As the construction industry and the nation attempt to crawl out of a very deep economic hole, there is a maelstrom of competing political agendas: economic stimulus, proposed federal bailouts of an ever-widening group of companies and industries, health-care reform, global-warming initiatives and war strategies and funding, to name just a few. But with the national debt now standing at a staggering $12 trillion, an annual federal budget deficit hitting $1.36 trillion and the federal business bailout tab running $12 trillion—just for starters—there is no money for some or all of these initiatives unless the U.S. just prints a lot more, which is not a wise option.
The stumbling Obama administration seems incapable of finding its way through these initiatives. The “irreversible catastrophe” is not global warming, as President Obama said on Sept. 22 at the United Nations, it is bankrupting the U.S. with out-of-control spending.
So what is the answer? One only has to go back to Bill Clinton’s successful 1992 presidential campaign against George H.W. Bush, who was largely believed to be unbeatable. Clinton and his political strategist, James Carville, beat him by pounding on the basics: “It’s the economy, stupid,” they said in the midst of a recession milder than today’s.
The economy is everything, but every part of it is not necessarily worth or capable of being saved. Capitalism has a way of pruning its own dead branches and growing new sprouts. Socialism tends to sustain what is there—good, bad or indifferent—and stifle innovation. Having the U.S. government as part owner of banks, car companies or even newspapers will not advance the cause of democracy or economic growth. There are tremendous conflicts of interest.
Early assessments of the economic stimulus produced by the $787-billion American Recovery and Reinvestment Act show the construction industry is leading the way in activity. Only about $130 billion is slated for construction, but even the relatively small amount of money already flowing has produced or saved 133,000 jobs in construction. That limited stimulus measure does not include the economic velocity created in related industries or communities nor the benefits derived from the valuable long-term investment in infrastructure. But billions of dollars of bailout money for financial firms and executives that caused the financial crisis was not a suitable public investment.
Americans know the Obama administration and Congress have lost their way in setting priorities; the polls show it. Fundamentally, the public cares first about the economy and the ability to work and provide for families. Everything else is secondary.
If politicians and economists can turn the economy around with sound cultivation, there will be much more money to tackle other problems later, including planting new seeds for U.S. infrastructure development.