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Climate Change Is Important: Energy Conservation is the First Step


March 3, 2009

The Stimulus: Here, Now, and A Lot of Green

Category: Conservation,Policy,Transportation – Tom Harrison – 5:04 pm

In a sea of bad economic news, it’s good to see that there are jobs coming — the stimulus to states is beginning, and the New York Times published a list of stimulus projects, by state. It pretty cool to see how many of these are repairs and improvements to public facilities. When I pay my taxes, I do like to think that this is the kind of thing I am paying for. Even cooler still, many of the projects I saw on the list for my home state of Massachusetts (pdf) improve energy efficiency.

I am sure there will be graft, corruption and frivolous projects done as part of this. But judging from those on the list for my state, they are mostly just “things that were on the list to get done” but didn’t make it. And, on the radio this morning, I heard that even high-priced law firms are laying off lawyers and (gasp) reducing their billing rates. So perhaps there will be work for the poor lawyers, too.

2 Comments

  1. Despite my desire to want to give the new administration the benefit of the doubt, I just can’t get on board with this, the endless bailouts, the omnibus spending bill, or the budget.

    I would like to think that my taxes go to pay for stuff like this as well. But the simple fact is that we are spending money we don’t have. These aren’t our taxes at work, they’re our children’s. We’re robbing money from the people we’re supposed to be looking out for. We’re working against their well-being to make up for our own mistakes. It isn’t right.

    I am very fond of public work projects, especially ones that seek to preserve our resources… but it shouldn’t be done on credit. We need to reprioritize, reduce our spending, and live within our means.

    Consumers have learned their lesson, the savings rate is at 5%. Why can’t our leaders do the same?

    Comment by Mr. Green Gear — March 4, 2009 @ 1:13 pm

  2. It’s very easy to get frustrated by all the spending going on here. But it’s important to understand that the US government does not work the same way a family does. It is far from intuitive or natural to see how this makes sense, but every indication, both theoretical and based on historical evidence supports the notion of government deficit spending.

    We have been using economic levers through government spending (fiscal policy) for more than a century. Only recently did we also start using our control over interest rates to also “tune” the economy (known as monetary policies). Both are necessary, and monetary policies are preferable. But we have pushed that lever as far as it will go — interest rates are essentially zero now. The very economics professors I had in college, who in the 1980’s were thinking monetary policy could be the primary lever for a modern economy, are now rethinking their views. And even they understood that fiscal policy was the most powerful lever, if not the most refined.

    Economists of every stripe — conservative, liberal, whatever, concur that when the economy is in recession, deficit spending is an important lever to utilize. Deficit spending doesn’t make sense for our families (although many people had unprecedented debt, even in “good” times); and in most states it’s not allowed. The story is different for the government.

    Indeed, historically it is only through deficit spending that we have helped our down economies out of recession (and the Great Depression). The key to our children’s (financial) future is an economy based on reality, that is growing at a reasonable rate. And yes, when the economy is in normal growth we must pay off the debt.

    President Clinton inherited a massive deficit from his predecessors. At the time, everyone was worried about how long it would take to pay it off. In less than 8 years, policies that reduced wasteful spending and made wealthy people pay their share in taxes turned the economy around. The deficit turned into a surplus, a struggling economy turned into a powerhouse. I am far from a huge fan of Clinton, but use this recent history as an example. Many others exist under Democratic and Republican administrations in the 20th century.

    No one likes the idea that we have to spend this much, of course. But the situation is certainly pretty serious and took a long time to get to this point. At some point, the spending we’re doing now should have an impact, and country (and world) desperately seeking stability will begin to respond.

    What’s key here is that we spend not only for the sake of spending to make jobs (which, by the way, most economists are completely fine with), but that we use the opportunity of the crisis to make jobs, but also move to solve the problems that are even more dire for our children.

    I am very concerned about the state of the economy. But in the longer run, our failure to address climate change, energy independence, spiraling health costs, and the infrastructure necessary to support it — all of these things will add up to a far bleaker future than the expense of paying down a deficit.

    And this is why I am cheering not only what I saw in the projects my state has on the list, many of which address these issues, but also the new policies of the Obama administration, including cap and trade, support for renewable energy sources, health care and so many other issues that have languished. If the economic crisis means there’s more (deficit) money to spend on these things, then we can kill two birds with one stone.

    Tom

    Comment by Tom Harrison — March 5, 2009 @ 9:51 am

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