Will The Federal Stimulus Plan Hurt Maine?

There has been considerable talk over the last month, that the new stimulus package being offered to the country has some misplaced priorities which, counterintuitive to the point of a “stimulus” package, will actually be benefiting foreign countries, and hurting several economic sectors in the United States.

The logic goes like this – there are an infinite number of industries in pain in the United States currently.  There are more federal programs and projects than can be counted which need more money.  The economic stimulus proposed by President-elect Obama has a rather unfortunate side effect – weakening American industry, and strengthening China.  China is the clearest benefactor to the stimulus – they will be providing the credit to the United States to fund the package, and the influx of manufacturing and production business they will receive from the plan will be staggering.

One of the biggest spending proposals in the package is Obama’s “public works renewal”.  This is a fine example of what I am talking about.  Obviously, the United States will provide the labor for such construction, and will contribute some raw materials like gravel and steel – but besides that, the materials that will be used for this massive public works endeavor will be coming from China.  Spending on government buildings like schools will similarly be shipped overseas for many items of consumer electronics that are used to stock said buildings with equipment.

All the while, many American projects, which produce things for the country and do so in the United States itself, are being ignored by the stimulus package.  Any stimulus package that will be this large, should instead focus on domestic manufacturing and production, to provide the maximum benefit to the economy, and safeguard American jobs, American products, and so on.

Right – so how does this relate to Maine?

Maine, as you know, has had a rather diminished industrial capacity toward the latter half of the 20th century.  Paper mills have closed, factories have closed, and manufacturing jobs have fled the state en mass.

One of the very few things remaining for industrial production in the state are manufacturers who produce equipment for the military – everything from naval ships to engines for the Air Force.

Due to the downturn in the economy, the Department of Defense is preparing budget cuts – and one of the projects that will potentially be passed over is the F-22 fighter, a stealth fighter jet intended to be the next generation of air power for the United States.

By focusing on pet projects which will end up relying on foreign goods, the stimulus is simultaneously allowing wholly American projects like the F-22 be threatened.  Currently, there are roughly 100,000 jobs and over $12 billion of domestic economic production reliant upon this project – and guess where a bunch of them are?

In North Berwick, Pratt & Whitney owns a facility which produces the engines the advanced jet engines use.  It employs Maine people, produces products used for the defense of this country, used in this country, benefiting this country.  Threatening the F-22 and other military projects threatens a great deal of the workers in Maine who produce these goods.

And what do we get instead?  Imported goods and services which are paid for by borrowed money – essentially its like borrowing $100 from your friend, so that you can buy a $99 iPOD for him for Christmas.

In my world, if you really need to borrow that $100, the best bet would be to spend it on something that
benefits you.

The economic stimulus package ignores that domestic need in favor of spending money for the sake of spending money.  I happen to oppose a new stimulus package all together – I don’t want to spend a dime of borrowed Chinese money on anything – but if were are really going to go down that road, then I think its obvious that a more appropriate stimulus would be to at least safeguard American manufacturing jobs, especially ones which produce truly important things.

Maine can’t afford to lose more jobs because we cut military domestic production while simultaneously paying for workers in China to make nice, shiny computer chips for us.  That is a backward priority – one which will hurt us all in the end.  With Maine’s unemployment set to flirt with 9 or 10% in the coming two years, this isn’t simply a “pet project” – its a question of priorities, and clearly the new Administration has them backwards.