Thursday, November 15, 2012

Public Investment Pays Big Dividends

By Dale Bowling

Once Republicans work their way through the seven stages of grief (I think they might still be stuck in denial), the work of governing America can resume. But this leads us to the question, what should
America's priorities be going forward?

Rightly, the first and foremost thing that Congress and the President need to do is avoid the fiscal cliff. This will involve some sacrifices on both sides -  Republicans are going to have to accept higher taxes on millionaires and Democrats will likely have to accept some unpalatable spending cuts, but as long as both sides are willing to make some sacrifices disaster can be avoided in this entirely self-created crisis.

Second, economic growth must be reinforced through government action. One of the main things that would greatly benefit America is spending on infrastructure. The American Jobs Act would create several million jobs by improving America's roads, bridges, highways, sewer and water systems, etc. The AJA would get the process moving on shovel-ready projects and create jobs in the process.

It wasn't so long ago that America's infrastructure was the envy of the world. A mere decade ago, we
were ranked fifth in the world in overall infrastructure, but over the last 10 years we have dropped to
25th. There is currently a $2 Trillion backlog of repairs and this is only going to get worse with time if we don't do something now.

Clearly the American Jobs Act would just be the beginning.

Spending on infrastructure stimulates the economy in numerous ways so taxpayers get a lot of bang
for the buck. It's a taxpayer-funded investment that pays big dividends back to taxpayers.

Construction is labor intensive, so it employs a lot of people directly. They take their hard-earned
money and buy stuff from other people who add on employees to meet the rising demand. So a large
infrastructure bill would ripple through the economy and create jobs at the grocery store, the mall, the
car dealership, the restaurant, etc. 

Also, local companies benefit from supplying raw materials to construction projects. So infrastructure
spending helps buoy the local manufacturing industries near where the money is spent. Then they take their money and buy stuff which creates more jobs.

And ironically all this spending saves money for taxpayers and private citizens in the long run. Old
pipes leak waste water that towns spent good money to treat and make usable. Old roads cost drivers
more in gas and repairs and time commuting.

Conversely, good roads bring down the cost of products and services by making them cheaper to move.

And of course, if we're going to be on the receiving end of a SuperStorm Sandy or a Katrina every few years, it would be nice to have infrastructure which can withstand them.

At the end of it, the Nation will have a brand new system of highways, bridges, etc. which can fuel
economic growth for decades.

What is needed is for Americans to stop thinking of government spending as wasting money and start
thinking of it as an opportunity and for members of both parties to put politics aside and seize this
opportunity for America.

Without government action, the US will soon have a Third World system of infrastructure. And can a Third World economy be far behind?

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