In the big picture this is not a major suggestion. Think of it as something that can be done with no downside and long term benefit.
I personally don’t think a stimulus package of checks or rebates to the consumer will work. I believe consumers are so beaten up and fearful of the future that they will put it in the bank. Of course 20 years ago that would have been a good thing, These days banks don’t appear to be lending those deposits. So there is no primary or secondary stimulus impact.
Instead, having the government spend money on public works, which in turn creates jobs, will have a quick and positive economic impact. As much as it pains me to write those words, a drowning economy can’t worry about its form as it tries to get back to the surface. Sometimes you have to win ugly.
Private money is going to stay on the sidelines because we all know that there are unbelievable bargains available out there. Our money is waiting to go to equity and debt where we think we will get outsized returns. If and when those returns happen, money will come back in as new capital investment. Until then, the only liquid investor willing to put non current assets on their balance sheet is the government.
My little idea on where the government should spend money in public works projects ?
Parks and Schools.
Maybe this is obvious to those in the coming administration, but I think we should be buying up foreclosed homes in areas that have been overwhelmed with them . Tearing them down, and replacing them with parks and schools.
Of course municipalities will have to get involved with eminent domain, but a guess is that if we buy occupied homes in communities with a large base of foreclosures, we would be rescuing many homeowners from huge declines in the market values of their homes. Something many will not be upset with.
The upside of this program of course is that not only will you be improving areas that have come across tough times with parks and schools that will act as attractions to potential new residents, but the inventory of homes will be reduced as well.
Two years ago creating parks and building schools was a local endeavor that few municipalities could afford. Today they are an investment that can bring suffering communities emotional and financial relief
On to the subject of the Inauguration. Four years ago I suggested that the Bush administration cancel the inauguration parties and instead ask corporations to donate that money to the victims of the Tsunami.
Its fair to ask where I stand on the coming inauguration and whether parties should be canceled and money sent to the victims of the tragedy in India.
When the tsunami hit, it was a devastaion of epic proportions. Raising money for the survivors and rebuilding was a responsibility we as a nation accepted. We had telethons, events and fund raisers to try to help. The unfortunate situation in India, at least as it stands today, is not one that can be helped by contributions to the survivors. Thoughts and prayers, yes. Potentially support for anti terrorism programs, yes. But re-routing funds from anything to India, as least as far as I am aware, won’t help survivors or hostages at this time.
In addition, the 2005 inauguration was President Bush’s 2nd term. That it and of itself makes it a completely different set of circumstances.
That said, the coming inauguration is not off the hook. Some of the costs for housing, events and tickets I have seen and been offered are absurd. President Elect Obama should recognize and address the fact that in these economic times, corporations that are laying off people or getting bailout money should not be spending money sponsoring inaugural events.
Is there any doubt that the next “bailout scandal” will be banks and other bailout recipients sponsoring Inauguration events or spending boatloads of money to attend ?
Note to PE Obama, have your staff scrub the sponsors list and look for the words “bank”, GM, Ford and Chrysler and then google all sponsors for the word “layoff”