Will Senate dilute bill?

Acccording to Jim Haughey, Reed Construction Data chief economist, early in 2008 the GDP loss from reduced housing construction was twice as large as the GDP loss from reduced durables consumption and business equipment and software spending. The decline in consumer durable goods and business equipment and software purchases in the 4th quarter was more than six times larger than the decline in construction spending. The GDP loss from reduced durables consumption and investments, excluding construction, was $130 billion larger than the GDP loss from less construction spending.

As the stimulus plan evolved from conception to the plan approved by the House, the funds focused on general economic stimulus grew from twice as much as direct construction funding to six times as much. The direct construction funding in the house plan has drawn strong criticism from all quarters. The claims on how quickly the money will be spent are widely judged to be implausible.

Every day brings more news about layoffs outside of the housing and mortgage industries which dominated layoff news until a few months ago. The solution to this problem is not a new federal building that starts construction around Labor Day. Rather the solution is action that gives consumers more cash amore spending confidence as soon as possible – weeks not months.

The Senate may leave much of the House approved construction funding intact but their additions will be for more general programs. If total program costs continues to be a concern, the Senate may take a considerable share of the House construction funds for quicker and more general programs. Your comment?