Policy makers are wringing their hands and lamenting the growing opposition to more deficits. There is, to be sure, a problem developing with Congress and the people on more deficits for the economy. Deficit hawks are on the rise. Why, you ask? Consider the situation.
The Fed and policy makers have wasted a lot of political capital by not obtaining better results with the bailout and stimulus programs by now. Serious money has been spent and look at the results. Too many are left wondering. What this means is we may not have enough political capital left to do what needs to be done, assuming, of course, we can agree on what that is.
TARP and Fed policies have been very expensive and most Americans do not understand what they have accomplished or where the monies have gone. These are serious issues. Even those wanting to be informed cannot readily get the information they would like on what and how the programs have done. The Fed has had two Freedom of Information Act lawsuits pending against it for hiding data and where are clear income statements for TARP I and II? For most Americans, these areas are entirely too murky for comfort. They worry -- rightly, many would say -- that the wealthy on Wall Street and elsewhere have managed to line their pockets from these programs and that cuts seriously into the goodwill that government has left and the willingness of the people to support further deficits.
I do not mind running larger deficits in these kinds of times, but we need more understanding of what is happening and why the results we have gotten so far are not better. Also, I think we need better programs as well. I'll explain.
The original stimulus program, aside from some of the tax relief afforded, is a disaster; most projects either have not been started or are too far from complete. I think we have maladministration here and it has prevented some of the improvement in the economy we would like to have seen by now. Also, a lot of the projects in the stimulus program turned out to be obvious Democratic pork or for private interests. All of this injures the political capital needed to get things done, and alienates many. The goodwill of the stimulus program with the public is damaged.
However, it is absolutely crazy to have so very many unemployed and our public goods infrastructure needing some $3 trillion plus in repairs, according to the American Society of Civil Engineers, at the same time. We cannot seem to get the two together effectively. It is patently ridiculous and unfair to us all.
We need to streamline the laws governing such projects, simplify the projects to be more easily labor intensive and get on with the repairs and the maintenance needed. The program should be treated like one for the mobilization and preparation for a war. Then, deficits in this quarter would be fine for most people, but regrettably too much of the original stimulus program is behind and then there is the pork, so people are upset. Also, they do not see enough results and grow suspicious, and that injures the goodwill associated with the program. We need to retroactively cut the funding for the pork and special interests, add many more new, simplified and honest public goods projects and then get on with it. Where has America’s “can do” spirit gone here? Have we checked and balanced ourselves into paralysis?
Meanwhile, the cost of repairing the sagging infrastructure continues to rise daily. Governments at all levels over the years have spent the maintenance and repair monies on new hires, expanding the roles of government and on similar endeavors instead -- thereby making a mess of the infrastructure. Again, this inspires public ill-will and a lack of confidence in government which is needed now.
Presently, we still might have a chance to pull it all together, take care of a lot of the unemployment problem and fix the infrastructure in significant measure, but we are blowing it big time and destroying, instead of building, political capital with the American people. It is hugely stupid. Looking at the progress and the pork involved, many Americans feel, like me, that we were sold a bill of goods.
What we need is a serious, new public information campaign by the federal government to set out the details of the programs, admit its mistakes, explain how it is fixing them and what people should expect from the programs and their costs in the future.
And to think policy makers are anxious about why so many have become deficit hawks, and they do not understand why. The rise of the hawks is in truth largely a vote of no confidence in the solutions and programs that have been adopted, in light of their costs, where the money has gone and where those programs and the economy are now. We just might have blown our chances here. The problem needs to be aggressively and quickly addressed by the Administration, but I don´t really see that happening any time soon.