Will billions fix what ails us?

OUR VIEW of the stimulus package being debated in Washington mirrors our view of the Obama administration: relief and optimism, tempered with fear that our expectations may be a little too high.

Last night, in a victory for President Obama, the Democratic-controlled Congress approved and sent to the Senate a $819 billion package of tax cuts and spending. Depending on who's talking, that's either too much (conservatives) or too little (liberals) to stop the downward acceleration.

The economy, according to experts, is "shutting down." People are spending less because they have lost their jobs or their work hours have been cut, and the values of their homes and investments are sinking. Sales are down, so businesses are laying off workers. Case in point: The nation began the week with 75,000 more layoffs to add to the millions of job losses in the past few months.

The key is to get money into the hands of Americans who will then spend enough of it so businesses will feel confident enough to hire workers - and people will have jobs, pay more in taxes and move the economy back uphill.

Since this is unchartered territory, no one knows exactly what will work, nor how much time we have before it's too late.

The need for speed strikes many as suspect: Witness the debacle of the $350 billion spent to bail out financial institutions. Devoid of oversight, it might as well have been fed through a shredder, for all the good it has done.

That's one reason why the stimulus package includes what its sponsors call unprecedented accountability provisions, including strict vetting requirements for government-funded projects, and the posting of enormous amounts of information about them on the Internet. The idea is to waste as little time and as little money as possible, and that requires a delicate calibration of speed, accountability and long-term benefit. Since there's no map to follow, it's best to stick to the basics, like:

Deficits do matter, but now's not the time to worry about them. Conservatives' concern about the debt being passed to our children is not only fake but wrongheaded. First, if they were really concerned about future generations, they wouldn't have fought a trillion-dollar war in Iraq while cutting taxes. Think of short-term deficits as life support: expensive but necessary to stabilize the patient so that other treatments can take effect. Besides, if you don't use them now, it will be too late to use them later.

Government spending is more effective at creating jobs than tax cuts. Individuals can spend a relatively small amount each in tax cuts on relatively small items - if they even spend the cash, which many don't. Businesses are even less likely to use tax cuts to invest.

In contrast, government spending to create or save jobs from being cut provides more "bang for the buck." A tax cut of $1 returns $1.02 to the economy, while $1 grant to states returns $1.36 and $1 spent on infrastructure brings in $1.56. And you end up with better bridges and roads, healthier people and a more hopeful future. Direct aid to low-income families, like food stamps, Medicaid and refundable tax credits, serves not only as a safety net, but also creates jobs.

Obama won. The stimulus reflects what he promised before the election, and what Americans voted for. Elections have consequences - not only now, but in the future . . . especially for those who try to block the way. *