But back to the Journal. This is also good to know:
Lobbyists for U.S. footwear makers and retailers want lawmakers to wall off their drive to scrap import taxes on cheap shoes from a competing push to lower tariffs on all imported clothing and textiles.
The shoe lobby sent a letter to congressional leaders Tuesday asking for a stimulus provision abolishing the import tax on synthetic, fabric and canvas shoes. The American Apparel & Footwear Association, the Footwear Distributors and Retailers of America and retail footwear companies say the tax can reach 67.5%.
Is it me or will making it cheaper for sweatshops in China and Indonesia to export shoes to us most definitely not help create jobs in the U.S.? Good for the WSJ for pointing out this ridiculousness, which, because it’s “free trade,” will probably find its way into the bill anyway. Anyway, we could use those tax dollars right about now. We’ve got a $2 trillion deficit to pay for!
Of course, not all the lobbying efforts are wasteful. Here’s one that would be productive:
But the firms struck pay dirt Tuesday in the Senate Finance Committee, winning a 10% tax credit for investments in current-generation broadband technology, and a 20% tax credit for investments in “next-generation” broadband, not only in rural and underserved areas but any residential area.
The WSJ pairs that story with one questioning whether all the spending is going to be enough.
All else being equal, Mr. Simonson estimated that the plan as currently formulated could create 1.8 million construction jobs in its first year. But the sector has shed 899,000 jobs from its peak in September 2006.
“There’s going to be such shrinkage in private construction projects — offices, hotels, retail, manufacturing — and also declines in state and local funded projects that I’m guessing the stimulus will just slow the decline,” he said.
Goldman Sachs economists say $1.2 trillion in fiscal stimulus is needed over two years to offset the sharp private-sector contraction.
And it’s important to note, as the paper does here, that all this spending will have effects that will in part offset any positive impacts:
The one thing that is certain to flow from the stimulus is a large increase in the federal debt. Large government budget deficits are showing signs of starting to nudge interest rates on government debt higher, from very low levels.
If that persists, it could eventually damp some of the stimulus-plan’s benefits. Higher government rates raise the cost of borrowing not only for the Treasury, but also for many private-sector borrowers, since corporate bonds and mortgage bonds are often benchmarked to Treasury yields.
Now let’s turn to the Washington Post’s A1 effort.
It has a good report on how even some Democrats are questioning the pace of the moves. This is a very interesting plan and one a lot of people could get behind:
In testimony before the House Budget Committee yesterday, Alice M. Rivlin, who was President Bill Clinton’s budget director, suggested splitting the plan, implementing its immediate stimulus components now and taking more time to plan the longer-term transformative spending to make sure it is done right.
“Such a long-term investment program should not be put together hastily and lumped in with the anti-recession package. The elements of the investment program must be carefully planned and will not create many jobs right away,” said Rivlin, a fellow at the Brookings Institution. The risk, she said, is that “money will be wasted because the investment elements were not carefully crafted.”
And this seems about right to me—so much of the program seems to be going into extant programs at the expense of investments like high-speed rail that will transform the economy:
For some House Democrats, the problem is less a matter of balancing the short and long term than a shortage of focus and will on the part of the administration. Their disappointment centers on the relatively small amount devoted to long-lasting infrastructure investments in favor of spending on a long list of government programs. While each serves a purpose, the critics say, they add up to less than the sum of their parts, and fall far short of the transformative New Deal-like vision many of them had entertained.
And it quotes a Republican saying that only $30 billion of the stimulus plan is for roads and bridges, which are seen as relatively quick ways to boost the economy and help long-term productivity by fixing our decaying infrastructure. The Post presents a pretty compelling case that a ginormous spending bill like this needs to be done with more care. Splitting it into two spend now/spend a little later bills seems like a winner.