Stimulus or No Stimulus?

Here is a new feature on the recent passage and signing of the American Recovery and Reinvestment Act.  Twice a week during these next few weeks, I will disect this law item by item and describe how each item will or will not stimulate the economy.  Also in this feature, I will discuss the latest on how this money is actually being spent as told by the new government webpage, recovery.gov.

First, as preface, this bill is neccessary and in general a very effective bill.  If we do nothing other than bail out banks, which is what Herbert Hoover did in a nutshell, our economy will do exactly what Hoover's did...go from 3% unemployment in 1929 to 25% in 1933 (or in this case, 3% in 2008 to 25% in 2012).  And spending billions on infrastructure such as mass transit, broadband and highways as well as billions in state aid to keep unemployment benefits flowing and neccessary government officials like police and firefighters from being layed off will create millions of jobs.

It's priorities are sound and well layed out.  It will aim to create clean, renewable (and cheap) energy to end our dependence on foreign oil that funds terror and causes global warming.  It will modernize bridges, highways and roadways to prevent tragedies like the Minneapolis bridge collapse and daily breakdowns of our transportation services.  It will increase consumer spending with tax cuts targeted at the middle and lower classes, the most likely people to spend money.  And it will transform our education department for the 21st century while preventing mass layoffs of neccessary public sector jobs like mentioned before.

And while I may have criticized Sens. Nelson, Specter, Collins and Snowe last week for their watered down version of the stimulus package, most of their cuts will have no impact on the economy for years (the point of the cuts) and they were neccessary for us to have any package at all.  To get started, here are today's items.

Energy

• Five billion dollars will go to weatherizing modest income homes.  This will weatherize up to one million homes when all is said and done (source: Miami Herald).  This money will ideally be spent before next winter and will mainly go to purchasing materials hopefully made here in the U.S. and paying workers.  Rather than waste billions of dollars per year handing out cash to the poor for their heating bills, this section aims to fix the problem once and for all.
  
• Everybody by now has seen the recent IBM ad campaign lobbying for a new energy grid run by technologically advanced computer systems rather than inefficient, never upgraded grids.  It's called a "smart grid" and if it makes this country just 5% more energy efficient, it'll be like taking 53 million cars off the road (source: Wikipedia).  Well that's part of the next thirty billion dollars that'll go to smart grid technology and renewable energy.

Science and Technology

• Senators Collins and Nelson cut about 50% off of most science sections of this bill.  They left in a very important $7.2B in spending on broadband technology.  It aims to link up as may underserved Americans as possible to the broadband internet system.  That will create millions of jobs from building the nuts and bolts (in this case, wires and telephone polls) of the system to the jobs that the system itself aims to create through creating efficient businesses.
• The package aims to spend about $15B for creation of science facilities.  Obviously, science is a hit or miss so it's hard to say whether this will work or not.  It could create a cure for cancer or it could create a three-eared mouse...who knows?

Transporation

• $17.7B will go to creation and fixing of mass transit sytems.  This was raised significantly through grassroots lobby from such pubic interest groups as U.S. Public Interest Research Group (PIRG).  Across the nation, thousands of construction jobs on subway stations, bus terminals, busses, trains, etc have been halted due to bankruptcy of mass transit departments.  These jobs already have all the neccessary permits to restart...they just need money.  That's "shovel-ready".
• $18.8B will go to clean water, environmental restoration and flood control so that something with so many warnings like the levee breach in New Orleans (something that we'd been warned about long before Hurricane Katrina was even a tropical depression) never happens again.  And we have to end these constant "boil-water warnings" that have become much more than annual throughout major cities.
• $27.5B to highway construction...that's pretty much self-explanatory.  This creates a slew of jobs (at least 10 or 20) for every individual project, so collectively it will create millions of them.
• $16.5 will to go "other federal and public infrastructure" whatever that means.  Sort of a miscallaneous category.

This will continue on Thursday...probably Tuesday and Thursday of each of the next few weeks.