Krugman is worried. We have the parachute, but we might not be able to deploy it before we hit the ground. In other words, we know Obama's plan to turn the economy around by building the infrastructure is a good one, but double-digit unemployment is just around the corner. The problem is:
Infrastructure spending will take time to get going — a new Goldman Sachs report suggests that projects that are “shovel-ready” are probably only a few tens of billions worth, and that a larger effort would take much of a year to get going. Meanwhile, it’s very questionable how much effect tax rebates will have on consumer demand. So it may be hard for stimulus to get much traction until late 2009 — and that’s even if Congress goes along, which may be a problem given all the bad analysis and disinformation out there.
So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder.
And certainly Obama'a alternative energy plan as a means to economic stimulus isn't ready to hit the ground running either.
And has for the tax rebates? I don't think they do as much to stimulate the economy has people think. IF people spend the money (rather than pay off bills), they might by FRENCH wine.
Yglesius makes an argument that infrastructure spending doesn't necessarily mean HUGE projects like national supertrains, etc. "Infrastructure" includes things like cracks in the sidewalk, and bridge repair.
Good point. If federal infrastructure expenditures are given to state and local governments, it can be used to jump start the economy (or, better said, impede the downfall), by simply taking care of faulty infrastructure at that level. God knows the work is there and needs to be done.