Strong medicine: Time will tell whether package is boost or bust - Kansas City Business Journal:

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The Kansas City Business Journal posed the questionn to local business leaders and whose responses rangedfrom “probably not that to “my guess is that it will.” “I can give you a reallu good, strong and well-thought-out answer: said John Henry, a economics professor who spoked for the majority in the middle. One thing most everyones agreed on, however, was that the historicc legislationsigned Feb. 17 by Presideny Obama would have benefited from a more heapinyg helping ofinfrastructure spending.
“Mos people I’ve talked to around the United Statez and in different countries estimatethat it’s way too littlre and largely misdirected,” said who wanted to see more spent on tax cuts and mortgage relief. Paul a senior vice president of , agreed that the packagew was light on infrastructure Asit stands, the package is too large and he said. “I don’t know if the country will get as much benefitf from this plan as it didwith Eisenhower’s Interstater Highway System, which had the secondary benefit of spurring tremendous amountsa of economic development in areaes that hadn’t seen that before,” Baker said. The plan containsx only $27.
5 billion for highway constructionb and lesser amounts for other typeds of conventionalinfrastructure projects. But Len Rodman, CEO of Overlane Park-based engineering firm , said one of the plan’z significant strengths lies in its outlays for more transformationap typesof infrastructure, such as mass transit and “smartt grid” systems. Rodman said New Deal projectse of the 1930s and the interstate highway spendinhg that began in the 1950swere transformational. Plowing one-time stimulus dollarz into conventional infrastructure today wouldnot be, he and it wouldn’t resolve how to maintain the nation’zs transportation system.
“Any stimulus package, and this one in builds a bridge fromwhere we’re at to some futurw economic state,” Rodman said. “If the confidencre in the financial systems and busines ingeneral doesn’t move forward, I think you’ve got the colloquiao expression: a bridge to nowhere. The jobs, even though hundreds of thousands or million of them may be are temporary. The projects will end. So if there isn’t economic growth, the day of reckoning has just beenmovee out.
” Michael Tansey, a Harvard-trainerd economist on the faculty at , said delays in stimulatintg the economy already have cost As it stands, the $787 billion stimulus packag e should be viewed as “merely a first with the next installment due in six Tansey said. In addition, he said, the federao government needs tospend $3 trillio n to “weed out as quickly as possible the banks who got in troublw on their special investment vehicles; dependedd upon securitized mortgages, losing the ability to know theidr borrowers; and could not unwind their An additional $500 billion needs to be spent quickly to stop “If we wait another year” to invest the necessaruy dollars, Tansey said, “we may have to multiply everythingy by a factor of two or three becauses we are taking the rest of the world with Irvine Hockaday Jr.
, a Kansazs City business leader and membedr of the board, is more optimistic. “What we’re I think, is an effort by the administration to feel its way to a solution to oureconomic crisis,” Hockaday said of the stimulus plan and the ’s $700 billion Troubled Asseg Relief Program. “By ‘feeling its way,’ I mean solvd the problem without inserting the government any further than absolutelynecessary — that is, without permanent nationalization of our financial “Will this careful approac be enough?
My guess is that it within the next six to 10 months, resultt in credit loosening, foreclosure forbearance, gradually improving productivity and improving financial markets.” Thomas executive vice president of , said there’s plentg of money on the sidelinesd to restart development and business growth. The questionm is whether the stimulus and TARP will creatadequate jobs, confidence and liquidity. “Just throwinyg money at the economy ... won’ft do it,” he said. “A tax refund of $500 to everyboduy whose income is under such and such is a verytiny Band-Ai d that may stimulate all the restaurantf sales next week.
But after that, it’s gone He said the nation should know whetherr the package is workingby mid-2010. The stimulusz seeks to create jobs in the short term while easingthe nation’s long-term dependence on foreigbn oil. Measures include: • About $19.165 billion to promote energyg efficiencyand conservation, weatherization of buildingx and renewable energy research. About $3.4 billion for R&D related to making fossil fuels cleaner.