Fixing our infrastructure will jump start the economy!

The unemployment rate surged to 5 percent in December as the economy added a meager 18,000 jobs, the smallest monthly increase in four years.

The private sector actually lost 13,000 jobs.

The swift deterioration in the job market indicates that troubles once confined to real estate and construction are spilling into the broader economy, threatening the ability of American consumers to keep spending.

In response, President Bush has proposed making his high end tax cuts permanent.

This is not surprising. Cutting the taxes of the wealthy has been the singular policy proposal of this administration for any and all problems.

When President Bush was running for office in 2000, he proposed high end income tax cuts, the elimination of the inheritance tax, and cutting investment income taxes because the country was running a projected $5.2 trillion dollar surplus. He proposed a $1.3 trillion cut (25% of the total projected surplus) because he: "...trusted the people, not the government."

Shortly after he assumed the Presidency, in March 2001, the economy fell into a recession. But Bush's response was the same medicine-high end tax cuts- for an entirely different ailment.

In May 2001, as gas prices began to soar for the first time under his administration, President Bush proposed, you guessed it, high end tax cuts as the solution which Congress ultimately passed

President Bush, and all of the Republican candidates competing to replace him, are wrong when they argue that making tax cuts that have disproportionately benefited the wealthy permanent will stimulate the economy.

The 2001-2003 jobless recovery and the relatively anemic job growth that followed suggest that high end tax cuts are not an effective stimulus precisely because the wealthy are the least likely to immediately spend their tax cut windfalls, although that is precisely what is needed to jump-start the economy.

Making high end tax cuts permanent, moreover, would not increase spending this year when a stimulus is needed. It wouldn’t affect the economy until 2011 since that is when the tax cuts are set to expire.

Making the tax cuts permanent, however, would increase the country’s deficit for years, increasing interest payments on the debt that will have to be paid by future generations and reducing the funds available for needed social investments in education, job training, research and development, science, medicine, medical care, energy and infrastructure.

On Sunday the New York Times called for an economic stimulus package to revitalize the failing economy.

The Times argued that middle and low (income or payroll) tax cuts would be effective since that money would be spent immediately.

Equally if not more, effective than targeted tax cuts, would be a plan to significantly increase investment in the nation’s failing public infrastructure — highways, bridges, rail systems, water works, public schools, port facilities, sewers, airports, energy grids, tunnels, dams and levees.

California’s experience in early 90’s demonstrates what a well-timed shock of public spending can do for a depressed economy.

California was mired in a severe recession when an earthquake rocked Southern California in January, 1993. It was the costliest in U.S. history. Sixty-one people died. More than 9,000 were injured. The quake destroyed more than $15 billion of property, including 21,000 housing units. It devastated highways in the nation's most auto-dependent region.

The federal government responded with disaster relief. The immediate infusion of $9.5 billion in emergency assistance and public works funds revived the depressed economy. Less than six months after the earthquake, Southern California's economy was growing and generating jobs for the first time since 1990.

The tragic collapse of the Interstate 35W bridge in Minneapolis, while not a natural disaster like the Los Angeles earthquake, is the canary in nation's failing infrastructure mine. Our nation's infrastructure is crumbling.

A study released in May by the Urban Land Institute and Ernst & Young found that 83 percent of the nation’s transportation infrastructure was not capable of meeting the country’s needs over the next 10 years. The American Society of Civil Engineers, in its latest national report card, gave transportation infrastructure a D. It estimates that government should be spending $320 billion a year over the next five years — double the current outlay — just to bring up to par what already exists.

A public infrastructure investment program would address one of the nation's biggest problems, create high wage jobs, save lives, decrease business's cost of transportation and stimulate the economy! If tied to local hiring and job training, it could help address the unacceptably high rates of black unemployment which are rising as the economy slows.

Other ideas should be on the table as well. The nation has a shortage of low and moderate income housing particularly in fast growing suburban areas experiencing labor shortages. We are falling further behind our international competitors in developing a high speed communications infrastructure. And we lack modern high speed train and energy efficient (light rail) transportation systems.

Before we waste valuable national resources by making President Bush's inefficient high end tax cuts permanent, we should examine the more effective economic stimulus tools in our policy tool box. It is after all, our money (and country for that matter) and as someone once said, in a different context, we know better than a lame duck politician what to do with it.