The Stimulating Effects of Monitoring Volcanoes
The consensus piece of apologetics for Jindal’s anti-USGS remarks appears to be to claim that even though volcano monitoring is, of course, a worthwhile investment, it is not economically stimulating, and therefore does not belong in the stimulus bill.
To claim that this is what Jindal was actually trying to say requires a phenomenally over-generous interpretation of his speech. But forget what Jindal did or did not say, or mean to say, or imply – his big flop is yesterday’s news now. Considering the argument that volcano monitoring does not belong in the stimulus bill on its own merits… I just don’t get it.
I am not an economist, and I hope that people with a grasp of macroeconomics and fiscal policy beyond my Econ 101 will feel free to weigh in here. My understanding, though, is that in general, a good economic stimulus project is one that hands money to people who will immediately turn around and hand it to someone else. While economists can argue forever about Keynesian multipliers (and Internet kibbitzers can argue forever about which types of imaginary example people have the most virtuous money-spending habits), the rule of thumb is that good stimulus projects spend money directly on useful goods and services, or deliver money directly to people who are so completely desperate that they will immediately spend every last penny (cf. this very wonky discussion and this slightly less wonky discussion).
Volcano monitoring money will be spent directly, and swiftly, on goods and services – primarily new and upgraded monitoring equipment, and the people needed to install the equipment and interpret the data (source). We’ll get a long-term economic benefit from our improved ability to forecast and mitigate eruptions, just like we would with the oft-cited infrastructure investment of a new road (albeit with slightly more uncertainty – but the expected value is positive). And because volcano hazard warnings are a public good, there is little risk of disincentivizing private industry.
Why is this any less of an economic stimulus than a shiny new piece of highway or other generic infrastructure? Is it just because some people have defined the phrase “economic stimulus” to mean “tax cuts and ONLY tax cuts” and will refuse to acknowledge any dictionary not published by the Cato Institute? Or is there a real reason?
NB: I recognize that I’m doing better in this recession than many people, but I still do not have long-term employment and I am still in serious miser mode. So I am just the weest bit touchy about being told that I am not part of “We the People” and that my economic situation – and that of the many other unemployed/underemployed volcano-seismo-whooserwhatsits with whom I am competing for a very small number of open positions – is irrelevant to the country. I imagine that some folks in Redding, CA – where the high-end GPS manufacturer Trimble Navigation just went through a round of layoffs – might be touchy as well.
Finally, since I just spent the better part of an evening reading political arguments on the Internet, I have to share what I think is the winningest witticism of this whole kerfuffle:
One of the many graffitos found at the ruins of Pompeii: GOOGLE RON PAVL