Opinion: Column
Trickledown economics fail to stimulate economy
Looking for a print version?
Simply use your browser’s ‘Print’ command and a printer-friendly document will be generated automatically.
Also by Patrick McEwen:
- Understanding nuclear issues facing our future (November 4, 2009)
- SSFC reps should all be appointed (October 20, 2009)
- Non-tech students want a degree? Take calculus first (October 6, 2009)
- The Hitchhiker's Guide to Student Segregated Fees (September 30, 2009)
- Students, please be realistic: Health care reform has costs (September 16, 2009)
Sharing tools:
E-mail this article:
For those of you who, like me, are big fans of Madison Metro’s new hybrid buses, there is more good news on the way. The stimulus package will include $9.5 million earmarked for new transportation spending, which the city has decided to spend on 18 new hybrid buses. Really, what’s not to like? They are quieter, have a much smoother acceleration, save money on gas and help limit the damage we cause to the environment.
From a fiscal responsibility point of view, the decision to use the money this way ought to be commended. The city needs to replace old buses anyway, so buying new buses will save the city money in the long run. The purchase of hybrid buses also cuts down on operating costs by saving on fuel expenses.
When looked at from the perspective of using money that, according to Mayor Dave Cieslewicz, the city could only spend on capital and new purchases, I find it hard to think of a better use for the money. But when you think about the true opportunity cost of the expense, things start to change a little bit.
For example, were it not for federal restrictions on the use of the money, the city could have used some of it in order to finance the city’s bus system without the need for a 50-cent increase in bus fares. Even assuming we can stimulate our economy by running up huge deficits, it makes more sense to keep transportation affordable to ordinary Madisonians rather than help a bus company stay in business or expand. Maybe this order for new buses will help save jobs or create new ones. Or maybe not.
However, we can certainly say cheaper transportation would help benefit the economic growth of the
Putting this money in the hands of everyday residents of
This is, of course, just one of many examples of wasteful spending that I’m sure abound in the stimulus package. There is just no way
On the other hand, just like there are better ways this money could be spent by Madison Metro, there are still better uses for the money in the first place. Remember that whole credit crunch thing that resulted in the need for a stimulus bill in the first place? How so many companies couldn’t get the loans they needed even for day to day operations? And how the federal government needs to step in to loan companies like GM money they couldn’t get anywhere else just to stay in business?
That $9.5 million to pay for our new buses had to come from somewhere. Since our federal government has so graciously decided run up a deficit of over $1 trillion this year, that money will come from the same place the deficit financing will. In essence, it will come through the borrowing of money. Since the federal government is a pretty safe entity to loan money to we likely won’t have a problem finding people to finance our debt. The problem though lies in that there are so few people who have any money to loan someone right now. If the federal government is eating up those loans, it’s only going to divert financing from other projects and impede the ability of the private sector to start creating new jobs and economic growth.
As worthwhile as spending extra money on new hybrid buses might seem, combined with the other billions of dollars of likely inefficient spending, the stimulus package won’t help lead us out of our economic crisis. Instead, it will just divert much need capital away from companies in the private sector, further exasperating our situation.
Patrick McEwen (mcewen@wisc.edu) is a sophomore majoring in nuclear engineering.
5 Comments | Leave a comment
Leave a comment
Herald Blogs
The Beat Goes On
Fans of Waits will not be disappointed
Muckrakers
Report: Barrett to make decision by the end of the week
Extra Points
Top Classified Ads (view all)
SPRING SUBLET: 1 bedroom in 2 bedroom at the Aberdeen. Rent negotiable. Email arkramer@wisc.edu
GENTLE WOMEN...THROUGH the lens of Douglas J. Nesbit, newly released book now available for holiday gifts! www.gentlewomen.us
IP hash: 07028cd4
“it will just divert much need capital away from companies in the private sector, further exasperating our situation.”
So, what’s your beef? Do you want government to subsidize private industry making it semi-private, semi-government (like Amtrak)? Or do you want private industry to donate funds to rebuild bridges and supply Madison with new buses? Your argument sucks; I think you should go back to Limbaugh for re-programming.
IP hash: bb9775d1
City buys buses —> the companies that make the buses get business —> the operating costs of the buses are lower(fuel, upkeep, etc…) + the buses are better equipped to keep on the time table.
So the new buses may very while help keep cost lower, better enable people to get to work and going shopping, and help keep the companies that make buses in business.
this is not trickle down economics, that would be giving the money to the rich is hopes it boils down, this is just pump-priming. The private and public sector have frozen, these leaves the government to inject capital in hopes of jump starting the economy.
You wouldn’t let a kid who had only taken high school entry level physics play with a nuclear reactor, stop trying to do the same with the economy.
IP hash: f62c579a
This article had nothing do to do with the headline
IP hash: 944e37f7
Patrick better look at the new Madison Metro Blog put in place by the employees of the bus company to “expose” waste and mis-management. Money WILL be spent okay. Just not in the right way.
Those new Hybrids cost double what a regular bus cost and maintenance costs are triple if not expected to be more over th years once the warranties expire. They DO NOT save fuel. The Employees that Fuel these buses are putting as much as a “regular bus” worth of diesel. You would need to operate these coaches for 12-14 years to recoup your investment and they will be long gone before then. Hybrids are a feel good look good public showing scam operation.
Blog: www.madisonmetroblog.blogspot.com
IP hash: d65e63b4
“This article had nothing do to do with the headline”
Just keep in mind the editors title all the columns. Fucking Sam Clegg and Joey Labuz blow at headlining.