Wednesday, June 16, 2010

We Should Approve New Stimulus Spending

The Obama administration is asking for another $50 billion in stimulus money to help states and local governments avoid layoffs of policemen and firefighters. Most commentators have spent considerable time evaluating the politics of the extra spending.

There is no doubt that the politics are tricky. Democrats are skittish about doing more deficit spending lest they conform to the conservative critique that they’ve ruined America’s finances. Republicans would like to show their base that they’ve really reformed after the Bush years and are in fact hawkish on spending. In an election year, these two factors might combine to keep the spending proposal from going through.

But I think there’s an opportunity for President Obama here. There is a good chance that the proposal will be defeated in this environment. By November however, other issues will come to the fore and Obama’s strategists will have a chance to focus Americans’ attention on new issues other than their spending fatigue. But what will happen in the meantime is massive layoffs of teachers and police.

In the next couple of years, Americans will see first hand the consequences. Student-teacher ratios will go up, and their children will have access to fewer extracurricular activities. Some of their childrens’ favorite teachers will in fact be laid off if those teachers are relatively new on the job. Moreover, as cities across the country fire cops, Americans might feel less safe, especially if crime rates spike up. Obama would then have an opportunity to paint conservatives as heartless tightwads who cut funding for students and put the lives of law-abiding citizens at risk.

Especially as it relates to crime, Obama has an opportunity to turn the tables on his political opponents. For at least a generation, Republicans have painted Democrats as soft on crime. If his spending proposals are defeated, Obama can go before audiences of law-and-order moderates during his reelection campaign and plausibly claim that Republicans took actions which made their communities less safe.

Still, I think we’ve focused too much on the politics of the spending. The real question should be, is this a good policy? I understand the concern about deficits. Some wonder, if we don’t stop this spending, will we ever get serious? But I think focusing on deficits here to the exclusion of every other consideration is misguided in this case. As much as $50 billion is, it is but a drop in the bucket of the overall deficit.

Besides, this money is for truly important purposes. Firing teachers and further straining school budgets puts the idea of a quality education for millions of children at risk. Maybe the idea of giving these students a good education to provide for their social mobility doesn’t concern you. But the potential economic consequences should. Children who have received substandard, shoddy educations will lack the skills to meaningfully contribute to the economy as adults. Here is a McKinsey study that shows just how much America’s education system costs the economy now. Firing thousands of teachers and slashing school budgets for America’s most vulnerable students is likely to exacerbate that cost. That leaves the ironic prospect that when the economic recovery begins in earnest, its continued improvement will be put at risk over concern about a relatively small supplemental spending bill. I can’t help but thinking that the understandable concern over deficits in this case is ultimately shortsighted.

1 comment:

  1. Are you poor? Then it makes sense. Poor people always want to pay for things with other people's money. Sad.