The Progressive Policy Institute (PPI) is a think tank in Washington DC whose “mission arises from the belief that America is ill-served by an obsolete left-right debate that is out of step with the powerful forces re-shaping our society and economy.” PPI releases a Trade Fact of the Week, the most recent of which describes the International Monetary Fund’s (IMF) goal that “governments launch an aggregate ‘fiscal stimulus’ program of 2 percent of world GDP. In dollar terms this is about $1.2 trillion a year.” Here is a list of stimulus packages worldwide as of February 4th:

Value of “fiscal stimulus” packages worldwide:

The hope is that such an international effort will “(1) support growth, (2) create jobs, (3) pay for projects with lasting value, and (4) encourage international cooperation and coordination” against the current economic crisis. With regards to #4, it is a good sign that Congress has watered down “Buy American” provisions that had been inserted into the US stimulus so that they now at least fall in line with US obligations under international trade treaties and the World Trade Organization (WTO). Should protectionist trade measures be implemented, retaliation from other countries would be severe, the free flow of goods and services would be curtailed, and already struggling businesses would have an even smaller market to sell their products, eventually leading to more layoffs. #3 is important in ushering in the second green revolution by making sure that money goes not only to “regular” infrastructure but also to social services, education, and research and development. It’s hard to craft a bill that creates jobs and produces an immediate stimulus while also laying the foundation for growth that will produce much more “bang for the buck”. Japan is a good example of what happens when too much government money is put into bridges to nowhere and infrastructure projects that add little long-term value to society. While acknowledging political realities, the US Congress and governments around the world would be smart to use the economic crisis as an opportunity:  Invest in the research, smart infrastructure, and education that will yield, like a steady stream of dividends from a solid and well-run company, high return and long-term value on the initial investment.

- Justin Manger