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Government spending sometimes works out

March 25, 2012|By TIM ROWLAND | timr@herald-mail.com
  • Tim Rowland
Tim Rowland

Disputes over public spending and public projects are as old as the republic itself, so the Washington County Commissioners aren’t breaking any new ground by revisiting the topic.

Back when people really believed in limited federal government (in 1800, Ron Paul would have looked like Barney Frank) lawmakers frowned on the thought of the federal government doing so much as grading a road.

But not all lawmakers.

If you disdain a massive federal government with its massive outlays of cash and its nose under every commercial tent, you might want to blame the Great Lakes and, while you’re at it, beavers.

It was the fur trade that first got lawmakers talking about a canal connecting the Great Lakes with the port of New York, although grain and land speculation soon became the driving forces.

Thomas Jefferson predicted that the canal would bankrupt the nation, but in reality it saved it. The North was lucky to have one geological feature that appeared nowhere else on the Eastern seaboard — a break in the mountains that ran from Alabama to Canada. While still quite an engineering challenge, the Erie Canal didn’t face, as did the C&O Canal, the imposing Allegheny Front that eventually proved (coupled with increasing rail expansion) an insurmountable obstacle.

Construction on the Erie began in 1817, with $7 million from the state government, but of course this was just the tip of the publicly funded iceberg. The public didn’t mind, since it was repaid in cheap food. Settlers and machinery went west on the canal and in turn sent their crops east. New York became the nation’s most important port, diminishing the southern ports in Virginia and the Carolinas.

Even as far south as Tennessee, it became more expedient to send goods to New York than to New Orleans.

The opening of the Great Lakes widened the gap between the northern Whigs, who generally favored public projects and the southern Democrats who generally did not.

Great Lakes politicians believed that the nation would benefit by (and therefore the nation should pay for) dredging of the shallow bays in the lakes that would allow commercial ships to escape the frequent Great Lake storms.

In this sense, government and commerce were not mutually exclusive; government and commerce were partners. Where improvements were too costly for private enterprise to build on its own, the government would be called on for help.

The Whig Party, trying to be all things to all regions, spectacularly failed in the 1850s, but out of its ruins grew the Republican party, whose ascent had little to do with slavery and much to do with public projects, including the transcontinental railroad and Western land giveaways.

The South, meanwhile, had placed its bets on cotton, and nothing else. It barely even provided the infrastructure for the cotton to get to port for shipment to the mills in Britain or in the North.

In Northern states, public projects fed commerce which increased the demand for public projects. In refusing internal improvements, the Southern states maintained their ideological purity, but were totally unprepared for war. Cotton makes poor bullets.

Comparisons between then and now are awkward at best. The Republican and Democratic parties, for starters, bear little resemblance to the parties as we think of them today. Taxes are the issue today; in the first half of the 19th century, it was tariffs. And public spending, or course, has entered a whole new realm.

But this lesson of the past still holds: Not all public spending is evil.

Not all public spending is good, either, but today’s debate comes dangerously close to assuming any public project must be unworthy, simply by virtue of being a public project.

We hear that “if it’s such a good idea, private enterprise would do it on its own.” Several men tried that with the Erie Canal, and it’s instructive to note that one of the men responsible for its construction drew up the blueprint while in debtor’s prison, a stay that resulted from a failed attempt to go it alone.

 The majority of our County Commissioners this week seemed to understand that lesson, maintaining a capital budget at a higher funding level over the objections of the board’s own president.

Key to the majority’s thinking is the current condition of the economy, which still features record low interest rates. These rates might not come around again for a generation, so whether it’s a government buying a school or a family buying a home, this is the time to do it.

Government spending won’t always save a nation. But today, more than a few people are running around saying that any and all government spending will sink a nation. If the money is wisely borrowed and wisely spent, this simply is not the case.


Tim Rowland is a Herald-Mail columnist. His e-mail address is timr@herald-mail.com.

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