To the Editor:
Re “Making the Most of Our Financial Winter” (Economic View, Oct. 16), in which Robert J. Shiller advocates increased spending on infrastructure to provide jobs — with all of it made possible by taxes:
Have we not learned from the failed stimulus that both the Bush and Obama administrations have tried? And do we really think the wealthy who will be the target of the taxes won’t find ways around them? And won’t the higher taxes give them less incentive to engage in the economic activity that will generate the required revenues?
Let’s also not forget about the alternative minimum tax, another levy intended to force the rich to pay more taxes. This tax now afflicts many middle-class taxpayers and has required frequent fixes by Congress so it doesn’t impact even more.
Why trust our government, which is responsible for such fiscal travesties as the “Big Dig” and the “bridge to nowhere,” to wisely and efficiently spend the additional taxes that would be extracted by the jobs proposal? The main beneficiaries won’t be the American people, but a favored few unions and politically connected corporations.
David Kelson
Scarsdale, N.Y., Oct. 17
To the Editor:
To Robert J. Shiller’s case for infrastructure spending now, I would add the following:
As an architect with 40 years of experience, I know that the best time for infrastructure work is when the economy is weak, because labor and material costs, contractor profit margins and financing costs are lowest then.
Delaying necessary maintenance and repairs can increase their costs exponentially, and excessive delays can turn manageable repair work into a costly replacement project.
Timely infrastructure spending provides a powerful damper on inflation. Unfortunately, the common response to a severe economic downturn is to defer capital projects and maintenance, resulting in a construction bust. That creates pent-up demand, leading to a construction boom as economic times improve. And that, in turn, drives inflation with higher construction and borrowing costs.
We have ample evidence that many crucially important projects are now long overdue. Democrats and Republicans may disagree on many issues, but providing funds now for essential infrastructure projects shouldn’t be one of them. Joseph C. Rizzo
Spring Lake, N.J., Oct. 19
To the Editor:
In arguing for President Obama’s jobs proposal, Robert J. Shiller says it would be comparable to farmers using their winter downtime to work on their farms’ infrastructure — repairing buildings and equipment, for example, in preparation for future crops.
While time is an asset that is completely lost if not used, those who use their time to work need food, tools, etc. The food may come from seeds to be planted in the spring (savings) and the work may not be very productive if the repairs are temporary or poorly done (typical of government projects).
So here is the important question: Shall we deplete our seed stock (savings) to produce something of questionable value, especially when the seed is crucial to our future survival? While we can “print money,” we cannot as easily replace seeds that have been consumed to “look busy.”
Gunther Geiss, Ph.D.
Southold, N.Y., Oct. 16
The writer is a professor emeritus in the School of Business at Adelphi University.
Article source: http://feeds.nytimes.com/click.phdo?i=191e99212f21d21e8ba794e5ffa5d542