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TTR takes a gander at the need for a third stimulus package, how the shrinking U.S. economy affects our neighbors to the South, why nukes are too expensive and how our dependence on oil makes us less secure.
- We need a third stimulus. [PDF] According to a new report from the Center for Economic and Policy Research, of the $787 billion stimulus package passed in February, $146 billion will be spent over the next 10 years, diffusing its impact, while another $70 billion is being spent on a non-stimulative one-year patch on the Alternative Minimum Tax. This leaves $571 billion, about 1.9 percent of GDP, for short-term stimulus. After factoring in the staggering levels of debt at the state and local levels, most of which have been addressed by spending cuts, we are left with "an average of $126 billion a year of government stimulus." That doesn't even come close to addressing the $2.1 trillion demand shortfall, which means another stimulus package should be in order -- if the administration thinks it can avoid the political pitfalls of more spending and get Congress on board. -- JB
- Remittance remorse hits Latin American economies. Latin American and Caribbean immigrants in the United States will remit $64 billion this year, down from $69 billion in 2008, the Inter-American Dialogue reports. Haiti, Honduras, El Salvador, and Nicaragua will lose one percent of their GDP as a result. "Public policies will likely not lessen the negative effects of the crisis for immigrants," the report's author, Manuel Orozco, explains. "Many critical public assistance programs, particularly those for unemployment and underemployment, are prohibited for recent legal immigrants." Beyond that, benefits for millions of undocumented immigrants, who also remit, are fewer and farther between. Without public assistance and without savings -- in 2008, immigrants used their savings to remit, leaving their pockets empty this year -- once-remitting immigrants will cause 5 million Latin American and Caribbean households to lose 7 to 65 percent of their total income in 2009. -- CP
- Mo' Money, Mo'...Nukes. Spoiler alert: Nuclear weapons are dangerous, destabilizing, and proliferate with ease. Last week, a New America Foundation policy brief reframed their costs in economic terms by examining the fiscal problems with the recent National Nuclear Security Administration proposal for upgrades to our nuclear weapons complex. NNSA's plans include three new weapons facilities at a cost of $6 billion. When factored into the budget, the cumulative price of renovating and sustaining our nuclear system is $175 billion over two decades. However, considering the significant cost overruns of NNSA projects in the past ($5.6 billion since 2000), the true price of the proposed upgrades could reach $200 billion or higher. And what do we get in return? The nuclear weapons complex produces relatively few jobs, does not stimulate economic growth, and complicates our geopolitical interests by providing excuses for rogue states (see Iran) to develop their own atomic arsenals. President Obama showed his understanding of these issues by calling for renewed non-proliferation efforts, which makes this NNSA plan all the more startling. This may be an interesting turf battle, and something to watch as the budgetary process moves forward. -- JL
- Oily estimates. New research from the RAND Corporation, sponsored by an institute affiliated with the U.S. Chamber of Commerce, reconfirms a well-known fact: our dependence on oil, particularly the imported kind, makes us less secure. The brief cautions against thinking that cutting into oil export revenues would thwart financing for terrorism (due to its low-cost nature), but acknowledges that the U.S. could trim its defense budget and cut financing to states like Iran if we were to import less petroleum. RAND's recommendations offer something for everyone on the political spectrum: eliminating subsidies and price controls in the oil market, boosting domestic oil production, and the old wonk's favorite (but sadly politically untenable) remedy: taxation of all petroleum consumption to create incentives for conservation and investment in alternatives. -- MK
