Wednesday, January 02, 2013


"At least the bridge to nowhere would have given us a bridge."

A few weeks ago I posted a bit on libraries and mentioned the Salem Public Library and praised it.  The place is pretty impressive for a fairly small city, although Salem is growing to match its size and scope.  What I didn't realize at the time was that the library is actually one of the many that millionaire Andrew Carnegie built around the country.  The library started out with volunteers of the Salem Women's Club and Carnegie built a nice new building in 1904.  So it wasn't a government effort in any way, although the city did take some of the costs and the new building eventually.  To this day the bulk of the library's expenses come from private sources such as Friends of the Salem Public Library.  If I was some kind of millionaire I'd donate money to it as well.
However, there are times in the past when the government has been responsible for some pretty major projects.  The transcontinental railroad, for example, was built with significant assistance from the federal government - loans and land grants, mostly.  Once the railroads were in place they earned hundreds of millions of dollars in short order and the loans were paid back, of course.
The bulk of the big government projects started under FDR, during the great depression.  Following the economic theories of John Maynard Keynes, the Roosevelt administration spent vast sums of money on the theory that with enough government infusion of cash into the economy, even if the debt became vast, it would get the ball rolling and turn things around.  So the Tennessee Valley Authority brought power and plumbing to areas that had never seen it in the south, building dams, roads, electrical networks, coal plants, and so on.
The Hoover Dam, the Apollo Space Project, the Interstate Highway System, all were big government projects to enhance the nation and bring greater economic prosperity.  Each new project was justified on the basis of the common good and enriching the nation in the process.  Maybe it worked, maybe it didn't.  There is good evidence and there are better arguments that the FDR spending prolonged the depression, but other arguments that it pulled us out - particularly through spending on the war.
Whether it was the Keynesian spending or the fact that the US was the only major intact industrial country on earth after WW2 that turned things around is a matter of some debate; perhaps it was both, the more I learn about macroeconomics the more I think its too complex a subject to make absolute statements about.
What is consistent about all this spending is one theme: tangible, actual benefits.  Even if you cannot pinpoint an exact economic benefit, much of this spending helps a nation feel greater pride and have greater prestige worldwide.  That's why totalitarian nations, particularly Communist ones, tend to do a lot of this sort of spending.
Russia for years blew millions on huge projects like dams on the rivers, beautiful vast railway stations, and more.  The Virgin Lands Project turned huge sections of the Taiga into farming territory (which only lasted a few years before creating a huge dustbowl because of idiotic agricultural theories).  The space race especially was a huge project, launching the world's first satellite, the first creature in orbit, and many other firsts.
North Korea built an entire city at the border of South Korea meant to be an enticement, showing off the glory of the north.  Nobody lives in it, the purpose of the city is a Potempkin, a fake meant to fool people.  China builds huge things regularly, like most of a city for the Olympics which was so effective a falsehood Democrats from Joe Biden to Thomas Friedman have praised China over and over after seeing it.  Soviet Russia used to do the same thing, as did Nazi Germany.
These kind of projects are very public to make the nation seem like a world leader and to bring praise and admiration for the government and system of the nation. See what Communism can achieve?  You should be a commie too!  Whether that convinces anyone or not, the overall project is to make people think better of a nation.
And if you're going to have big spending, at least the spending should accomplish something valuable.  If you are going to put the nation into debt greater than the gross national product, at least you got something out of it like a huge dam to be proud of that can run Las Vegas.  If you're going to bankrupt the country, at least provide jobs, electricity, and water to rural areas.  If you dig a canal across the nation of Panama, you connect two oceans and speed shipping by weeks.
But look today at our spending; what's being accomplished?  The nation is in debt so vast that even the greatest, richest economy in the history of the world is in debt so great it cannot be paid off even by taxing the nation 100%.  The interest alone is more than a trillion dollars a year.  And what do we get from it?
Our infrastructure is crumbling.  Bridges are collapsing, they canceled manned space flight, Cities are facing water shortages and power outages, the electrical network is strained every summer so bad the engineers are holding their breath hoping at best for brownouts, on and on.  The only big project that gets discussed is high speed rail, which is like building a better horse-drawn carriage (especially with the promising development of self-driven cars).
Sure, President Obama and his hand picked team of Wiley E Coyote-level geniuses poured billions into "green tech" thinking it would be the wonder economy of the future, and had the same level of success that every nation has when they tried it: complete failure.  Company after company collapsed into bankruptcy, cars exploding into flame, and businesses moving out of the country.  So even the one attempt to actually spend on some sort of results was a horrible failure.
So what do we get?  What do we get from the nearly trillion-dollar stimulus (much of which is ongoing, rather than one-time spending)?  A lot deeper in debt.  We propped up state governments a little bit longer so they could avoid restructuring their spending.  Public employee unions got to keep their pensions a bit longer, without any concessions.
From a previous post on this subject, here's a breakdown of one state - and its representative of the overall spending from the stimulus package:
here's what the breakdown was for the more than $3,000,000,000 Alabama got:
  •     health and human services 39.79%
  •     education 18.13%
  •     workforce 17.76%
  •     transportation and infrastructure 12.77%
  •     housing 2.2%
  •     public safety 4.7%
  •     energy 2.47%
  •     environment 2.17%
That's not atypical for most states. The bulk went to food stamp assistance, medicaid payments, TANF welfare, unemployment benefits, and so on. In particular Alabama saw a lot of the money go to black-targeted spending, such as the Tuskegee Institute which got $14 million in stimulus dollars. The University of Alabama Birmingham received $225,471.04 to study the “Etiology of Geographic and Racial Differences in Stroke.”
Its one thing to spend a huge amount of money plunging yourself into debt and get results, but to spend it all and get nothing but maintaining the status quo a bit longer?Its almost as if the people in charge saw the Soviet Union spend its self into collapse and thought "that's the economic plan we need!"  Because by the late 80s, the soviets weren't doing any major projects any longer.  They were struggling to just survive, and spending more and more to win the arms race.  They destroyed themselves in the process.
And that's what we have to face: a government run by mediocre thinkers at best with vague concepts of Keynesian economics but unable to even give results.  Their theorizing is so detached from reality we don't even get much work on existing projects - under 13% of the money for infrastructure?
Big government is unconstitutional but at this point, that doesn't even matter.  The constitution is just so much shredded packing material for yet another spending bill to be stored in.  But big government that doesn't even give us anything?  What's the point of that?  The Democrats aren't even any good at tax and spend politics any longer.

1 comment:

pdwalker said...

The Tax & Spenders have only one goal, and that is the complete destruction of the country as quickly as possible so they can rebuilt it according to their desires.

No other explanation makes sense any longer.