Sunday, January 25, 2009

Revving up the Economy -- Then and Now

OK, I have one last Lincoln administration-Obama administration connection to offer. My AP US History students and I have finished up studying the Civil War and Reconstruction. We’re moving on to the last three decades of the 19th century – the transformative era when the United States changed from a primarily rural agricultural economy to an industrial powerhouse.

As I watched the inaugural events last week, much political talk focused on the dismal shape of the current US economy. President Obama is pushing for quick passage of his nearly one trillion (!) dollar stimulus package. This proposal, likely to be passed by Congress sometime next month, would, it is hoped, jumpstart the ailing economy. Much of the money would go to public works projects of one sort or another – for example, new roads, bridges, and schools. The idea is to put people back to work on activities that provide long-term benefit to the country and its citizens. The downside, of course, is that the billions of dollars needed to fund these efforts have to be borrowed – drastically increasing an already huge federal government debt.

This gets me back, briefly and wistfully, to the 1860s. As a result of the Southern states’ secession, the war-time Congress had a considerably freer hand in passing legislation benefiting the national economy. These laws, among other things, raised the protective tariff, opened up the west to settlers in the Homestead Act, and created land grant universities specializing in agriculture and engineering. Perhaps most significant from a long-term perspective, Congress enacted the Pacific Railroad Act of 1862. Completed seven years later, the Union Pacific (from Omaha) and Central Pacific (from Sacramento) linked the country together and set the stage for America’s industrial takeoff.

So, will the current proposed Obama infrastructure effort have the same beneficial results? Well, of course we’ll have to wait and see. But, here’s one important (and not helpful to the current situation) distinction. With the transcontinental railroad, the government paid the companies through sales of federal lands (over thirty million acres were sold). The “stimulus” for extensive private development – the land – was already possessed by the government. Because the government was the seller, rather than borrower, the economy could move ahead without the burden of increasing mountains of federal debt. That’s considerably different from where we as a nation are now.

What do you think about the current economic condition of the country? And, if you were an advisor to the one-week-old Obama administration, what would you suggest? Hit the “comment” button and we will post your advice. Who knows – Obama has lots of smart folks working for him -- maybe they will read and implement your thoughts!

2 comments:

Anonymous said...

granted, its up for debate whether or not we're ready for such a dramatic step, socially.

George Jetson said...

One thing is certain, it was essential for people to come together, from across a wide divide, in Lincoln's time to solve huge problems and the same effort is needed today.

What it comes down to, I think, is that each of us have to do the best we can to make a difference in the world and together we can make things better.

If you don't mind, I'd like to share with you something I do, albeit something small, to hopefully make things better.

Every day I use iShopSummit.com to get coupons for breakfast, lunch and dinner from various restaurants in Summit County. At least once a day when I use a buy one/get one free coupon I give the free meal to someone I don't know. Of course, I also encourage them to PAY IT FORWARD.

It's not a big thing, I know, but it supports local businesses and it gives someone a hand up, not a hand out.

That, I think, is the sort of thing more people did in Lincoln's time and more people need to do now.