From: bo275@cleveland.Freenet.Edu (Larry R Beam)
Newsgroups: sci.econ
Subject: Re: A Supply Side Call to Arms
Date: 19 Nov 1992 17:43:38 GMT
Organization: Case Western Reserve University, Cleveland, Ohio (USA)
NNTP-Posting-Host: slc4.ins.cwru.edu


    Many  Americans feel  as James  W. Howe  does--that public

spending is some how  inherently wasteful (see article 13671).

They and he are wrong.

    He writes that "There are  countless examples of roads and

bridges that  have been built  for which there  is no rational

reason." I can't think  of even one such  example; here in the

Cleveland  metropolitan region,  and  the other  parts  of the

country, public roads and bridges  are heavily used, and their

contribution    economic   welfare    and    productivity   is

immeasurable.

    The existence of adequate  infrastructure, in good repair,

is absolutely essential to  economic success. And our nation's

economic success is essential to every facet of our lives.

    After admitting that some  public projects are beneficial,

Mr. Howe writes, "The question is what is the opportunity cost

of public works projects.  Could  the money have been spent on

other things  which *also*  would have  benefited the American

people, and possibly benefited them more."

    Mr.  Howe  should note  that,  to the  extent  that public

projects  are  built   by  workers  who   would  otherwise  be

unemployed, their  opportunity cost  is zero.  The question of

which proposed  projects will  yield the  most benefit  to the

American  people is  very  difficult. Because  public projects

yield  different degrees  of  benefit to  different  groups of

people, reaching thorough consensus as to which ones should be

built  is  always  difficult,  and  never  is  everyone  fully

satisfied. C'est la vie.

    America  must--and  under  Bill   Clinton,  I  believe  it

will--increase  immensely its  social spending  on maintenance

and construction  of public  works. As  everyone who  has ever

owned  a  car  or home  knows,  deferring  maintain frequently

elevates  costs.  The  failure of  Reagan  and  Bush  to spend

adequately on  such things as  roads and bridges  is among the

worst crimes of their leadership.

    Mr Howe writes:  "Our government has  spent money building

sports arenas and stadiums which are underused, spent money on

transit systems which can't support themselves, etc."

    Here in Cuyahoga County--the  Cleveland area--voters, by a

large  margin, agreed  a few  years ago  to tax  themselves to

finance the building of a new stadium. Chronic complainers say

it's all a  waste. I, and  most voters, I  believe, feel pride

and optimism for our city as  we watch the new stadium rise on

what was an urban waste-land. Will Cleveland's new facility be

"underused," as Mr. Howe suggests others are? That will surely

be the  judgment of  some. Yet  the voters  frequently support

such projects.

    And it was the  voters here--acting through the democratic

process--who agreed to  pay for one  of those "transit systems

which can't support  themselves." Voters here  took both these

actions  because the  market  had failed  to  deliver adequate

sports facilities  and public  transportation. They recognized

that their well-being  and productivity would  be increased by

moving some resources  from private to  public hands, allowing

government to provide these public efforts.

 

                              ---Larry Beam.