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Today's edition of TTR includes skepticism about ethanol use, an update on the state of New Orleans' reconstruction, discussion of the economic benefits of social services programs for low-income people, and yet another look at the speed of the economic stimulus legislation.
- Thinking twice about ethanol. The World Resources Institute finds that even moderate increases in the use of corn stover -- the leaves and stocks that remain in the field after harvest -- and other agricultural residues as raw material for ethanol production may prove unsustainable. USDA and USDOE estimates of stover availability rely on harvest levels that would significantly increase the agriculture sector's greenhouse gas emissions and contribution to erosion. Such impacts may be mitigated through the use of best-management practices like crop rotation, cover crops, and green manures. The Institute recommends that biofuel incentive programs include more environmental safeguards and that ongoing federal R&D account for short- and long-term impacts, among other changes in current policy. -- MK
- Update on The Big Easy. Three and a half years after the storm, Katrina’s damage to New Orleans still dwarfs redevelopment, according to the latest New Orleans Index put out every six months by Brookings and the Greater New Orleans Data Center. 83,000 addresses are still uninhabited and fewer permits to rehab them or to build new homes were issued in 2008 than in past years. But where housing lags, public infrastructure repairs are on the rise: 2.4 million FEMA dollars have rebuilt schools, libraries, and police stations. Compared to the rest of the nation, for example, New Orleans’ economy is strong. Last year, almost 6,000 new jobs came to New Orleans; as of November, the city’s unemployment rate was 2 percent lower than the nation’s average. Still, New Orleans’ progress remains tenuous. At the end of this month, the Bush administration's Office of Gulf Coast Recovery will expire, unless Obama renews it. The office provides New Orleans with a strong federal partner, the key to maintaining a steady flow of Community Development Block Grant dollars, levee repairs, and affordable-housing subsidies, to name just a few lingering necessities. The office could also advocate that money from the stimulus legislation be directed toward rebuilding New Orleans; the report’s authors argue that New Orleans’ three-year experience at implementing large public infrastructure projects would allow the city to put these federal dollars to fast and effective use. To keep up with New Orleans progress, check for the next index in August 2009. -- CP
- Assisting America’s impoverished citizens. It isn’t just the right thing to do, it’s good for the economy, too. According to a report from the Center for American Progress, stocking the stimulus with basic needs assistance is imperative. The brief notes that the recession has left “families with fewer resources to address their most basic needs—food, heat, and shelter.” In recent years, 36.2 million Americans have been in danger of going hungry, while 1.5 million additional Americans could become homeless in 2009-2010. The recovery package proposal includes funding for a number of emergency assistance programs, which will not only help the families in question but the overall economy as well. For example, in addition to easing hunger, the Supplemental Nutrition Assistance Program (food stamps) creates 16,400 jobs for every $1 billion invested, due to related economic activity (farming, livestock, food processing, and transportation). Additionally, food assistance programs ease economic pressure on impoverished families, freeing up income that can then be spent stimulating other sectors of the economy. Similar numbers are shown for the other programs making a powerful argument for the continued inclusion of basic-right assistance in future versions of the controversial $884.5 billion stimulus bill. -- JB
- Go, speed racer, go! The Center for Budget and Policy Priorities does a quick-and-dirty analysis of the Senate and House versions of the economic stimulus legislation, discovering that the Senate bill provides 94 percent of its stimulative effect between 2009 and 2011, and the House version would provide 85 percent of its effect over the same period; presumably, the eventual bill will fall somewhere in between those estimates. Because forecasts predict that the gap between real and potential GDP will be as high as 4.1 percent in the final quarter of 2011, CBPP analysts believe that economic stimulus lasting through that year is sound fiscal policy. -- TF
-- TAP Staff
