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December 4th, 2008
That’s economic stimulus you can believe in, probably

President-elect Barack Obama and leaders in Congress are developing a multi-billion dollar green-jobs program to both stimulate the economy and put in place the groundwork for a more energy-efficient country.

The New York Times reports money spent on the program will probably include funds for “the weatherizing of hundreds of thousands of homes, the installation of ‘smart meters’ to monitor and reduce home energy use, and billions of dollars in grants to state and local governments for mass transit and infrastructure projects.”

The green aspect of the stimulus plan alone will cost at least $15 billion a year.

The green-jobs program will not, however, be financed with pollution credits bought by power generators and other carbon emitters as President-elect Obama had proposed while on the campaign trail. Instead, the cost of the program would be added to the ever-growing national budget deficit. Seemingly, the time it would take to legislate on a global warming bill, which could potentially fund such a green-jobs program, would take too long to have the immediate impact desired on the current economic rescission.

President-elect Obama’s green-jobs program is not unlike President Franklin D. Roosevelt’s New Deal initiatives in the 1930s, specifically the Works Progress Administration, which sent out of work Americans throughout the country to modernize cities by putting in place, among other things, paved roads and waste water systems.

But, the New Deal did not end the Depression. Simply, its programs – many of which were ineffective – helped to sustain Americans as many were out of work. The New Deal also greatly increased the national debt – just as President-elect Obama’s green-jobs program will do. And ultimately, it was war time manufacturing during World War Two and the subsequent emergence of the U.S. as the dominate world power that ended the Depression.

At the same time, as forty-three of 50 states are facing budget deficits, the National Governors Association (NGA) has called for an estimated $176 billion of President-elect Obama’s proposed $500 billion (sometimes noted as much as $700 billion) stimulus package to go to local infrastructure improvements and state Medicaid programs. Some $136 billion worth of infrastructure projects, the NGA estimates, have already won regulatory approval and just need federal dollars to get going.

The U.S. Conference of Mayors has also estimated that 4,591 infrastructure projects, at a cost of $24.4 billion, are ready to go.

According to the Boston Globe, “Investing in infrastructure can boost a sagging economy, by adding an estimated 30,000 to 40,000 new jobs for every $1 billion invested. The projects are place-based, giving an advantage to local workers, and producing positive ripple effects in the local economy.”

The problem is that public works projects typically take years to get underway. Moreover, as President-elect Obama is hoping to create a new green industry – including infrastructure updates – that will create employment opportunities for out of work Americans, a massive training effort will need to be undertaken in order to effectively put people back to work. That, too, will take time. While there are certainly infrastructure needs, fulfilling them may not have the immediate economic impact that President-elect Obama wants.

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