Senator Judd Gregg (R-NH), ranking member of the Senate Budget Committee, makes the important point in today’s Wall Street Journal that any economic stimulus legislation should emphasize improving long-term U.S. productivity. Given the economic and budgetary stakes, let’s put the money where it does the most good.
Senator Gregg’s comments on infrastructure and taxation are right on the mark. From “How to Make Sure the Stimulus Works“:
[If] we’re going to have an infrastructure feeding frenzy, make sure government builds public works that will make us more productive as a nation. We all love swing sets and water parks, but recovery is not about soccer games or Main Street beautification. This is about bringing the nation out of this recession in a manner that makes us more competitive in the international market. We need things like roads, bridges, mass transit capital expansion, integrated IT in public industries like health care, and military recapitalization. The test should be simple: Is it necessary and will it make us more competitive as a nation?… [We] must cut taxes for job creators. This is one thing Republicans did when we had the magic wand, and it worked. The growth in tax revenues from 2002 through 2007 were some of the largest in history. The tax system became much more progressive, with the top 20% of income earners paying 85% of the taxes — a rate much higher than during the Clinton years — all while keeping capital-gains rates low.
We’d guess the idea of reviving the WPA “Federal Writers’ Project” to pay out-of-work newspaper reporters to chronicle his brave new age would not be a priority under this approach. Yes, some people are seriously proposing it. Give us a viaduct instead.
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