Science Sunday: How About a New Deal Instead of an Old Trickle?

The federal plan to stimulate the economy ought to work for the rest of us, instead of just for Wall Street.There has been a long, sub-freezing cold snap in Wyoming over the last couple of months. In front of the house of a friend of mine, the water main under the street broke from the stress of subzero temperatures, flooding his basement and those of about 15 of his neighbors. He has been surprised to discover that his homeowner’s insurance will cover only $5,000 of his losses — not enough for his carpets, never mind his music collection, computer and so on — and the town has so far refused to step up with any assistance for those affected.

Ho-hum. Another tiny personal tragedy. But this incident illustrates a problem that is growing around the country — the aging of the infrastructure that delivers clean water to our homes and businesses, then takes away the waste to treat it so that it’s clean enough for people downstream to use. Unless some serious money is spent, water mains across America are going to make themselves heard. The city of Chicago alone, for instance, is currently spending $40 million a year on this problem.

In 2002, the Environmental Protection Agency produced a “Gap Report” that looked at the needed upgrades for water infrastructure projects across the country compared with the funds available to pay for them. They found that between the years 2000 and 2019, the mid-range estimates of needed capital expenditures for clean water delivery and waste water removal and treatment was just over $500 billion dollars. A half-trillion dollars over 20 years.

Federal funding currently allocated for that purpose is $13 billion a year, or about half of what’s needed.

Which brings us to the curiously constrained debate regarding the economic stimulus package currently being rushed through Congress: $150 billion at last count. The money will be distributed from the Treasury in $600 bursts so that the recipients can head off to The Gap to spend it.

While I can use $600 just as much as the next guy (and more than some), with the wide variety of capital and infrastructure needs in this country (water is just one — you could also include wetlands, for instance, or national parks,  or endangered species recovery, roads, public transportation, or many, many others), you have to wonder why there isn’t discussion of a “long-term stimulus plan to build roads, utilities, schools and housing.” Reportedly Senate Majority leader Harry Reid (D-Nev) supports such a plan.

In short, a New Deal-style program that stimulates jobs directly, rather than one that relies on discredited trickle-down theories of wealth creation to “stimulate” the economy. The Democrats could return to those “roots” that are being so much ballyhooed in this election season, roots that would actually create some good jobs. There is a brief, clear and coherent mainstream economic argument for this outlined here, so I won’t repeat it.

But this is not voodoo economics. It works. It’s got a long, successful history. Rather than spending $600 at The Gap so that Gap stockholders can reap a larger dividend, investing a little more maybe in The Gap stores, creating jobs for a few more $7-an-hour store employees and spending some of their government windfall lobbying against an increase in the minimum wage, why not have the Department of Commerce hire and train some $20-an-hour guys to fix the water main in front of my friend’s house, thereby cleaning up the nation’s water, saving the flooded-basement residents thousands of dollars each, reducing insurance risks and solving some of the real long-term investment needs in the country?

I’m just asking, is all.

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Dan Whipple

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