I’m not an economist; both my degrees included a basic economics component, I’m certified to teach econ at the high school level, I do my own taxes, and my checking account comes out balanced most months, but I don’t claim to be an expert on national and international economics issues. That’s not going to stop me from thinking and talking about it, and I know just enough about economic theory to be dangerous, so take anything I say below with the appropriate measure of sodium chloride.

Given the current condition of the US (and the world, it’s all one interrelated system, whether someone wants to admit it or not) Economy, and the route it’s taken over the last half-decade or so, it’s pretty clear that Smith’s “invisible hand” isn’t managing to steer the market toward equilibrium at present. This is one of those cases where Keynes’ interventionist theories seem reasonable to get things back on an even keel.

I’m not a big fan of deficit spending; like many on both sides, I’m uncomfortable with the country living beyond it’s means, and borrowing (via treasury bonds) from other nations who espouse unsavory policies and philosophies. I’d love for our country to operate with a balanced budget; and it is possible to do while still maintaining a useful social safety net, and provide for adquate defense and education.

However, you have to get yourself out of the hole before you can start filling it in; (and we’re in up to our nipples now) hence the Keynesian theory of short term deficit spending as an investment to spur growth. My ingrained sense of fiscal responsibility tugs at me hard when I consider it, but I think that the government’s got to intervene here and start injecting money into the economy to get things rolling, since the private sector is unwilling or unable to do so.

breaking here – this one’s long. Please click through to…

The key, of course, is where this money gets invested. The central tenant of the last administration’s policies, the “trickle down” theory (where taxes are cut for the wealthy, who will then have more capital to invest in production, leading to more jobs, for higher wages, allowing the worker to have more pocket money to spend on products, which increases revenue to the investors) isn’t working, because so many American companies are moving work overseas, where it’s cheaper to produce things (because of lower wages, and in many cases, government funded health care system lowering costs for employers abroad). American workers aren’t reaping the job benefits, except for retail sales of cheaply-made imported goods; the chain breaks.

The stimulus package currently being debated, while far from perfect, hits a lot of the right notes. The government can invest in a lot of necessary (but with low profit margins for private investors) projects that will create short term work to lower unemployment and give people spending power, but more importantly, will also provide long-term benefits to American economic health and quality of life.

I’m not just talking about obvious things like infrastructure and road repair (which will create jobs in the short term, as well as increase production capacity in the long term), but other stuff like providing funding for scientific research, ideally leading toward development of new technologies, leading toward new products and more efficient manufacture of old ones, investing in education in order to support the growth of the next generation of scientists and engineers who will apply new theories in the marketplace to improve quality of life, and investment in health care, particularly early childhood and preventive care; a healthy workforce is a more able and productive one.

This is exactly the same sort of thing that Roosevelt did to help end the Great Depression; programs like the WPA and CCC put people to work, and left us with a legacy we still make use of today, such as much of the National Park system, rural electrification, and numerous public buildings and bridges, which are both functional and aesthetically pleasing (even when they didn’t have to be). These New Deal programs managed to both pull the country out of adversity, and use the adversity to set the stage for the country to lead the world as the preeminent economic power for at least the next half-century.

While we’re not yet as bad off as we were in the early 1930s (and I hope we don’t get there), we can, if we approach the problem correctly, both pull ourselves out of the current economic downturn, while at the same time setting up the board for the future.

The first step is to actually look towards the future; some opponents of the current plans can’t see past next week (which is understandable for the average lower-middle class American fearing layoffs, but not for billionaire captains of industry), and advocate continued exploitation of dwindling fossil fuel reserves in order to provide relief for fuel prices (which is by no means a guarantee). This philosophy is wrongheaded for several reasons, most importantly the fact that it completely ignores any efforts to reduce fuel consumption, it merely replaces imported fuel with domestic sources, and pays little more than lip service to investment in alternative energies; and adds a heaping spoonful of xenophobia as well, which doesn’t help anybody.

Looking to the future means investing in science and reasearch into technology that let’s us use the fuel we have more efficently (we already have quite a lot of this tech, we just need to get it to market), and more importantly, develop new, renewable, clean energy sources for the future. That second one’s a long-term process, but a necessary one; there’s only so much oil left, and we use way too much of it. Whoever manages to come up with the tech that makes petroleum unnecessary is going to hold all the cards in the next big poker game; let’s invest in science, technology, and education in that direction to make sure that that idea comes from an American. There; that’s your “Rah Rah, USA #1” selling point. You’re welcome.

To summarize, assuming it’s applied responsibly and with an eye toward future development, this big deficit spending package can work. It’s distateful, but less so than were the practices that got us here, and it’s more likely to clean things up than more of the same old policies. Ifwe invest wisely, we’ll get our investment back with interest in the form of improved infrastructure, technology, environmental conditions, and quality of life.

And finally, to those who are now complaining about how much this is going to cost: Spending 10 billion a week on a war with no clear objective or return on investment wasn’t a problem for you; why should something like this, which actually offers the possibility of return, bother you?