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ARNOLD: Investing in infrastructure is road to recovery

By Howard Arnold

Published December 11, 2008 at 12:01 a.m.

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By any objective measure, our national economy is in serious trouble.

However, this crisis can evolve into an opportunity for the incoming Obama administration and the United States Congress to re-evaluate our national economic priorities in a manner that produces sustained growth, numerous jobs, and a robust middle class. America’s Building Trades Unions agree with President-elect Barack Obama that the key to an American economic recovery, and thus a global economic recovery, will be achieved by making substantial public investments in our physical infrastructure.

We are pleased that President-Elect Obama has taken a bold and optimistic approach to economic recovery. And it is an approach that we hope fundamentally re-evaluates and realigns our national core values away from a consumption-based economic ideal and toward a more sound, investment-oriented philosophy.

In taking a longer-term view of our economic recovery, President-elect Obama has rightfully concluded that we need to reconsider our national economic priorities and policies in a manner that places our nation on a path that is less dependent on the types of debt-financed consumption that has driven economic growth in the U.S. over the last decade -- and subsequently fueled our current economic collapse. The time is now to transition away from a consumption-based economy, to one that is investment-based and geared toward sustained, long-term growth that benefits Americans of all income brackets.

America’s physical infrastructure - which includes roads, bridges, water systems, sewage treatment plants, airports, subways, our public school buildings, broadband and other telecommunications systems, and our energy infrastructure, among others - is the platform upon which sustained economic growth will occur. Infrastructure development was the key driver that fueled our nation’s industrial dominance in the 20th century. Today, however, our physical infrastructure has fallen into major disrepair, which is dramatically hurting U.S. industry. In fact, the American Association of State Highway and Transportation Officials estimates that truck delays caused by overburdened highways and bridges add $7.6 billion a year to the cost of American-made products.

Just recently, in response to their own economic maladies, the Chinese government moved quickly to implement a substantial economic stimulus plan that is heavily based upon infrastructure investments. Over the next two years, China will spend roughly $590 billion -- 7 percent of its annual gross domestic product each year -- to construct new railways, bridges, highways, subways and airports. Asian markets welcomed the news of this stimulus plan -- as the Nikkei index rose 5.6 percent in early November.

Such investments, whether they occur in China or the United States, are a signal to investors, businesses and consumers that a particular country is committed to long-term, sustainable economic growth.

Public infrastructure investment not only creates jobs -- 47,500 jobs for every $1 billion invested -- but it also generates a healthy multiplier effect throughout the economy by creating a demand for materials and services. The U.S. Department of Transportation estimates that for every $1 billion invested in infrastructure improvements more than $6.2 billion in economic activity is generated. By some estimates, $150 billion in infrastructure spending would generate a nearly $240 billion increase (or close to a 2 percent increase) in Gross Domestic Product in the first year alone.

Many of the potential new growth sectors in the American economy will require major infrastructure improvements or brand new infrastructure systems. These new systems include an expanded energy grid to move solar and wind energy from the southwest to urban centers on the West and East coasts and to build a reliable grid that will support new nuclear and clean coal generation, as well as better broadband access and new airports to support the growth of agribusiness and new technology industries in the American heartland.

Rebuilding America, and rebuilding the American economy for the realities of the 21st century, is paramount. We have the means to do it -- all it takes now is the political will.

Howard Arnold is business representative for the Pipefitters Local Union 208 Denver.

Comments

  • December 11, 2008

    6:46 a.m.

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    Mike_In_Hartsel writes:

    The political will is bent to social programs. Gimme, gimme, gimme. This presents an opportunity for the various legislatures and Congress to hike taxes while threatening dire cutbacks in spending. Look out, here comes a major recession if they do.

  • December 11, 2008

    7:39 a.m.

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    denverrose15 writes:

    First of all... you'll have to tax the heck out of the American public and then you'll have to hire illegals because those people that are out of work go across the board, they are not all laborers and people who know how to build. This "future" plan will insure that once Obama gets amnesty for illegals he will then employ them. Doesn't sound too bad huh? except that those jobs are rewards to all those illegals and more incentive for more illegals to come especially because there is no plan to secure our borders.

  • December 11, 2008

    8:26 a.m.

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    Dub writes:

    And who praises this concept? Right, the UNIONS. They are the ones to benefit the most. How many unemployed IT people will be hired to finish concrete on a road project? How many non-union people will be hired? At a time when the mantra is to drive less, why build new roads? Is the government going to hire college educated workers by the thousands to build bridges? This whole idea stinks to high heaven.

  • December 11, 2008

    10:34 a.m.

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    dilligaf writes:

    Dub, denverrose15, & Mike_In_Hartsel:

    You three need to get a clue. First of all Mike you need to learn what socialism is. And Dub there will be a lot of non-union people benefit from this. It will put millions back to work. Which snow balls. The building of DIA in the 90's opened a lot of jobs here besides construction jobs. It is funny how you don't have a problem with us spending billions in Iraq rebuilding their infrastructure while they sit on billions of their own surpluses. I suggest you three go take a class in economics.

  • December 11, 2008

    11:33 a.m.

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    ILoveChipotle writes:

    So we'll be hiring half of the people to dig holes and the other half to fill those holes.

    And I guess we'll have massive deficit spending to get our way out of this problem. How long before we get double digit inflation again?

  • December 11, 2008

    2:51 p.m.

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    campesino60 writes:

    then, California adopted its zero-emission vehicle mandate in 1990 as part of an attempt to reduce smog-forming emissions such as nitrogen oxide.
    now, California regulators have drastically cut the number of zero-emission vehicles required to be sold in the state by the year 2014
    So it only makes sense that Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure its highways, bridges and roads this will drive the environmentalists bananas

  • December 11, 2008

    3:59 p.m.

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    prk166 writes:

    The claim that the last decade of growth we've had is largely debt-fueled is false.

    That aside, why the hell would someone point that out and turn around and endorse a butt ton of government spending, all of which is fueled by debt, as a means of recovering from recession?

  • December 13, 2008

    7:35 a.m.

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    denverrose15 writes:

    Gee dilligaf: You didn't give me any snide comment like you did the other two guys except to tell me I need to learn economics. HELLO! My problem with the whole things is where is the money will be coming from to finance this? RIGHT:::: AMERICAN taxpayers. Now we are talking about a year or two down the road and by that time most Americans will have taken other (maybe menial) jobs including those executives/white collar workers who are unemployed now. I know you have to spend some money to make money but again there is no single workforce available more readily then newly minted, AMNESTIED, former illegals. This is an easier way to transition them and tax them instead of them being on the fringe and what an easy way to justify amnesty. Of course those waiting legally for years to become citizens will get the message that doing things the right way is not the way to go. Problem is that a large percent of that money will go back to their homelands not to our economy. Maybe in the future their children will be able to contribute but I'm not holding my breath because their kids are NOT properly schooled (liberal agenda... i.e. bilingual education), not able to support themselves, not willing to integrate into American Society, etc. So... it is a problem that I am not willing to foster with my taxes.

  • December 14, 2008

    11:24 a.m.

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    fnvgis writes:

    Where will the money for all these "New Deal" programs come from? We either have to borrow it, raise taxes or print it up out of thin air. Each one of these options will result in a lowered standard of living for everyone. Our dollars will buy less and at the same time we'll be taxed more!

    The politicians will point to men building bridges and widening the roads and say, "Look at all the jobs we created." However, we wont see an actual rise in the employement figures because for every job they create a job will be lost (or not created) in the private sector. These make work actions will actually lengthen the recession!

    For a good understanding of this issue read Henry Hazlit's "Economics in One Lesson".