Stimulating cities
From the Philadelphia Inquirer:
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President Obama has pledged “to explore each and every avenue that will lead to job creation and economic growth.” One avenue would be redirecting nearly $300 billion in unspent federal stimulus funds to metropolitan areas, where most of the people, jobs, and gross domestic product in this country are found.
While states hoard federal money to do little more than plug yawning budget gaps, cities are more likely to use it to create jobs in the short term and drive economic growth in the long term. [AO: This is all well and good. And indeed, the writer makes a strong argument for directing stimulus funds to cities rather than states. However, I couldn’t help but worry about some underlying assumptions. One of these assumptions, it seems, is that state governments are somehow not integral part of state such that states can be left to wallow in debt while cities thrive or at least make ends meet. This is unlikely. If funds bypass the state level, state governments are likely to reduce their support to cities, especially since states have to balance their budget. While directing funds to cities might enable them to fund projects in the very near term (say 12 months), their fiscal situation is sure to deteriorate during that period or very soon after when state governments takes steps to limit the resources they provide as a result of their debt. There are no easy answer here so while the writer’s argument is strong, it doesn’t appear to be the silver bullet they make it out as.] |
Read the full opinion HERE.
