The Stimulus and Infrastructure

I just read an editorial by PA governor Ed Rendell this morning about how the nation's infrastructure is in such poor shape. When you look at roads in Pennsylvania, you can easily understand why he writes this. Our roads are annually ranked by truck drivers as among the worst in the country.

But, it's not just in PA that we have infrastructure issues. It wasnt that long ago we had that catastrophic bridge collapse in Minnesota (2007). When you drive around most major cities here in the northeast down to DC, it is common to get caught in a major traffic jam at least once a week. Traffic jams result in less productivity.

Yet, when the $800 billion stimulus package was passed last year, it did very little to address these issues. Occasionally, we see a sign touting the stimulus along with some road construction. I travel down to DC now and then and have seen one small strip of I-270 being worked on where this sign is visible. Between Frederick and Rockville, I-270 needs widened due to the ever growing population in both areas. Yet, there is no sign of that happening.

The fact is the stimulus was misguided into the pet projects of liberal leaders, the pockets of the unions, and to ease some of the budget concerns facing state and local governments. All it did was put off the pain of spending and employee cuts in state and local governments until now.

We are going to have a slow recovery. Corporations are flush with cash from all of the savings they created by cutting jobs the last two years. They are shy to hire new workers due to Obamacare and since the Bush tax cuts are set to expire January 1st. The government is now essentially out of money due to the high deficits and voter anger about all the spending that has done nothing to create new jobs. As a result, the recovery in jobs will be slow. Oh, what could have been.