"Spend money on projects that will enhance the long-term economic health of the country even without a crisis. "

David Brooks makes some good points in his post today in the NY Times:

"That’s not a recipe for doing nothing. It’s a recipe for skepticism. And it leads to some guiding principles for those designing the $500 billion stimulus plan the next administration seems set on: Don’t just throw more money into the sugar rush. Spend money on projects that will enhance the long-term economic health of the country even without a crisis. Do what you would do anyway, just do it faster."

This makes sense.

"I asked Porter how this short-term crisis might serve as an opportunity to address those long-term problems. First, he said, the Obama team will have to avoid a few temptations: Don’t just try to throw out money as fast as possible to stimulate demand. Don’t spread the spending around too thinly. Don’t try to save jobs that are going to disappear anyway.

Then he threw out a bunch of ideas that could be part of a stimulus package:

Send federal money to the states, but make sure a lot of it goes to state universities. There’s going to be increased demand for their services at the same time their budgets are cut. We can’t weaken that link in the social mobility chain. ( Fine )

Extend unemployment insurance, but also create vouchers and loans so workers can get the skills they need to move on. ( Fine )

Extend the Cobra period another 12 months to head off a rise in the uninsured during the recession.( Fine )

Adjust the capital gains rate to give people the incentive to become long-term investors. Right now there’s a tension between the real economy, which is gradual, and the financial system, which is manic. Low rates shouldn’t kick in until an investment is held three to five years. ( Very Good )

Accelerate depreciation on energy efficient goods and services. Increase tax credits for energy efficient buildings and appliances.( Fine )

Porter’s basic message was that President-elect Barack Obama should do nothing in the short term that doesn’t serve a long-term goal.

To which I would add just one idea: Create a network of social entrepreneurship investment banks. These regionally operated semi-public funds would invest in the best local community organizations, so they could bring their ideas to scale.( Fine )

These funds, first proposed by the group America Forward, would supplement the safety net and employ college grads entering a miserable job market. They’d have a powerful psychological effect on a country that desperately wants to feel mobilized and united.

This is a mental recession as well as an economic one. Solving it means getting more and more people involved in a fundamental rebirth. "

I would probably choose other programs, but that' not the point. The stimulus money, since we need to spend it, should be spent, as much as possible, on investments that will pay off in the future. This has serious risks, of course, since we can't really predict the future, but, again, it's less a call for perfection, than making a concerted attempt.

I also agree, perhaps emphasizing it more than he does, that this is a psychological crisis, which needs a Human Agency centered approach to defeat it.