Obama's Proposed Investment in American Infrastructure
President Obama proposed yesterday spending more than $50 billion over the next six years to modernize the transportation infrastructure in the United States. He is calling for renovations to or creation of 150,000 miles of roads, 4,000 miles of rail, and 150 miles of airport runways. The $50 billion would be an up-front cost, paid by closing tax breaks for oil and gas companies, and would comprise the bulk of the cost.
The American Recovery and Reinvestment Act of 2009 (the 2009 economic stimulus) designated $105 billion for infrastructure improvements last year, and coincidentally, the $7 billion spent from 1936 to 1939 by the Works Progress Administration mostly on similar projects would be the same as spending $105 billion in 2009 thanks to the effects of inflation. We would assume that the results of the ARRA should mirror the results of the WPA.
The WPA provided jobs, crucial infrastructure upgrades, and even major cultural advances, even though critics say some of the money was wasted. The positive effects also took some time to be realized, though it had a relatively immediate effect on jobs. In a tough political climate, Obama wants to speed the process and provide more jobs by infusing more capital into infrastructure projects.
The proposal may be a moot point as a law to authorize the spending might never be passed by Congress. But if it does, and it survives similar to the president’s proposed form, it carries some interesting ideas. First, an infrastructure investment bank would be created to determine which projects receive funding, supposedly based on return on investment, not political connections. Investment in smarter roads and high-speed rail lines would allow the United States to become competitive with other developed and developing nations around the world who have already seen these technological advances.
On a practical level, improving roads seems to be an endless project. Not far from where I live, US Route 1 in the New Brunswick area has been in a constant state of construction. The Route 1 intersection with Route 130 in North Brunswick was finished to remove traffic lights a few years ago, and besides planned intersection upgrades throughout the Route 1 corridor, the past year traffic has been slower due to a project to widen the highway as it passes near Rutgers University.
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It’s nice to see that the new proposal has a mechanism for being paid for, in other words, not increasing the budget deficit. But really, those tax breaks should be ended no matter what.
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Stop building roads and invest in public transportation.
That would be great. Ideally, I’d say there should be a commuter rail line along all of the major interstate highways.
Not long ago I was doing some reading about the earlier depression and found that the political climate was just as charged as it is now. Many of the projects failed. But as we look back we can enjoy the dams, highways, and parks. Guess change and improvement does have a price. I’m particularly excited about the new energy projects. They are long overdue.
Hey Flexo, I didn’t realize that we lived so close! I actually work at RU!
I just hope that these infrastructure projects are well thought out and are efficient. Our governments (local and federal) have a habit of being terribly inefficient with our money!
The climate today is so much different than the 1930’s that comparisons are useless. WPA put people to work and profits back into American companies. WPA 2010 should put some people back on the job but the good paying jobs will be at the infrastructure investment bank and government oversight infrastructure that will be funded along with it. Likewise a lot of profits will be heading overseas to France, Germany and Japan. Oh, one more thing, in today’s climate we will see special interest and politics place many many speed-bumps along the tracks. In California, the French companies working on their rail system improvements are being sued for restitution because they may have transported Jewish internees in WWII and the “not in my backyard syndrome” is alive and well in affluent communities lawsuits. It’s not that I like shooting holes in government programs but let’s get real; Closing loopholes – never worked before because lobbyists will ensure other ways and means become available to the corporate taxpayer. Years from now; the ROI will be better roads and rail service for our grandchildren so they can work their rear ends off to pay this debt.
Edward; I’m in Missouri so I have no idea about Route 1 – but I saw Jersey Boys in Vegas last July and loved it!! (I guess I just gave away my age bracket)
Steved,
Actually, I love the Four Seasons myself, and I’m young enough that even my father was too young to see them live.
There is still money left from that 2009 stimiulus why isn’t that being used before getting new money?
Lately, I’ve been wondering if the gains produced by employing so many people in road construction aren’t negated by productivity losses of people stuck in traffic.
Last summer, I drove cross-country to move and I believe that every bridge on the Nebraska stretch of I-80 was under construction. Those delays contributed to me being late in my arrival and my (then) fiancee had to find a ride home that night.
This summer, my wife and I went on a mini-vacation in the mountains to celebrate our anniversary. I-25 to Denver had several successive construction zones and it took over 2 hours to dive 50 miles. The I-25 corridor is a major commuting route between the Denver area and northern Colorado. I shudder to think at the thousands of hours lost to traffic there in the name of economic stimulus.
On an unrelated note, being a Jersey boy in my roots, whenever you write about places like Princeton and Route 1, I get a little homesick.
It is very unfortunate that the best time to do road construction is also the time when most people are on the roads. To bad you can not fix the roads when less people are traveling – I hate driving in the summer and hitting road construction!