I am really curious about how prioritizing projects will really work. I think the resurfacing / repaving of I5, and the rebuilding of the South Park bridge, are exactly the type of project that fits with a safety and lets catch upon the overdue maintenance theme I heard at one point. But will these be on the list? What criteria are used to prioritize them over something new and grandiose?

I am also curious to see what impact big new projects like these could have on the construction cost inflation for other projects already underway, including light rail, or that are hopefully going to be started in the next few years, like the viaduct. For some inputs, there seem to be significant bottlenecks and bringing in additional resources (new trucks, new asphalt capacity if that's the bottleneck) could result in cost increases on other projects. This is not going to show up in overall inflation, but could have a significant impact on the funding entities.

Thank you, Mr. Van Dyk, for a fine article that gives clarification to the process of Obama's somewhat nebulous stimulus plan. I certainly don't know what to think about EVERYTHING. Economically, we're in uncharted waters, I keep being told, and most seem to be simply cutting back on spending, as they're unsure of what the projections of a dismal future will hold. It seems to me, all we can do is wait and see what's enacted and if the house of cards called Wall Street can be resurrected after lax oversight and maximum greed. As a taxpayer, I'm furious with our elected officials and their personal contribution to the downfall--Richardson being the latest victim/villian. The Illinois governor, and all these people that betray a public trust in their elected posts are only adding to the public dismay and cynicism over whether we really can pull out of this sink hole. They all seem to be throwing anchors to the sinking rather than giving a sense of buoyancy in hope. All too much to sort out at this point, and all too disappointing when what we need are heroes.

"Jan. 9 (Bloomberg) -- The U.S. lost more jobs in 2008 than in any year since 1945 as employers fired another 524,000 people in December, indicating a free-fall in the economy..." and Van Dyk urges caution. Hubert just rolled over screamed Ted was a republican mole.

Go down Moses, let my people WORK. I agree with Paul Krugman. The only failure of the New Deal was that it didn't go far enough, and that is the danger again today. Oddly, everyone seems to have forgotten the role of the Dust Bowl in prolonging the Depression.

Reprobate: We need swift and sure stimulus. The only concern is that some of the things now in the package, version I, will not provide that.
If we are going an additional $1 trillion into the red this year we need to be sure that all or most of it will have an immediate impact---a jump start. Anything not having an immediate impact is problematic.

I have been surprised, by the way, that more congressional Democrats have not immediately risen to advocate the proposals. They, as well as their GOP counterparts, are just plain worried that we would spend that much without getting short-term results. I expect the package to get pared back to those essentials which would stimulate jobs and growth right now.

Perhaps I should clarify. I keep hearing that the supposed failure of the New Deal "proves" that government spending doesn't work in a plummeting economy. Does no one remember the Dust Bowl? Has anyone at least seen pictures of the lines of cars on Route 66 stretching as far as the eye could see? The cars were crammed with people and all their worldly goods pushing westward in hopes of survival - never mind a better future. Their farms (or farm-based livelihoods) had been sold at auction.

Ted,
"Cuts in general business tax or capital gains rates? These would have general and widespread effect on hiring, expansion, and investment decisions across the economy, but thus far they appear to be missing". These would have absolutely no value in jump starting the economy. With businesses operating at losses, income taxes are moot and of no relevance. Corporate and capital gains taxes have already been reduced and emasculated by exemptions and credits to the lowest point in more than half a century and most large corporations pay no tax anyway.

Personal tax cuts or credits, while nice, will have little stimulus effect as the funds will largely be dissipated in reducing credit card debt and staving off mortgage foreclosures. If you haven't noticed the banks are not lending. They will put the repayments into near zero rate Treasuries before relending it out to business or individuals.

In a recession of this severity only sustained and massive government expenditures on infrastructure, education, health and propping up state and municipal employment (several million state workers across the country being thrown out of work could tip this thing over completely) will prevent a slide into depression and it needs to be done as soon as possible, even if some of the projects are ill advised. You are not the only person around here with advanced degrees from Ivy League schools and lots of experience in the real world. Mine are in Economics not Journalism and 45 years working in finance.
Rat

One more thought and I'll go away for awhile. The preliminary numbers I'm seeing for December personal spending show the sharpest contraction I can remember since 1960 and probably since the post-war slump in '45. They are truly alarming and if they continue will be a disaster for retail business with repercussions throughout the economy. People are afraid and they are not spending and our economy is currently largely built on ever expanding consumption. Our individual decisions to curtail spending while personally very wise are not helpful to the economy.
Rat

The Democrats are hard selling deflation to to tap into the collective association with the depression-era, it's heroes, and big government solutions. Don't buy it. We're experiencing a revaluation in the housing and commodities market. The markets were inflated; now they must deflate.

If the Obama Administration succeeds in stimulating demand, a spike in the price of oil could result--two steps backward. Tom Whipple, who follows developments in the energy markets, explains the predicament we may be facing:

"Despite market fixation with the rampant demand destruction that is supposed to be going on due to the faltering global economy, the available numbers still suggest a drop in worldwide demand of hundreds of thousands of barrels per day rather than millions. U.S. consumption continues to inch up slowly and is now only 2.9 percent below the similar four-week period during 2008...Most OPEC members have announced the details of their production cutbacks to keep in line with recent quotas. In another month or two the worldwide demand picture should be clearer as total OPEC production cuts approach 4 million b/d."

If we have a confluence of events, a price spike much more severe than summer'08 would seem likely. New Green Deal? I'm planning a BIG garden this year.

Whipple has a weekly piece here: www.energybulletin.net
His latest is here: http://www.energybulletin.net/node/47667

keeping my fingers crossed that the blue dog demos whip some sense into their liberal loser relatives .