Tuesday, February 10, 2009

Stimulus or Sustained Investment?

According to my friends on Capitol Hill and my many colleagues and clients who work for federal agencies, stimulus money will likely be spent on "shovel ready" projects, or those that are already planned and ready for a contractor to pick up a shovel and go.  Many of the projects are infrastructure- and building-related, which is normally a good thing for my industry.  
However, I'm concerned that in our hurry to boost the economy, we are not really paying attention to the long- term projects that will help sustain us yet may not be quite ready today.  Take the smart grid for example.  Or what about alternative energy investments that don't quite have the payback to compete with clean coal this year, but could in five.  And if we spend all of this government money now, and in one shot, will we have the ability to make investments ten, twenty and thirty years from now on projects that may be a better bang for our buck?  
It seems to me that a smoother, slower investment over time (so we can see results and course correct) is a little more sane.  This sense of urgency we have to "fix" the financial markets and "fix" the economy... isn't that need for quick results what got us into trouble in the first place?


Green-A said...

I agree! I keep saying we should build equity with this stimulus plan - if we're leveraging the debt of future generations we need to leave something of lasting value. unfortunately, we don't all have the same ideas about what has value ;-) I, for one, think a smart grid and transit in every major metropolitan area would qualify, but due to the public process, probably neither qualify as quite 'shovel ready'.

smf said...

I couldn't agree with both of you more. However, we now have 789.5 billion reasons to look for ways to make this work. A good article in toady's WSJ: http://online.wsj.com/article/SB123440185965175441.html?mod=djkeyword

Perhaps we need to think of this as an incredibly huge "allowance" that will enable us to focus on other areas that need further development - not stimulus. Stimulus implies that there is something already chugging along, just needing a boost. I would argue that new innovative developments would be hindered by the hand of governmental aid. Any bill passed by the government is going to be less than perfect.

Millennial 4 Earth said...

Check out an interesting op-ed piece about how the stimulus needs to be arranged in such a way as to prevent encouraging sprawl (as occurred in the post-WWII era): http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/02/ED4C15KI1B.DTL

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