Paul Krugman was my favorite New York Times columnist even before he won the Nobel Memorial Prize in Economics this week. His column on Friday lined right up with my current obsession: federal stimulus spending, quick, lots of it. He writes: "Right now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold."
We're plunging into what is looking like the worst recession in decades -- precisely the circumstances in which federal governments should spend more than they take in, borrowing the extra. Yes, it's a horrible time to accumulate additional debt in the United States, given our imponderably enormous national debt, but the alternative to additional debt is colossally worse: a depression.
So how do we invest a lot of federal money quickly to stimulate the economy? How do we do it without wasting the money and, in fact, in ways that will generate enough shared prosperity to repay the new debt in time?
Here are Krugman's suggestions:
"[The federal government] can provide extended benefits to the unemployed, which will both help distressed families cope and put money in the hands of people likely to spend it. It can provide emergency aid to state and local governments, so that they aren't forced into steep spending cuts that both degrade public services and destroy jobs. It can buy up mortgages . . . and restructure the terms to help families stay in their homes.
"And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn't needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let's get those projects rolling."
Last week, the New York Times reported that the majority in Congress is thinking along the same lines. We'll write another time about infrastructure that generates the prosperity to pay for itself. (Bikeways, anyone?) And we'll mention some grand plans that others have offered.
For starters, though, let's fund programs we've already created. Here are two ideas from friends at Redefining Progress:
- In December 2007, the Energy Independence and Security Act become U.S. law. It authorized a national Green Jobs program to train 35,000 workers a year for clean-energy jobs. It also authorized a set of innovative Energy Efficiency Block Grants to the states. But Congress never funded these programs. Let's double-down on both the training fast, while unemployment is up, and on the block grants so states can harness their creativity to retrofitting buildings: a win for energy independence, economic stimulus, and workforce development. Existing training and energy-efficiency institutions could absorb several billion dollars of funding fast and well.
- Let's send block grants to states for their own green-collar jobs programs. Early this year, for example, Washington established a model program for training low-skill workers for green-collar trades, but the deflating economy has left budget writers in Olympia with no way to fund the program.
What are your ideas for a clean-energy stimulus package?
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Comments
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Jon Rynn Posted 7:56 am
22 Oct 2008
Rail, rail, and more rail: a) a national system of high-speed rail, b) light rail where appropriate in cities, c) expanding funding for transit systems (because they are having to cut back service because of higher oil prices and recession, d) subsidizing electrification and expansion of freight rail
Nationalizing, or nationalizing the financing of, the national electrical grid. Subsidize wind farms that attach to the grid, so that they provide baseload, eventually.
"Classic" green-collar retrofitting jobs, maybe including installing geothermal heat pumps (including training)
Subsidize/finance solar panel installations (as in the Berkeley program), including training. Maybe even have the government help finance a bunch of silicon purification plants, which are the main roadblock/expense of solar panels.
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Erik Hoffner Posted 10:46 pm
22 Oct 2008
Otherwise, I'd like to see DOE and USDA streamline their guidelines for clean energy startup seed money and loan guarantees. There are many clean energy projects just waiting to be launched, but red tape scares some off of partnering with the Feds.
Erik
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amazingdrx Posted 12:58 am
23 Oct 2008
Divert subsidies from big oil, coal, and nuclear power corpoprations to direct per kwh subsidies for renewable power and conservation. Checks right to homeomers, farms, and small businesses.
Those organic CSAs and farms should get a check Erik, for power generated and chemical fertilizer from natural gas saved.
Order millions of units per year of plugin hybrids, ground source heating/cooling systems, and solar cogeneration panels for government use, to get mass production going.
The auto industry wants a bailout? Fine, but get millions of affordably priced, mass produced plugin hybrid economy cars in return. We need a model T for this energy re-evolution to replace oil.
A simple, economical car that gets US off our oil addiction and out of perpetual oil wars and the resultant periodic economic damage.
Insist on a standardized economy plugin hybrid drivetrain inside the cars ordered from US auto companies. They can decorate the outside, but get a practical design inside.
Bolster student loan and grant programs for solar and ground source heating installation programs, California is short of solar installers right now.
You got that right Jon, make silicon fab for solar PV a national mass production goal, as in war producyion goals during WW2. Fund R & D on solar furnace powered silicon refining cogeneration power plants.
The Berkely model is very interesting, we need some studies of the results as soon as possible.
Gore's carbon pricing model should be part of the green stimulus. Carbon taxes would fund tax rebates for those under 250k income.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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caniscandida Posted 2:14 am
23 Oct 2008
And so, we may well wonder with what confidence Krugman is looking ahead toward an Obama presidency. All of us should be confident that Obama understands Krugman's assessment of (this part of) America's problems, and is surely fully welcoming of Krugman's recommendations (as well as those of Jon, Erik and Amazing!).
What we do not yet know is how Obama will assess the financial limitations of government, even as he may fully agree with Krugman et al. that "green-collar stimulus" is an excellent direction for government at different levels to follow in the long-term recession. Also, we do not yet know how courageous Obama will be in risking being charged with "socialism" by right-wing ideologues.
A lot seems to turn on whether the Senate Democrats get to sixty.
Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.
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Pangolin Posted 8:08 am
23 Oct 2008
Create a hybrid battery pack standard so that packs are swappable from a Prius to a Ford Escort hybrid with sizes up to dump truck. Likewise create a series of genset standards the will power anything from a Geo Metro to a cement truck. Make them all fit the same motor mount and have some kind of common output.
Ground-loop or community-thermal loop heat pumps should be sized in standard sizes and connections just like regular AC units are.
With modular units smaller companies can enter the game producing a better version of module-X with full knowledge that customers can put their product to work. This did wonders for bringing down computer prices.
As long as many of these projects require an engineers review we will always play catch-up. Industry standards boards are precisely where government does it's job best. Tell them to agree upon a standard or the gov't will do it for them and the process will fly.
Put the Carbon Back
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amazingdrx Posted 12:52 pm
23 Oct 2008
I like that Pang, standards. That could be done with very little meddling.
NREL could help determine what is possible and how to measure performance up to the standards. Making battery packs interchangeable would be especially helpfull, that could lead to robotic filling stations that you pull up to and the "gas pump" extracts your used battery and plugs in a charged one.
Yep solar and ground source heating would be easier with easily assembled and mass produced standard components.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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