Too little, too late?
I worry that my speech today is too little, too late. I worry that many Americans have already formed their opinion about the Recovery Act, based on the inaccuracies they hear from beltway pundits or from their elected officials.
Al Franken may be right -- after all, they say a lie is halfway around the world before the truth has put on its shoes. And this speech was given to an empty Senate Chamber.
But it's worth a look, as he talks about the success of the Recovery Act, and refutes the lies and distortions that are already out there.
The speech is the fastest half hour you'll spend this week, and perhaps the most valuable, but it is 27 minutes. For those who don't have that kind of time, here's the transcript.
And here are a few excerpts:
My friends on the other side of the aisle often imply that tax cuts would have been more effective than the Recovery Act. But perhaps they've forgotten that over one-third of the Recovery Act was comprised of tax cuts.
Unfortunately, the tax cuts were designed in a way so that many Americans didn't notice they were getting them. An extra twenty bucks on your paycheck adds up for you and the economy over time, but people don't notice like they do a big lump-sum refund. But here's the thing about lump-sum refunds-people like to save them, or pay off debts with them. When you get an extra twenty bucks in a paycheck, you're likely to spend it-giving the economy a boost.
This explains one unfortunate paradox of the Recovery Act-because the tax cut was well-designed, it helped boost consumer spending. . . but nobody noticed it. But that's not a failure of the Recovery Act policy, that's a failure of getting the message to American taxpayers.
And the tax cuts in the Recovery Act did their part. According to CBO, tax cuts for those in lower income brackets increased GDP by $1.70 for every dollar spent. But, for those who would argue that the Recovery Act should have been only tax cuts, consider this. While tax cuts for the lower brackets yielded a $1.70 GDP boost, tax cuts for high income earners and companies only raised GDP by 50 cents per dollar spent. And neither of these figures compare to the return on the Recovery Act's public works investments-an impressive $2.50 increase in GDP for every dollar spent.
* * *
Here's another project in Two Harbors, building a water tower. In addition to five crews of workers on the project, the tower tank is made of 723,000 pounds of American steel, and the rebar is another 33,000 pounds of American steel. So additional American workers made that steel. And more American workers mined the taconite. On Minnesota's Iron Range. More jobs.
I visited Two Harbors on September 6th, just a few weeks ago, and personally saw this project in-progress. Now, these folks aren't in suits and ties, shuffling papers. They're building bridges, roads, and water towers.
These projects are going to improve transportation, health, and safety for people in Minnesota. And because of these jobs, made possible by the Recovery Act, they will be able to keep a roof over the heads of their families, put food on the kitchen table, send their kids to college, and, yes, buy stuff.
* * *Everywhere I go, they thank me for the Recovery Act. They thank me for the teachers and firefighters, for the Workforce Investment Act funds, which they used to train people for jobs. For the highway extension or the wastewater plant or the funds for rural broadband or for weatherization of public buildings.
In fact, Michael Gunwald, writing for Time Magazine, said this: "the Recovery Act is the most ambitious energy legislation in history, converting the Energy Department into the world's largest venture-capital fund. It's pouring $90 billion into clean energy, including unprecedented investments in a smart grid; energy efficiency; electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S. The act will also triple the number of smart electric meters in our homes, quadruple the number of hybrids in the federal auto fleet and finance far-out energy research through a new government incubator modeled after the Pentagon agency that fathered the Internet."
A few weeks ago I heard a prominent conservative talking head on one of the Sunday news shows describe the Recovery Act this way. He said:
If I pay my neighbor $1,000 to dig a hole in my backyard and fill it up again and he pays me $1,000 to dig a hole in his backyard and fill it up again, according to the national income statistics, that's a $2,000 increment to GDP and two jobs have been created. The American people understand, however, there's no real wealth created in this kind of transfer payment.
How out of touch. How downright offensive. And yet this is why so many Americans believe that the Recovery Act hasn't created any jobs or just created jobs for bureaucrats.