Political Capital Stimulus Spending

The stimulus sucks. I hate the House bill. Maybe the Senate one will do better, and since they both have to be reconciled to each other, maybe we'll be surprised by the political alchemy. I hate the Senate more than I hate the House, so you have no idea how much it chafes me to write this.

The current form of the "stimulus" is a complete waste of money. The tax cuts are just fucking stupid. A lot of the Democratic initiatives in the bill are fucking stupid, too. As far as I can tell, most of the spending is in the form of political caricature. Hundreds of billions going toward idiotic Republican tax cuts, and more hundreds on retarded government programs, with very little stimulative spending, with a large chunk going to states simply to keep them solvent, I suppose.

$42 billion, total, for transportation infrastructure development and expansion, outside of the state funding, which as far as I know does not have any sort of provision that would force states to augment this with their cut. Killing me here. Telecommunication and transportation projects should be half the entire stimulus, and instead we're talking about 5%? The proportion of junk/good stuff should look like the exact opposite of what we're getting from the House. I don't understand the necessity for that.

I'm sniffing a strategy here, and if I'm wrong, I will totally own up to simply being an apologist for Dems. I think that's fair, but I will defend myself by saying I don't agree with the strategy.

Let's say the economy can handle $400 b investment of infrastructure over the next two years. We just passed an $850 b or so bill which accomplishes very little to this end. So, best case scenario, the Senate axes $600 b of the stupid shit, gets a much smaller number, and is publicly prodded to double the stimulus specifically for infrastructure back up to that usable $400 b.

If it goes down like this, Republicans say they blocked the most egregious Democratic spending, Democrats get to say they blocked more Republican tax cuts for the wealthy, and both sides get credit for the robust infrastructure money. Republicans win because people think they are a strong opposition party asserting conservative values, Democrats win because people think they are an effective majority party with liberal bona fides, and Obama wins a victory for bipartisanship.

(He'll need all he can get when they eventually have to nationalize the banks in the Swedish model sometime this year. I don't think there's enough job creation out there that will buoy home prices, so I think this nationalization event is inevitable. This will probably be the big story out of this mess, so obviously it deserves treatment later on. )

The problem, as I see it, both in reality and in my pet theory, is that they started out with far too little of the easy win stuff. $42 billion for transportation? Don't get this at all. My only guess is that the $30 b in highway stimulus funding is probably the cap on smart spending in this area, but that seems low. If only there was a very likable Republican as the Transportation Secretary that could sell appropriations committees on the benefits of more investment in rail and other transit. With the construction industry taking such a hard hit, it would make sense to me to spend more money building shit, so I hope we're looking at more than transportation.

I'm almost 90% sure I'm giving all of the players in this too much credit, though it is my hope that I haven't shot too far. It's far too early to tell what the result will be, and I think there will be errors in judgment, but I really do think there's a plan here that will be evident later--Goddamn I hope there is, anyway.

This is here and now, though, and when we get to the other side of this mess, I don't think this bill will be much of a factor in the history of the recovery.