Opinion US needs a plan,not a stimulus
The 2009 economic stimulus package has come and gone. So,too,have the temporary payroll tax cuts of 2011-12
The 2009 economic stimulus package has come and gone. So,too,have the temporary payroll tax cuts of 2011-12. Most of the Bush-era tax cuts,in addition,have been made permanent. Yet the lasting effects of these policies have been meagre. The economy is still sluggish. Unemployment remains high Inequality of incomes is higher still. Whats more,the fundamental structural challenges to our economy remain. Deeply disruptive forces rapidly evolving IT,globalisation and environmental stresses are radically reshaping the jobs market. Decent jobs for low-skilled workers have virtually disappeared. Some have been relegated to China and emerging economies,while others have been lost to computerisation.
The results of these changes can be seen in two starkly different employment figures: since 2008,3.1 million new jobs have been created for college graduates as 4.3 million jobs have disappeared for high-school graduates and those without a high school diploma. These trends will only continue,and even become more sharply defined. But in the face of such immense challenges,Republicans continue to hawk their age-old remedy,demanding cuts in government spending,tax rates and regulation so that market forces can respond in due course. Democrats,meanwhile,push just as stridently for their familiar fixes short-term spending programmes like the 2009 stimulus package enacted during President Obamas first term.
Its time to move beyond such transitory and piecemeal policies. Our underlying economic problems are chronic,not temporary; structural,not cyclical. To solve them,we need a systematic long-term approach. Consider three priorities for this new,long-range perspective: infrastructure,energy and job skills. With a smart,ambitious strategy in these sectors we can encourage the creation of good jobs and begin to resolve huge problems of competitiveness and the environment.
Start with the countrys crumbling infrastructure. Obama has spoken eloquently about fast intercity rail,renovated highways,safe water systems and refurbished waterways and coastlines. Thats good and important. Yet the private money will move off the sidelines only when there are solid,long-term plans to deploy it. Calls for public-private financing arent enough. We need strategies linking federal,state,regional and local efforts that have a 10- to 20-year perspective.
The same goes for our energy system. We are in the midst of a short-term boom of shale oil and natural gas. Yet this expansion in energy production,driven in large part by two new techniques horizontal drilling and hydraulic fracturing wont begin to address our long-term energy needs. A clearly laid out federal progra-mme to support largescale solar and wind energy,electric vehicles and other smart technologies and backed partly by public money would unlock billions of dollars of private investments. It would secure Americas energy future and protect the environment,too.
The third area is job skills. Lets take a lesson from Germany,which boasts a low youth unemployment rate because of skills training. If Obama were to stop angling for more temporary stimulus and instead put forward sound programmes for job training,low-carbon energy and modernised infrastructure,he would most likely carry the public and eventually win the political battle.
The writer is director of the Earth Institute at Columbia University
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