessary? The money used is money that we don’t have so we increase the debt at the same time. In 3 years those jobs are gone. What then?
Properly spent in relation to what? Efficiency on a particular project (i.e. no embezzling)? Proper in terms of the project itself? There is no “ideal” way to spend, is there?
The idea, of course, being that in employing these people and the companies they work for, they now have more money to spend in the market, are willing and able to take on more projects/employees, etc., so that at the end of 3 years, there are now more jobs and more projects coming from the private sector…
That’s good in principle, but given the current economic climate, not a realistic approach. I mean you are basically arguing in favor of extensive tax cuts, no? The problem is that there is no guarantee that people spend the money that they get back–so where is the stimulus? Something needs to be done at the front end to ensure that money is actually spent–an infrastructure project, for example, guarantees that money is spent.
Suppose there is an earmark that calls for renovating an interstate between New Hampshire and Maine. It will take 3 years and employ (including laborer, architects, engineers, support/office staff, inspectors etc.) 500 people who might otherwise be unemployed, under-employed or forced onto a furlough. Not many folks outside the upper NE will use the road. Pork or stimulus?
neither, if at all I’d just call it misguided: look at Japan, they tried this type of spending (massive infrastructure/road/bridges projects) and it didn’t help them get out of the recession at all…
That’s good in principle, but given the current economic climate, not a realistic approach. I mean you are basically arguing in favor of extensive tax cuts, no? The problem is that there is no guarantee that people spend the money that they get back–so where is the stimulus? Something needs to be done at the front end to ensure that money is actually spent–an infrastructure project, for example, guarantees that money is spent.
Unless it’s literally put under the mattress, it gets “spent”. Whether by purchasing new goods and services, through investing, or by paying down existing debt. It all enters the economy and benefits us all.
Companies reorganizing. Government getting itself under control. People getting themselves under control. Yeah things will suck for while but I have faith the country won’t collapse.
Even with the current credit freeze? If I put my money into a CD or savings account or bond–it gives the bank capital to lend, but are they doing that right now?
(By the way, this discussion completely overlooks the fact that there are a number of tax cuts in the spending bill).
Even with the current credit freeze? If I put my money into a CD or savings account or bond–it gives the bank capital to lend, but are they doing that right now?
(By the way, this discussion completely overlooks the fact that there are a number of tax cuts in the spending bill).
What credit freeze?
In answer to your question, yes, they are. There’s plenty of credit available out there for people and companies that are well qualified. The fact that underwriting has tightened up and that credit is less available to those that can’t afford it doesn’t change that.
OMB Guidance to Agencies on Definition of Earmarks
OMB defines earmarks as funds provided by the Congress for projects or programs where the congressional direction (in bill or report language) circumvents Executive Branch merit-based or competitive allocation processes, or specifies the location or recipient, or otherwise curtails the ability of the Executive Branch to manage critical aspects of the funds allocation process. * Earmarks vs. Unrequested Funding. At the broadest level, unrequested funding is any additional funding provided by the Congress -- in either bill or report language -- for activities/projects/programs not requested by the Administration. Earmarks are a subset of unrequested funding. The distinction between earmarks and unrequested funding is programmatic control or lack thereof of in the allocation process. Earmarks and Programmatic "Control." If the congressional direction accompanying a project/program/funding in an appropriations bill or report or other communication purports to affect the ability of the Administration to control critical aspects of the awards process for the project/program/funding, this IS an earmark. Note: The definition of "control critical aspects" includes specification of the location or recipient or otherwise circumventing the merit-based or competitive allocation process and may be program specific. However, if the Congress adds funding and the Administration retains control over the awards process for the project/program/funding, it is NOT an earmark; it is unrequested funding. Earmarks Include: Add-ons. If the Administration asks for $100 million for formula grants, for example, and Congress provides $110 million and places restrictions (such as site-specific locations) on the additional $10 million, the additional $10 million is counted as an earmark. Carve-outs. If the Administration asks for $100 million and Congress provides $100 million but places restrictions on some portion of the funding, the restricted portion is counted as an earmark. Funding provisions that do not name a recipient, but are so specific that only one recipient can qualify for funding.
OMB has used this definition to gather data on earmarks internally. This definition is similar to the definition that the Congress recently developed for disclosing earmarks in spending legislation (H. Res. 6 and the Senate-passed version of S. 1).
Other documents on collection of information about earmarks: *State of the Union excerpt on earmarks (1-23-2007)* *OMB Memorandum M-07-09--Collection of information on Earmarks*
The words the people and government hate the most.
True dat!
But listen to the howls of anger and dismay directed at lenders who were so grossly irresponsible to have given mortgages to unwitting, unqualified homebuyers!
How can people/companies rebuild or increase their credit rating without jobs, etc.?
Look, I am not philosophically opposed to tax cuts, I am in favor of lenders tightening credit requirements, etc. I think these items should be incorporated into a stimulus package/conditions for receiving aid. I just don’t think that simply having tax cuts, credits, or whatever and little else is sufficient…
“The problem is that there is no guarantee that people spend the money that they get back–so where is the stimulus? Something needs to be done at the front end to ensure that money is actually spent–an infrastructure project, for example, guarantees that money is spent”
Actually, you’ve got it a bit backwards. The “front” end would be tax cuts. Historically, tax cuts have demonstrated success (the degree to which can be debated) - even when done by democrats (JFK). Economics should not be political. However, tax cuts move money into the system faster than infrastructure - which also CAN be effective when it will be shown to actually provide GROWTH in the sector. Typically, NEW roads that could expand urban sprawl, allow business to migrate to new areas, etc. would be much more effective than fixing old ones (those jobs will only be temporary, and most likely, will have to be watched so the money isn’t spent on illegal immigrant workers). This is one of the problems when people spout of “infrastructure” projects - it is because most of them are simply wasting money with no real return on the investment.
Realistically, providing tax cuts in conjunction with proper spending (which hasn’t been demonstrated to be the case in the current “stimulus” garbage) would allow to kick start the economy, and ultimately demonstrate some return on the “hedging” being done by spending. The key is not just “spending” money, it is spending money that will allow for expansion PAST the time it is spent.
