Sunday, February 8, 2009

All government spending is not bad.

Government spending has been given a (somewhat deserved) bad name. "Bridges to nowhere, Alaska" funding comes to mind. As wasteful as our government can be, this article on Salon.com points out that not all government spending is bad.

I'll take this line of thinking a step further and state that government spending has actually been the spark for several strong economic booms and has had strong influence on the direction of economy...and can have a strong influence on our future, should we allow it to happen. I've listed the ones I know about here:
  1. The "Space Race" fueled the funding necessary to kick off the technology boom.
  2. The military has spawned many derivative products and industries. CDMA (technology used for cell phone networks) is one that comes to mind.
  3. Darpanet was the precursor to today's internet.
  4. The interstate highway system. (Scorned at the time it was developed, though praised for many years since.)
Ok, so that's "only" 3, but I'm sure there are many more. The point is that wise (and sometimes necessary) government spending is good for the economy. For instance, investment in technology and infrastructure could help to break the "digital divide" and poor progress of our telecommunications companies.

Currently, our broadband connectivity ranks 15th. Considering that this connectivity will be (already is?) the next big vehicle for commerce and expansion, that's pretty troubling. How could this happen in what conservative idealogues like to call the vibrant, competitive and "infallible" free market? Because the infrasture that telcos control is naturally monopolistic. Market forces oblige the telcos to squeeze profit out of existing infrastructure, not develop new and better infrastructure. The lax FCC regulation of current administrations has only magnified this issue. How to fix the issue and restore our once great broadband connectivity standing? Pursue a national FTTH (fiber to the home) initiative. There are those who would argue that our distances are too great and our population density too low to make this feasible. I counter with...tell that to your underserved and communications impaired children and grandchildren. Both Sweden and Finland have lower population densities and manage to do a much better job than we have, thus far.

Nope. The "wide open spaces" argument is bunk. As are a lot of the arguments on the side that opposing government spending....at all costs. The private sector just doesn't do well investing in anything that is overly expensive or overly "new". It tends to be extremely risk averse, to our detriment. Let's please not forget this as we pass the first of what's sure to be several stimulous bills through Congress!

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