'Tis the season for buying each other cheap plastic gifts that will be swiftly relegated to the back of a closet. It's a Christmas tradition, after all. And all too often, we spend tax dollars the same way: just mindlessly throwing money around because, well, that's just the way it is, and we never do anything about it.
By all accounts, our economy's downward spiral continues. We lost more than a half-million jobs in November alone, and companies are cutting the hours of employees that hang on to their jobs. And, of course, those who lose their jobs also usually lose their health care, so we will probably be dealing with a huge increase in uninsured workers.
All of this is very bad. Things will only get worse if the major auto companies collapse - that equals massive job losses that we probably can't sustain right now. However, it appearsˇCongress is close to a Band-Aid to at least keep things afloat until the new administration takes over in January. But the crisis also presents something of an opportunity: a chance to rethink how we spend our public money.
It's no secret that we waste vast sums of money on pretty worthless programs. When times are good, we can overlook that waste fairly easilyˇ- but notˇnow. We've got to focus on projects that produce real value for the dollar, not just ones that help line someone's pockets.
In my lastˇcolumn, I touched on our disastrous "war on drugs." That's an excellent example of a place where we need to immediately begin rethinking our approach. We're wasting money and getting nothing in return.
"Defense spending," that nebulous category that represents everything from the
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Pentagon's budget to the cost of maintaining nuclear weapons to the money required to run Veterans Affairs, is another opportunity to begin spending our money more intelligently. We spend nearly as much money on defense as the rest of the world combined - much of it on expensive experimental weapons projects that we don't need. If we're willing to take a hard, honest look at our defense budget, we could save huge amounts of money and put those funds to better use.
On that front, the Obama administration-in-waiting has been sending some positive signals over the past few weeks. Plenty of ink has been spilled about the president-elect's choices of Sen. Hillary Clinton as secretary of state, Gen. Jim Jones as national security adviser and Robert Gates to continue his role as secretary of defense. Most of the discussion has centered on whether Obama is backing down from an aggressively liberal foreign policy or perhaps looking to unify those in opposition to neoconservative foreign policy. But we've generally overlooked Obama's intention to begin cutting the military budget and how this new national security team fits that goal.
The New York Times ran an article about a week ago focusing on how Jones, Gates and Clinton have all bought into Obama's goal to re-route military spending to more useful areas. If true, having these three on Obama's side will provide him important political cover, enabling him to aggressively cut military spending. Jones is a former NATO commander, Gates has served multiple Republican presidents as defense secretary, and Clinton is part of the more hawkish wing of the Democratic Party. Having such a distinguished team backing a spending cut will make it much easier to more intelligently spend our tax dollars.
But it's not going to be enough to shift money around. The federal government is going to have to increase spending to pull us out of our slump, and the budget deficit is going to rise. Under these circumstances, that's not a bad thing: There's no other way around it. And on this front, too,ˇObama has been saying some encouraging things.
In his most recent address to the nation,ˇwhich is available onˇYouTube, Obama laid out his spending priorities - and they are good ones, focused on projects that produce long-term value, not just a brief spending bump.
Obama's plan focuses heavily on infrastructure investment - what he calls the biggest program since the interstate highway system. Here in the Twin Cities area, we know firsthand the problems caused by crumbling public infrastructure. The new spending gives us the chance to simultaneously create jobs while giving us the roads, bridges and buildings we need to continue prospering in the decades ahead.
But the federal government is going to have to give individual states a hand to make this work. States can't deficit-spend, so as tax revenues fall, the state governments need to make up for it by cutting spending. The federal government doesn't face such constraints, so they will have to play the lead role in getting the spending started. We can focus on new schools, better roads, more public transportation, while creating jobs at the same time - we just need Washington to commit.
Unfortunately, we still have to wait another month and a half. Until the new Congress and administration take over, we're just going to be wasting recovery time. I'd like to think things can't get any worse between then and now, but I could be wrong.
