The point has been made repeatedly over the past few years: Increasing investment in infrastructure can be good for the economy, as long as it’s done right.
Today, as President Obama touted the benefits of infrastructure investments at a White House press conference, the Treasury Department and his Council of Economic Advisers released a report underscoring his arguments.
Among the key findings:
- There is currently very little private sector infrastructure investment. Creating a “National Infrastructure Bank” could help stimulate private “support for projects that yield the greatest returns to society and are most likely to deliver long-run economic benefits that justify the up-front investments.”
- The overwhelming majority of the jobs created by infrastructure investment — some 61 percent — would be in the struggling construction sector. Another 19 percent would be in manufacturing.
- “The average American family spends more than $8,600 a year on transportation, one-third more than they spend on food” and more than one-sixth of the budget of the average family not in the top 10 percent of income-earners, a burden the report attributes to “the lack of alternatives to expensive and often congested automobile travel.”
- The recession has lowered construction costs, increasing the potential return on investment.
The report also singles out the benefits of high-speed rail projects, such as the one from Tampa to Orlando:
High speed rail has the potential to link the American people together in a way that would not be possible under the current infrastructure system. Reducing intercity travel times, with trains reaching top speeds of 220 mph, could transform how and where Americans live and work, revitalizing regions and supporting new jobs.
“There are real costs to not investing in infrastructure, including increased congestion and foregone productivity and jobs,” the report concludes. “Already, Americans are wasting too much time, money and fuel stuck in traffic.”
Ezra Klein of The Washington Post sums up the report with this headline: “Infrastucture: The right jobs for the right people doing the right things at the right time.”
But the question remains: Where will the money come from? Klein has a chart showing that low yields on Treasury notes mean it’s relatively cheap for the federal government to borrow money. And the report calls for increased state, local and private investment to supplement investment at the federal level.
The full report is below: