A commenter at the Atlantic remarks:
There’s the rub. My company’s bank loan officer has called frequently asking if we need to borrow. They are begging to lend money. For what? We could buy a nice new machine tool at a good price, but why do that when sales are falling? Put an extension on our building? Buy some failing competitor and strap oneself with debt? Unless you absolutely need a new car or a new television or a new roof, the big ticket discretionary purchases paid for by loans aren’t going to be made. The loans the banks are making now are companies rolling over existing debt, not new debt. Given the “stuff” out there that is discretionary purchases, I wouldn’t be at all surprised to see unemployment hit 20% before a bottom is reached.
I think this captures something important. And I also think it’s an important part of the case for increased public investment, somewhat apart from the specific issue of the economic stimulus package. If you try to put the contemporary United States in historical and international perspective, you’ll see that we’re doing really well in a lot of ways. As a society, we’re not suffering from an objective shortfall in the quantity or quality of automobiles we have. We’re certainly not falling short in either the number of houses around or their general size and lavishness. We have a lot of very nice televisions, a lot of computers, a lot of cell phones and DVD players, etc. It’s not just that we’re prosperous enough that people aren’t starving to death, but over and above that compared to anyplace else in the world we just have a ton of consumer goods stockpiled such that even if purchases of new goods slowed enormously for years we could keep on keeping on at a high standard of living.
But that’s not to say that things are perfect. Compared to other times and other countries, there are a lot of scores on which we’re doing extremely well. But there are other respects in which we’re falling well behind what we know is achievable by contemporary societies.
We have a smaller proportion of our population graduating from college than do some other countries, and we’re making no progress. Relatedly, our K-12 education system could perform better. Our intercity passenger rail offerings are much worse than they could be, and none of our non-NYC metro areas have really top-notch mass transit offerings. We have substantially more violent crime than do other countries or historical periods in the United States. The level of prenatal health care our pregnant women are receiving is substandard, as is the physical fitness of our children. Public libraries are generally worse than they were a generation ago. America’s streets and sidewalks are, in general, not especially clean or well-maintained. And though our highways are plentiful, they’re not well-maintained either.
This all adds up to a lot of fields in which it would be plausible to say that we could enhance human welfare by expending more funds. But these are basically all things in which the private sector could realistically only have a secondary role. There’s a lot of dogma about to the effect that jobs working for the government aren’t “real” jobs — that somehow the police and teachers and firefighters and the guys who build the bridges and drive the buses aren’t creating anything of value. But that’s preposterous. The work is real, the jobs are real, and the benefits are real. It’s true that it’s difficult to maximize the efficiency of a public sector enterprise. But it’s also true that there are categories of goods that can’t be adequately provided without a large public sector role. And given the generally high level of wealth we enjoy, compared with the past 35 years of starving the public sector, the marginal dollar invested in these kind of endeavors can do an enormous amount of good. And that’s especially true at a time when it seems that relatively few individuals seem inclined to go further into debt for the sake of acquiring a BlueRay player. There’s enormous willingness out there at the moment to lend money to the United States government, and there’s a lot of stuff the United States government could be doing to benefits its citizens.