It’s one of Washington’s worst kept secrets: President Barack Obama is likely to propose a new public works program in a post-Labor Day speech.
The idea is to stimulate an economy on the verge of another recession, upgrade the nation’s crumbling roads, bridges, schools and transit systems, and put unemployed Americans, especially the 6 million who have been jobless for six months or more, back to work.
It makes economic sense. The president should think big -- upward of $100 billion a year for at least two years. The temporary spending burst would increase short-term deficits, some of which the congressional supercommittee would have to offset to hit its $1.5 trillion, 10-year deficit-reduction target. But the program could ultimately lower deficits through reduced safety-net spending and higher tax revenue from the newly employed.
Economists have estimated that spending $1 billion on highways and mass transit increases gross domestic product by $1.6 billion. Only extensions of unemployment insurance and food stamp benefits are better at priming the pump, except they don’t create jobs that benefit the public.
Unfortunately, a major public works program doesn’t make political sense right now. Republicans have served notice that they intend to stand pat against new federal spending. After the painful debt-ceiling imbroglio that ended with a deal no one liked, least of all Standard & Poor’s, which lowered the country’s AAA rating, the president doesn’t need another debilitating fight this fall.
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Carpet Dallas technical writers
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