Monday, January 25, 2010

Infrastructure spending --- jobs and future growth

Infrastructure spending has been the missing piece of the recovery initiatives. As part of the major stimulus package this type of spending was at most 15% and it is unclear whether any of that has made it to "shovel ready" stage. Whether the issue is jobs or the economic revival of the country this situation is simply a mystery.

Infrastructure construction creates jobs, decent wage jobs. This type of construction creates demand for steel components, for specialized machinery, for engineering contracts, and myriad other goods and services. Infrastructure spending on our transportation system, such as deteriorating roads and bridges and the need for advanced rail systems, the need for airport refinements and modernization, and the need for city light rail are all foundations for the next era of growth if there is to be one.

The logic of this type of spending for near term good jobs and long term economic growth is is irrefutable. If this is not already part of the State of the Union address it should be added. We can run the deficit into the ground with transfer payments, class focused relief efforts, and subsidies for state shortfalls, but none of this creates "new" jobs or builds any kind of platform for future growth.


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