Economy Debate

Robert H. Frank on GOP Budget Obstructionists, Economic Stimulus

Change the terms of the economic stimulus debate, says economist Robert H. Frank. Make it a discussion about saving money.

Most experienced policy economists—including several prominent former Bush and Reagan administration officials—agree that additional government stimulus would not only help the economy recover, but would also reduce budget deficits in the long run. Yet congressional Republicans resolutely disagree. With a solid majority in the House and enough votes to kill legislation in the Senate, they clearly have the power to get their way for now.

But why should they be permitted to do so without paying a political price? Advocates for stimulus need to find their voice. Herewith my proposal for some political theater that would help dramatize the absurdity of the obstructionists’ position.

Their basic claim is that if government spends more now, deficits will rise, and that will impoverish our grandchildren. With unemployment still hovering above 9 percent, this is wrongheaded in multiple ways. But obstructionists are unmoved by the standard Keynesian arguments that experienced policy economists take for granted. Repeating those arguments won’t help. Advocates for stimulus need to change the conversation, and the best way to do that is to focus on specific jobs that need to be done.

One example comes from the Nevada Department of Transportation, which describes a 10-mile stretch of Interstate 80 badly in need of repair. If the job were done today, they report, it could be accomplished for $6 million. But if it’s delayed for just two years, weather and traffic will eat more deeply into the roadbed, boosting the job’s cost to $30 million.

That huge difference ignores the fact that many workers capable of doing the work are currently unemployed. If we wait, we’ll need to bid many of them away from other productive tasks. Much of the equipment required for the job is also sitting idle. The required materials are now extremely cheap on world markets. And the interest rates to finance the work are at record lows. Even apart from the need to stimulate employment, the case for doing the work right away is a complete no-brainer.

A bit of theater could help bring such examples to voters’ attention. If I were directing this play, I’d assign the lead role to Vice President Joe Biden, whose everyman persona would be the ideal medium for its message. Act I starts with Joe calling a press conference to discuss long overdue infrastructure projects. Standing next to him at the podium are life-sized cardboard cutouts of Mitch McConnell, John Boehner, Eric Cantor, and Paul Ryan. Joe explains that he invited those leaders to appear with him in person, but they declined. (If they agree to appear, better still.) Joe outlines the case for doing the I-80 repairs right away. He then quotes recent statements by each leader denouncing any and all increases in government spending and asks whether they think we should postpone the I-80 repairs.

The cutout figures will remain silent, of course, but so would their real-life counterparts, since “yes” is such a transparently absurd answer to the question. Joe then asks, if they oppose doing the repairs now, do they think we should simply abandon I-80? He adds that he couldn’t imagine that they would, since the economy of Nevada would quickly grind to a halt without that artery. He then asks, which option—repairs now for $6 million or repairs in two years for $30 million—would result in smaller government deficits? Which option would better serve the economic interests of our grandchildren? Which option would do more to speed economic recovery? Stimulus opponents simply have no comfortable answers to these questions. Act I closes with Joe inviting the reporters in attendance to ask the same questions of the actual leaders.

Act II, the next week: Joe calls another press conference with the same format. This time, he focuses on the two major bottlenecks on his familiar Northeast rail corridor. Because of low clearances in two locations, double-decker freight containers cannot travel along that corridor. So they’re carried by truck, mostly along I-95, which is now clogged with freight traffic almost 24/7. The bottlenecks could be cleared at a cost of $6 billion, which would result in direct savings of $12 billion, not counting the implicit value of reduced noise and environmental damage from the extra truck traffic. Do the Republican leaders think we should make this investment? If not, why not?

Given the abysmal state of our current infrastructure, Joe could stage another act of this play every week for months. Over time, bigger crowds would gather, curious to know what new outrage he’d expose next. YouTube clips of the events would go viral.

If his examples were well chosen, Joe might get even Tea Partiers wondering about the wisdom of many of the proposed spending reductions. And even if the process didn’t produce any immediate movement among obstructionists, it might eventually cost some of them their seats in Congress.