The Big Question: Is Obama's infrastructure plan a good idea?

Some of the nation's top political commentators, legislators and intellectuals offer insight into the biggest questions burning up the blogosphere today.



Today's question:

Is President Obama's $50 billion infrastructure plan a good idea? Why or why not?

Dean Baker, co-director of the Center for Economic and Policy Research, said:

This is good, but nowhere near enough. The shortfall in annual demand due to the collapse of the housing bubble is more than $1.2 trillion (roughly $600 billion in lost consumption and $600 billion in lost construction).

Spending $50 billion on infrastructure fills about 4 percent of the gap. That is a start, but we need to do much more to both boost the economy and rebuild the infrastructure.

Peter Navarro, professor of economics and public policy at U.C. Irvine, said:

This may (or may not) be a good investment but it is certainly bad fiscal stimulus. Any stimulus must be, as Larry Summers himself once mused, “timely, targeted, and temporary.” This latest plan has at least two strikes against it.

A.B. Stoddard, associate editor and columnist at The Hill, said:

At this point in the campaign season good ideas for legislation don't matter much anymore. Democrats have run out of time to change the minds of motivated voters who oppose them by up to 20 points in some polls. They can't turn out their own voters with an infrastructure bill, and they don't have time to pass one. This is the kind of plan that could have worked earlier on in this session of Congress, perhaps in 2009 as part of the first stimulus package. Now it is just a target for the GOP to criticize the first stimulus and all the "shovel-ready" projects it has failed to produce. The new proposal also means more spending and a government bank — sounds like a Republican campaign ad.

Frank Askin, professor of law at Rutgers University, said:

Obama's $50 billion infrastructure plan is part of a good idea. It just doesn't go far enough. We need much more stimulus to get the economy moving and the job market to pick up.

Michelle D. Bernard, president and CEO of the Independent Women's Forum, said:

More Deficit Spending Isn't Going to Fix This Economy
In 2009, we were assured that the first stimulus (which totaled in the neighborhood of $800 billion) was going to be used on “shovel-ready” infrastructure projects, which would stimulate demand, create jobs, and help turn this economy around.  More than a year later, it's clear that this hasn't panned out.  Growth is sluggish, unemployment is still high, and even businesses flush with cash are reticent to hire or expand since they don't know what the economic climate will be in the months to come.


It seems impossible to imagine that a new $50 billion for infrastructure spending—that's small potatoes compared to the first round of stimulus spending— will yield any meaningful results in terms of improving our economic prospects. In fact, it seems a safer bet that the new stimulus simply add to our already alarming deficit and to nation's sense of desperation, which will further undermine our economic prospects.


More deficit spending will not turn this economy around.  Washington should focus on providing businesses with the certainty they need to invest, expand, and hire. Policymakers need to assure the private sector that taxes aren't going to go up and squeeze their budgets even more.  Instead of throwing more taxpayer money at projects of questionable value, policymakers should try to cut wasteful spending to reassure the financial world that the U.S. is serious about fiscal responsibility.  Instead of toying with additional regulations and adding burdens to businesses, Congress should focus on making it easier for companies to hire.


There are better ways than more infrastructure spending for Congress to use billions—or better yet, they should not spend it at all.
 

Justin Raimondo, editorial director of Antiwar.com, said:

It's a terrible idea, but one that fits in perfectly with the administration's "let's throw cash out of helicopters" Keynesian model of economic "growth."

Sure we need "infrastructure," but government inevitably mis-allocates resources because everything government does is ... political! A member of congress lobbies for funding to come to his or her district-- a new bridge, a new highway, whatever -- and it is appropriated on account of political pull, not economic (or physical) necessity.

For one good albeit anecdotal example: the "stimulus" money is being used where I live in Sonoma county, California, to re-pave roads that don't need re-paving. So this Labor Day weekend, when tourists were on their way to Sonoma county for a little rest and relaxation, they couldn't get where they were trying to go because the roads were blocked and there was a tremendous traffic jam on Highway 116. I wonder how many tourists turned back and said to hell with it -- thus depriving us of much-needed tourist dollars.