The new Congress and administration will probably set up programs using $800 billion to create jobs. The total number of people they hope to put back to work could be three million or more. The cash will be spent primarily on infrastructure such as roads, schools, alternative energy facilities, and broadband.
The only trouble with the economic aid program is that it may not be enough to cover all of the capital needed by scores of industries. Among those which will need funds are obviously the auto and financial companies. Airlines and retail could be on the list early in 2009. Municipalities may seek cash as well.
The next issue the government is going to face, and it will have to face it within a month or two, is which entities will be saved and which will be left to perish. The portion of the decision-making process involving compassion may be trumped by the strategic need to keep some parts of the economy going.
What has not been articulated anywhere is which needy programs or industries will make the grade and on what basis that will be decided. So far, the process has been ad hoc. That can’t go on forever because it will start of process of random salvation which is made based on immediate need and not strategic economic value.
The whole system of bailing out may never have a guiding principle. That will add to the chaos.
Douglas A. McIntyre
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