John Irons's Blog


Economic News, Data and Analysis

Stimulus and Infrastructure

Congress is looking to put together a second economic stimulus package (see below). This one may include funding for national infrastructure including roads, bridges and schools.
An often-heard criticism of this approach is that spending on infrastructure can come too slowly to have an impact.
One counter example to this point is the bridge collapse in Minneapolis from last August: the concrete for the replacement bridge began flowing last winter, and the bridge is now halfway done. They expect to be finished entirely by December.
There are many other projects, especially repair work, that can and should be done now–they need to be done anyway so why not accelerate the spending to stimulate the economy in the short-run? On schools, for example, “…the Portland Public Schools estimate an $800 million deferred maintenance backlog and the Los Angeles Unified School District estimates a $5 billion backlog in their existing facilities”.
The sooner we start, the sooner we can get our highways unclogged, our schools more energy efficient, and our bridges safer–all while stimulating jobs creation for our weak economy.

Democrats See a Need for Further Economic Stimulus –

On Tuesday, Nancy Pelosi of California, the speaker of the House, and other House Democrats met with economists to draft another stimulus package, saying it was likely to include spending for roads, bridges, schools and other public facilities, as well as aid for states confronting smaller tax revenues in the face of the housing downturn.
“This is a serious situation,” said Lawrence H. Summers, a former Treasury secretary in the Clinton administration who attended the meeting, according to Bloomberg News. “We are in much more danger of responding inefficiently than in responding excessively.”


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