Wednesday, February 11, 2009

Best use of stimulus?


The Fed's stimulus package is like the Blob—hard to define and hard to get your arms around. In part, this reflects the no-man's land in which the government finds itself, relying on best guesses, varieties of informed opinion, and trial and error to rescue our economy.

One thing is clear: stimulus funds must go to projects that can start now and have long-term economic benefit. A review of the 344-page "Ready-To-Go-Report," published by the U.S. Conference of Mayors, shows a mind-boggling spread of projects. Some of these are clearly worth funding.

On the other hand, the list is dominated by obvious earmarks, both humongous and tiny, as well as projects that may provide jobs in the short term but have virtually no significant long-term economic benefit. Our own valley's approach to the stimulus package is illustrative. The county is looking for $4.6 million in road repairs and reconstruction; it wants to upgrade essential infrastructure that has deteriorated. This is prudent, practical thinking.

Ketchum seeks $105 million, much of it for new construction: new and infill sidewalks, widening Main Street in South Ketchum, a new City Hall and completion of the Town Plaza. Worthy projects? At another time perhaps, but not when businesses are closing right and left, real estate goes begging for buyers, there is virtually no one to walk the proposed sidewalks, and more and more people don't have a basic job.

Instead, stimulus money should be directed toward projects that will strengthen our economy for years to come. These include a business incubator and associated programs, job training and re-education for the unemployed, a revolving loan fund for small businesses and conversion of existing real estate into affordable housing. These items appeared on some, if not many, cities' lists.

Ultimately, Idaho state government will decide how to allocate the funds it gets, but any jurisdiction that looks for stimulus money, Ketchum or otherwise, would do well to validate proposed projects in terms of jobs in the short term paired with long-term return on investment.

Jima Rice

Ketchum




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