Each week Editorial and Opinion Editor Jeanne Mariani-Belding hosts The Hot Seat, our opinion-page blog that brings in elected leaders and people in the news and lets you ask the questions during a live online chat.

On The Hot Seat last week were Ted Liu, left, director of the state Department of Business, Economic Development and Tourism, and Mark Anderson, right, DBEDT's deputy director. They discussed the state's $1.86 billion economic stimulus package.

Here is an excerpt from that Hot Seat session. To see the full conversation, go to The Hot Seat blog at www.honoluluadvertiser.com/opinion and click on "The Hot Seat." (Names of questioners are screen names given during our online chat.)

Debra: So the economy is bad, I get that. I don't understand where the $1.86 billion is coming from, can you explain that? And how is it that other cities in other states are faced with bankruptcy and are begging for money for their construction projects, but we are able to do this? What did Hawai'i do differently?

Ted Liu: The funding for the 1,521 projects totaling $1.8 billion will come from private developers and from the monies the state will raise through bond financing. That is, from money that will be raised from the U.S. financial markets. This will not be shifting money around from current uses. It will all be new funding and, coming as it does from the Mainland financial markets, it represents additional investment capital drawn into the state.

But I'd like to comment on what this "big number" means to the reader.

Whether or not you are in the construction industry, these dollars spent will help you. While the initial dollars will go into the pockets of folks working in construction, a piece of those dollars will go into the pockets of folks who supply and support the construction jobs — from mom-and-pop lunch wagons to auto mechanics to cement truck drivers and so on. Another piece of those dollars will go into the pockets of the folks from whom the construction folks themselves buy personal things — groceries, household supplies, clothes, medicine and so on. Then the sellers of these things spend that piece of the dollars and so on. The initial dollars "circulate" in our economy — almost like a pinball. Even government gets a piece, as taxes get paid due to the more buying and selling going on. End of the day, we all benefit.

The other way that the readers benefit is that our kids will have better classrooms in which to study and learn. Our doctors and nurses will have better places to work in, not to mention patients having better hospitals. Our roads should be improved and — yes! — safer. Our parks, harbors, walking and bike trails will be better, so that we can enjoy the outdoors. Our scientists and college students better facilities in which to come up with innovations. Our communities will be safer and better to live in. End of the day, we all have a better Hawai'i — and all starting within 18 months!

Braddahlee: Why did the administration decide to focus on the construction sector? Why not on social service organizations?

Liu: The construction sector is among the largest in our economy behind tourism. Its contribution to Hawai'i GDP is approximately $3.5 billion, or 5.5 percent.

According to the DBEDT Input-Output model, for each $1 million spending in construction, there is an average of 5.4 direct construction jobs created. Including the jobs that support the construction activity, such as the supply providers (what economists call "indirect impact") and the spending by construction workers (what economists call "induced impact"), the total employment impact is 12.8 jobs per $1 million dollar spending. So, this is a great place for economic stimulus to start.

Sistahsarah: Gov. (Linda) Lingle didn't meet with other governors and (President-elect Barack) Obama. Therefore, how is the administration going to take advantage of the federal stimulus package?

Liu: When the governor decided to stay in Hawai'i to focus on the economic issues at home, she had discussions with President-elect Obama's staff. It was clear from that conversation that the governor's decision to not attend would not exclude Hawai'i from any federal fiscal stimulus. In fact, it was clear that Hawai'i's needs would still be considered. President-elect Obama also wrote a letter to Gov. Lingle and asked specifically for Hawai'i's needs and requests. The governor has written back to the president-elect with several areas — highways and traditional infrastructure, building out a world-class broadband system, renewable and clean energy infrastructure and workforce housing (including energy efficiency). The governor has been in touch with the president-elect's senior staff in anticipation of his holiday to Hawai'i.

Mr.wong: Didn't you just go to China? I know things are moving quickly there. What are you and your department doing to support this and other portions of the tourism industry?

Mark Anderson: Our recent trip to China was very successful in that we were able to meet with various airlines to discuss air service to the Islands. Air seats are imperative in order for us to take advantage of the opportunities China has for our Islands.

A part of our five-point economic plan includes increasing marketing and tourism outreach. We are pleased with the cooperative efforts the Hawai'i Visitors and Convention Bureau has been able to garner for increased marketing in the Mainland U.S. The message of the campaign and the travel packages that are being marketed show the great value in a Hawai'i vacation.

Nanakuli Bill: Where will the money come from to support this effort, and will it mean higher future taxes?

Liu: The funds for the CIP projects are already accounted for in past state budgets. Funds will come from bond sales. The CIP effort will not require higher future taxes.

Koko Kai: Who determines which areas of the state get their projects, and what will these decisions be based on?

Liu: There was one very simple and straightforward criteria the governor applied: Which projects are "ready to go" or "near ready to go" and for which a contract could be executed within 18 months? So it was a simple "time" test. Can this be done and monies "out on the streets" within that period. As the governor stated on Monday, we do not even know whether the projects on the list were legislative-introduced or administration-introduced. We did not have a "geographic" criteria. The only consideration was getting these projects implemented.

Jo: How critical is it for the City and County to cooperate with the state to prevent delays in starting projects? Has there been discussion between the state and city yet? If not, when?

Anderson: Yes, it is critical for the counties and the state to cooperate to get these projects out to bid in the next 18 months. Russ Saito is leading discussions between the state and counties. Preliminary discussions have occurred and we have every indication of good cooperation.

Jason: How does what we're doing here compare to what other states are doing? And comparatively speaking, is Hawai'i better or worse off than most states? How long do we think this recession will last?

Liu: I'll take the last part first: Compared with the U.S. Mainland as a whole and many states on the Mainland, Hawai'i is relatively better off. We still anticipate economic growth and do not believe we are yet in a recession in Hawai'i. Our unemployment rate is 4.4 percent while the national rate is close to 5.5 percent. Our housing prices have not corrected as much as the Mainland's. Even though our foreclosures are up, as recently reported by The Advertiser, we have among the lowest per-capital foreclosure rates.

Assuming the U.S. economy begins a recovery by mid- to end-2009 as some economists project, Hawai'i should see improvement in tourism and job growth by the end-2009 to mid-2010. Until we see clear indications that the national economy is stabilizing, there will continue to be some uncertainty about the recovery.

However, the deeper, longer and more severe the national economic turbulence and downturn — if not recession — the more of an impact on Hawai'i's economy. In such a case, our projections will need to be revised downward. We are actively monitoring economic data, Federal Reserve actions and consensus economists' projections.

Reach Jeanne Mariani-Belding at jmbelding@honoluluadvertiser.com.