$50 Billion in Infrastructure Spending: A drop in the Bucket

The White House released the following statement regarding its new recovery plan: “The President today laid out a bold vision for renewing and expanding our transportation infrastructure – in a plan that combines a long-term vision for the future with new investments. A significant portion of the new investments would be front-loaded in the first year.”
This front load is worth $50 billion…a lot of money…but an insignificant amount compared to the size of what is needed. It is not a bold vision it is a very timid vision. Don’t believe me? Ask the American Society of Civil Engineers. In its 2009 Infrastructure Report Card, it gave a D average to US infrastructures and recommended $2.2 trillion of dollars of spending over the next 5 years. And that is just to bring current infrastructures back to good condition; trillions more are needed to respond to growing needs.

Money is not a problem for the federal government, all this could be started tomorrow like we have done to finance wars, bail outs the financial sector and other wasteful items. We did it before, when the country had a truly bold vision and was much less wealthy, and we could do it again. Besides current infrastructures, we need to start to use our underused resources (especially labor) to address the future needs of our aging population and our environmental problems: education, infrastructure, social networks, technology, energy, food production, and many others sectors need help.

9 responses to “$50 Billion in Infrastructure Spending: A drop in the Bucket

  1. "we need to start to use our underused resources (especially labor) to address the future needs…" Right on! Truer words have never been written.

  2. Timid indeed. When the end of existing triple standard of what the meaning of surplus money is comes to pass, this may then actually happen.Standard 1: Surplus Money is the flow of numbers across bank balance sheets, as needed;Standard 2: Surplus Money is the representation of net earnings;Standard 3: Surplus Money is the unpaid wages of workers;

  3. I agree, and my wish list includes a couple more propositions, for everyone; something I'm calling "So that the Classical Theory May Come Into Its Own Again" (this excites me).Private v. Public in a Game of Chicken we do not have time for.We can watch the "gamesmanship" for the next 15 years while the poor lose hope and the more affluent public rebuilds the wealth lost over the last four or, we can follow these propositions:1. (as observed) Government spending on Public Infrastructure projects (at least to the tune of what has been identified: $2.2 trillion);2.Lower the Federal Minimum Wage, supply Universal Health Care, and increase the amount of money available for food stamps and other benefits;3.Leave the Bush tax cuts in place for 6 months; revisit whether to leave these tax cuts in place every 6 months until the end of 2012. At that time, if the current administration is still going to be in office, determine whether to keep the tax cuts, revisit them similarly, or cancel them;4.Let Wall Street determine how they want to set up a Cap and Trade system, but it will be in place by 2012, and enforced by a new Government Agency; 5.“Green Light” 4 large projects for Government contract, nominally: a nuclear power plant, a wind farm, a solar farm, and a water desalination plant; and6.A soda tax.(as mentioned) Take the deficit hawks bowling, for they should know how to keep score. Currency valuation will be reflective of the current value, quality, and soundness of these propositions and of our desire to take care of our own; in other words, let the world speculate.To seal the deal, put the Federal Reserve under a “performance contract” and change their mission to one of targeting inflation at 1.7%. We need to be more like Sweden.Chicken: 15 years of doing and moving or 15 more years very similar to this last one. The choice is ours.

  4. From what I have read, the ASCE gave a "Gentleman's D" – really, it was an "F".

  5. It's frightening how much our infrastructure has degraded. It's even more frightening how little our government is willing to invest in the things that bring us a civilization, e.g. roads, railways, sanitation, health-care, etc…

  6. The booms, busts, jobless recoveries, fast changing economy, exploitative profit seeking, rampant fraud, and inconclusive debates over the past 20 years have paved a irreversible path. General consensus among people is that NOTHING IS GOING TO WORK, you can't trust the government to do anything right, corporations are only interested in exploiting you on both ends, and the whole power system is corrupt. You can't believe anyone, sooner or later within capitalism everyone wants to sell you some line of crap and the truth is irrelevant. You guys can speculate and criticize all you want to, in effort to preserve your livelihoods, but the fact of the matter is that economic collapse is going to be a result of a collapse in social trust at all levels. When people don't work or spend, because they don't want to work or spend, no banker, economist, or public official will be able to fix the problem!

  7. Hi,A great post. Can you provide any links or data on how to calculate the output gap in America?E.g, how do we calculate potential GDP? What is a good estimate of the Keynesian multiplier? Is the multiplier different for different types of spending? I am trying to deal with these issues on my own blog where I support Post Keynesianism: Social Democracy for the 21st Century

  8. I happened to have had this discussion a few days ago with an unlikely source. I was riding with my son, who has just finished seventh grade, in the car listening to the radio. An advertisement came on for a debt settlement company. credit repair advice

  9. There are many debates going on about role of government to get economy back on truck. The chief executive of Coca-Cola Muhtar Kent says that unemployment is still high and companies continue to deleverage. He stresses that nobody is borrowing at all, even at zero interest rates. He believes that there is still a continued role for government. Financier George Soros thinks that what the US economy needs is that is public spending projects to boost the economy. He says that state should provide the fiscal stimulus to decrease unemployment because the private sector is not able to provide enough employment. He points out another reason why government is supposed to step in. What is happening right now is that the private sector is having healthy profit margins. With low level interest rate, companies do not invest that money. What they are doing is that they are hoarding that money to preserve their own liquidity in difficult market. That is a complete liquidity trap and fiscal policy becomes all powerful if an economy is in one. So $50 Billion in Infrastructure is definitely not enough. US economy needs more and more…