The BRAC effect

October 06, 2011

The event was called "Beyond BRAC: Shining the Light on Innovation & Opportunity in the CSSC Region," and not surprisingly it was a business function that sought to highlight the economic opportunities brought about as a result of the expansion at Aberdeen Proving through the Base Closure and Realignment Commission's actions.

The keynote speaker at the event, organized by the Chesapeake Science & Security Corridor and held in Edgewood, was locally prominent economist Anirban Basu, who posed the question: "Why is the American job machine so broken?"

Basu went on to point out that BRAC changes, once expected to be a major addition to an already booming local economy, have devolved into little more than a placeholder that prevents the local economy from becoming as atrophied as in other parts of the country.

Basu attributed the few housing starts that have been taking place in Harford County to economic activity associated with BRAC.

What he was saying, and this will come as no surprise to anyone who has been paying attention, is that if it weren't for the BRAC expansion at APG, the local economy would be in need of some other form of life support.

This, of course, points out one of the key paradoxes of the U.S. economic model: Many people in business regard government spending as wasteful and unnecessary when it is spoken of in general terms. Yet when the subject at hand is something like the APG BRAC expansion, it is spoken of in largely glowing terms as though there had been a gold strike.

Moreover, if Basu's assessment is correct, and there's reason to believe it is, it's pretty clear government spending can have a stimulative effect on business. Does this mean more government spending could help spark a way out of the economic doldrums of this age? There's no certain way to know for sure, but if BRAC spending is good for the economy, other kinds of spending might well be worth another look.

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