What happens when over a hundred billion dollars in borrowed cash gets plunged into infrastructure spending and it fails to kick-start the economy? According to this administration, spend another $50 billion on the same failed policy. Barack Obama will unveil his new economic stimulus plan in Wisconsin today, while Russ Feingold looks for a place to hide:
US President Barack Obama unveils plans Monday to spend at least 50 billion dollars to expand and renew US roads, railways and airports, in a fresh bid to fire up sluggish economic growth.
Obama, under intense pressure over November’s mid-term congressional elections in which his Democrats fear heavy losses, was set to make the announcement in a speech in Wisconsin, an official said. …
A White House official said that the “bold” infrastructure plan will be front loaded and make significant investments in the first year, in a bid to stimulate the sagging economy and boost jobs growth.
It appeared unlikely however that Obama could get the plan passed through Congress before the mid-term elections.
Don’t be too sure it won’t pass Congress before November. Transportation bills like this give Capitol Hill denizens plenty of opportunity to get pork for their home districts and states. In this election cycle, pork may be all Democrats can use as an argument for re-election. They certainly larded the first stimulus bill with plenty of home-town pork, and with $50 billion more in borrowed cash, don’t expect them to be shy the second time around.
However, don’t expect it to work, either. The original Porkulus had $105 billion in so-called “infrastructure investments,” and none of it produced any economic growth. Transportation accounted for $48 billion; energy infrastructure and R&D got the same amount of money. Housing got $10 billion. Front loaded or not, the money got allocated and borrowed, and we’re back to flatlining economic growth just eighteen months later — only now we have a lot more debt on top of the other problems we had.
Just a few days ago, Obama called for new ideas on how to restart American growth. So far, all he’s offering us is the same failed and expensive Keynesianism that he tried in February 2009. This is a White House in desperate need of a Plan B, which instead insists on retrying Plan A over and over again in the hope that it might work once.
Update: Commenter PattyJ wonders if anyone actually saw “infrastructure” being built from the original Porkulus. Sure, I did; I did a couple of driving trips through Minnesota, Iowa, Wisconsin, Kansas, and Missouri over the past year and saw plenty of ARRA signs on road construction projects. One local project closed an important freeway interchange for two months when it didn’t even have surface issues to repair. Most of them were just accelerated wish-list projects that were not needed and didn’t produce any lasting jobs at all. That was certainly the case for that remodeled interchange.