Packaging For Tomorrow

spink_is_not_dead asked:


By Dr. Merrill Matthews, resident scholar with the Institute for Policy Innovation

There are at least three necessary ingredients for jumpstarting a faltering economy. John McCain embraces all three; Barack Obama shuns them. It’s just that simple.

Free Trade — Economist Milton Friedman once said that of all the pro-growth policies a government should adopt, free trade is the most important. Former Federal Reserve Bank Chairman Alan Greenspan has said that taxing trade between countries makes no more economic sense than taxing trade between states.

McCain aggressively pushes free trade agreements. Obama, especially since pandering to the union vote in the Ohio and Pennsylvania primaries, talks like a protectionist and even opposes the Colombia Free Trade Agreement.

Low, simplified taxes — McCain maintains the current tax rates on income, capital gains and dividends and cuts the corporate tax rate. Obama proposes numerous “tax cuts,” many of which are nothing more than income transfers to people who dont pay taxes. He would complicate the tax code and, because he’s targeting the cuts, he gets to pick the economic winners and losers.

Reduced government spending and regulations — According to the National Taxpayers Union Foundation, during the first session of the 110th Congress:

* McCain sponsored or cosponsored 22 bills, which would have increased federal spending by $8 billion annually.
* Obama sponsored or cosponsored 114 bills, increasing federal spending $75 billion annually.

That’s a little more than $9 of government spending for Obama for every $1 for McCain.

While McCain has also suggested some troubling programs (like buying up home mortgages), his basic economic plan would be the best “economic stimulus package” the country could get.

Lydia

Eric Kaad asked:


The fastest method of economic recovery lies in the creation of commercial construction jobs. The fact being, that when you build a structure it creates an immediate demand on both the skilled labor and manufacturing sectors to produce.



Obviously, residential construction is not what is being advocated due to the high inventory of unsold homes already on the market, but rather the thousands of private commercial capital improvement projects which are on hold resulting from the lack of credit needed to finance their projects.



Even after receiving the first $700 billion from the Bush administration, banks are not willing to lend money to institutions who can demonstrate that the proposed improvements will create cash flow in repaying the debt.



There are aspects to the Obama stimulus package that will create jobs in the long term, however the package lacks any near term benefits. When you look at some of the larger elements of the package they break out as follows:



Energy: $60 billion; Tax cuts: $275 billion; Education: $140 billion; Infrastructure: $90 billion; Financial Aid: $102 billion; Healthcare: $110 billion



With the exception of infrastructure, tax cuts, and about half of what is allocated for energy, the rest is strictly financial aid and cannot be considered stimulus. Tax cuts, on the other hand, will spur some level of spending, but in this economic climate will most likely go to basic necessities as opposed to the purchase of non-necessities.



Construction activity creates manufacturing demand and when combined together, construction and manufacturing represent the largest pool of workers in the country.



During post WWII and early 50s an infrastructure boom occurred with the Interstate Highway System project, which rolled back unemployment lines to the lowest levels ever.



The intent of the Obama infrastructure stimulus is the same, however falls short when you consider the years of planning required before breaking ground as well as the level of technological advances that have occurred since post WWII in reducing labor man hours for road work projects. Over the last 50 years, construction technology and equipment in terms of road and highway construction has improved to the point where they are now considered Material heavy and Labor light.



Additionally, seeing as how most of our infrastructure already exists, these projects would be relegated to improvements rather than full scale construction projects the lackluster notion being, building a house is more labor intensive than painting a house.



Although maintaining roadway infrastructure is important, the economic benefit of aiding private commercial projects would be realized immediately.



Commercial building projects are labor intensive involving the entire spectrum of work trades ranging from carpentry to electrical to mechanical disciplines. In addition, the components required for the structure are manufactured and engineered which compliments the broader manufacturing industry as a whole.



The opportunities exist in the Healthcare, Institutional, and Research sectors and come in the form of building additions and large interior renovations for existing facilities.



The demand for these projects is created by the need to keep up with the technological innovations of capital equipment. Additionally advancements have been made in building science; most notably in the areas of operating efficiency and environmentally friendly construction solutions.



If banks will not lend money for commercial building projects the unemployment lines will continue to swell.



Commercial construction is and has always been the catalyst to economic prosperity and will undoubtedly create an instant demand in our manufacturing sectors. Government stimulus in the form of financing will put people back to work almost immediately as most of these projects are already designed and considered to be shovel ready.



Even though Obama may not care for Joe the Plumber from Ohio for his tough questions, he has the ability to win the respect of Joe the Plumber by putting him back to work and getting our economy back on track.





DAR asked:


“Stimulus for Who?
This week the House is expected to pass an $825 billion economic stimulus package. In reality, this bill is just an escalation of a government-created economic mess. As before, a sense of urgency and impending doom is being used to extract mountains of money from Congress with minimal debate. So much for change. This is dj vu. We are again being promised that its passage will help employment, help homeowners, help the environment, etc. These promises are worthless. This time around especially, Congress should know better than to pass anything of this magnitude without first reading the fine print. There a many red flags that I have found in this bill.

At least $4 billion is allocated to expanding the police state and the war on drugs through Byrne grants, which even the Bush administration opposed, and the COPS program, both of which are corrupt and largely ineffective programs.

To help Big Brother keep a better eye on us and our children, $20 billion would go towards health information technology, which would create a national system of electronic medical records without adequate privacy protection. These records would instead be subject to the misnamed federal medical privacy rule, which allows government and state-favored special interests to see medical records at will. An additional $250 million is allocated for states to nationalize individual student data, expanding Federal control of education and eroding privacy.

$79 billion bails out states that haphazardly expanded their budgets during the bubble years, but refuse to retrench and cut back, as their taxpayers have had to, during recession years.

$200 million expands Americorps. $100 million goes to faith-and-community based organizations for social services, which will further insinuate the government into charity and community service. Private charities are much more efficient and effective because they are directly accountable to donors, while public programs tend to get rewarded for failure. With its money, the Federal Government brings its incompetence and its whims, while creating foolish dependence. This is sad to see.

Of course the bill is rife with central planning projects. $4 billion for job training, much of which will be used to direct workers into green jobs. $200 million to encourage electric cars, $2 billion to support US manufacturers of advanced batteries and battery systems, which is yet another function of government I cant find in the Constitution. Not to mention $500 million for energy efficient manufacturing demonstration projects, $70 million for a Technology Innovation Program for research in potentially revolutionary technologies in which government, not supply and demand, will pick winners and losers. $746 million for afterschool snacks, $6.75 billion for the Department of Commerce, including $1 billion for a census.

This bill delivers an additional debt burden of $6,700 to every American man, woman and child.

There is a lot of stimulus and growth in this bill that is, of government. Nothing in this bill stimulates the freedom and prosperity of the American people. Politician-directed spending is never as successful as market-driven investment. Instead of passing this bill, Congress should get out of the way by cutting taxes, cutting spending, and reining in the reckless monetary policy of the Federal Reserve.
http://www.house.gov/apps/blog/tx14_paul/090126_2631.shtml

What do you think?

Jovani