50 states

On the subject of President Obama's economic recovery plan, I side with the Keynesians who argue that America needs a big, bold, aggressive infusion of government spending. The bigger the better.

This approach is "controversial" to the extent that there's a hard-core anti-Keynesian faction of economists who argue that Keynes was wrong and that President Franklin D. Roosevelt's rescue of the nation from the Great Depression was some kind of accident. The fact that his Keynesian stimulus coincided with 9-percent GDP growth in his first term, they say, was just a weird coincidence. I think these people — whom Matt Yglesias has aptly termed the "Neo-Hooverites" — are not just wrong but demonstrably wrong. Eric Rauchway, among others, does an able job of demonstrating that.

But if there's one thing the Keynesians and Neo-Hooverites might agree on it is this: Half-assed Keynesianism might be even worse than either of their preferred options.* And I'm beginning to worry that half-assed Keynesianism might be what emerges from President Obama's efforts to attract bipartisan support for his recovery plan.

What I find most worrisome is this: "Senate Stimulus Compromise Deals a Blow to Cash-Strapped States." Elana Schor notes that the Senate compromise cut back aid to state governments by $40 billion.

There's been a lot of discussion about the need for stimulus spending that can be done right away — such as infrastructure programs that are ready to break ground and pour concrete in the coming weeks or months. But even those projects wouldn't provide as rapid an infusion of cash as aid to state governments can and will provide. This aid may not immediately create jobs, but it will immediately prevent the elimination of tens of thousands of jobs in nearly all 50 states. Those states, nearly all facing budget shortfalls that range from substantial to crippling, have already begun laying off or furloughing state workers.

Republicans have worked for decades to create a negative connotation to the vague phrase "state workers" — drawing a mental picture of faceless bureaucrats shuffling papers and stringing red tape. So let me guard against that deliberate distortion by rephrasing the last sentence in the paragraph above with more precision:

Those states, nearly all facing budget shortfalls that range from substantial to crippling, have already begun laying off or furloughing teachers, police, safety inspectors, doctors, nurses, correctional officers, parole officers, agricultural extension workers, college professors and those who provide care for the handicapped, the mentally retarded, the elderly or children in foster care.

Such layoffs and cuts are already happening and they are bound to accelerate, thus in turn accelerating the downward spiral in which the national economy is already swirling.

This is not hypothetical or abstract. Jack Markell, the new governor of Delaware, where I work, is struggling to balance that state's budget as state law mandates. It's a small state, so its budget deficit may seem, in absolute terms, relatively small compared to the shortfalls facing its neighboring states of Maryland and Pennsylvania. Delaware is $606 million in the hole.

To explain the gravity of that to the people of Delaware, Gov. Markell outlined four possible scenarios, four ways in which one might go about balancing the state's budget. These are neatly summarized in the graphic to the right here.

Any of those scenarios sound attractive to you? Delaware isn't the worst-case scenario right now as far as state budgets go, but already they're tossing around phrases like "close all state parks" or "get rid of the state police." Would you want to live in a state — or even near a state — in which such drastic measures were forced to become reality? Because this isn't hypothetical.

That graphic demonstrates why those people going around saying things like "government is the problem" are either complete idiots or, at best, people who don't bother thinking things through with enough effort to avoid sounding like complete idiots. When they say "government is the problem" what they're really saying is "Having a state police force is the problem." Having a justice system is the problem. Having schools is the problem. Providing care for the indigent elderly and the physically or developmentally disabled is the problem. Public transportation is the problem. This is what they're saying, whether or not they care enough to realize that this is what they're saying. And what they're saying is indefensible and abysmally stupid.

But this indefensible and abysmally stupid option threatens to become reality in state after state without immediate and vigorous federal support. Seriously. All those people going on about this being the worst financial crisis since the Great Depression weren't kidding, you know. The brink on which the states are teetering is above a precipitous and damaging drop.

So I'm not really interested in some kind of half-measure compromise. I don't want to hear about some least-common denominator bipartisan approach that only wants to see the states plummet half-way into the Hobbesian jungle below.

More aid for the states please, not less. And sooner, rather than later.

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* This would be true if I were confident that those advocating Neo-Hooverism were really arguing in good faith. I suspect that's not the case. I suspect, in fact, that they know all too well that a bold stimulus plan with an adequate amount of spending will work, thus re-confirming that FDR was right and their side was and is wrong. So instead they're fighting to ensure that Obama's stimulus plan includes an inadequate level of spending so that they can, in turn, pretend this confirms their ideological stance. They'd rather be able to pretend they're winning the argument — even when they know otherwise — than to lose the argument and see their country saved. I hope this bad-faith suspicion is untrue, because it would really make such folks incredibly despicable.

See also: Steve Benem: "It ain't fearmongering if it's true"