Tuesday, August 14, 2012

Obama Economics

Quotations from interview of Michael Grunwald, author of The New New Deal (2012) by Slate contributor David Plotz (8-14-12):

"It quickly became obvious that [Obama's] American Recovery and Reinvestment Act (the formal name of the stimulus) was also a huge deal for health care, transportation, scientific research, and the safety net as well as the flailing economy."

"Most of the money in the stimulus went to unsexy stuff designed to prevent a depression and ease the pain of the recession: aid to help states avoid drastic cuts in public services and public employees; unemployment benefits, food stamps, and other assistance for victims of the downturn; and tax cuts for 95 percent of American workers. And the money that did flow into public works went more toward fixing stuff that needed fixing—aging pipes, dilapidated train stations, my beloved Everglades—than building new stuff. In its first year, the stimulus financed 22,000 miles of road improvements, and only 230 miles of new roads. There were good reasons for that. Repairs tend to be more shovel-ready than new projects, so they pump money into the economy faster. They also pass the do-no-harm test."

"First, the Obama team’s Recovery Act message was highly nuanced. It was short-term jobs along with long-term investments. It was tax cuts along with spending. It was the biggest domestic spending bill in history, but it was also just a first step toward normalcy. The economy needed fiscal stimulus in the short term but fiscal responsibility in the long term."

"Anyone who received expanded unemployment benefits or food stamps or Cobra subsidies or Pell Grants in 2009 or 2010 benefited from the stimulus. The stimulus saved more than 300,000 education jobs, and preserved over $100 billion worth of health services for the poor. We’re already using more clean energy and less energy overall because of the stimulus; the electric vehicle industry is here because of the stimulus; the domestically manufactured content of U.S. wind turbines has increased from 20 percent to 60 percent because of the stimulus. There are over 100,000 stimulus projects that have upgraded our parks, subways, hospitals, food pantries, and so forth. . . The stimulus helped prevent a depression, and as Romer says in the book, depressions really, really suck. They create horrible human suffering, and horrible deficits, too. The economy is quite lousy, but it really could’ve been a lot lousier. . .By 2015, almost all of us will have an electronic medical record because of the stimulus. The stimulus is also pouring $1 billion into desperately needed “comparative effectiveness research” that will help doctors and patients learn what kind of treatments actually work. There’s billions more for data-driven education reforms—Investments in Innovation and School Improvement Grants as well as Race to the Top—that will seek to scale up promising approaches in public schools. And the most exciting changes will transform the way we generate and consume energy."

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