Not transformative

I have long argued that the economic stimulus spending need to be more than a short term boost -- it needs to be transformative. Education is a transformative investment. Thus I support additional funding to state and local governments for education. Another transformative program is the innovative DOE loan programs for clean energy facilities. However, raiding one to pay for the other is not transformative. Yet that is apparently what happened in the Education Jobs and Medicaid Assistance Act signed by the President yesterday. As a piece in WSJ (Renewable Energy Backers Wince As Congress Raids DOE Coffers) notes, this is not the first time Congress has used funds from the energy loan program to extend other programs. Last time, it was to fund the "Cash for Clunkers" program.

At least this time it was for another transformative program - education. As much as I liked the Cash for Clunkers idea, it was a short term stimulus not a long term transformative action.

The Congress' action is all too understandable. Short term hits are always easier than long term investments. But we need to start getting seriously about national long term investments. In a few years, our GDP numbers will reflect that R&D spending is an investment. We need to back up that thinking with a better view of the government's investment strategy.

Right now there is an analysis of the government's long term investments hidden in a chapter in the technical appendix of the budget documents. That analysis need to be front and center in both the documentation and in our thinking. And the analysis need to be expanded to include all forms of longer term investments, including the creation of intangible assets.

I can't say that this type of information will stop the short term focus of the political system. That would be naive. But at least it will help bring to better light the fact that our long term investments are often neglected and short changed. That would be a step forward.