"Don’t fill potholes. That won’t fix the economy."
I'm not certain of the author's intent, but the one and only way that government can actually create jobs is to improve infrastructure. A better transportation network built today will have payoffs 20 years down the line. Unfortunately, it's hard to build a political career on such long-term goals.
Not only that, but with strongly negative real interest rates, it can borrow money to pay people to fill potholes today for less than it would cost to wait.
In fact, it's better than that:
- That calculation doesn't include the savings in reduced wear and lack of deferred maintenance.
- Construction labor is now much cheaper than it would be at full employment.
- Growing consumption now would more than pay for itself in taxes from an averted "lost decade."
Unfortunately the folks in Washington are still worried about 3% inflation and how interest rates are going to spike any day now. So we end up with spending cuts that will almost certainly worsen the deficit over a do-nothing approach.
I'm not certain of the author's intent, but the one and only way that government can actually create jobs is to improve infrastructure. A better transportation network built today will have payoffs 20 years down the line. Unfortunately, it's hard to build a political career on such long-term goals.
One of my favorite Planet Money episodes deals with this: http://www.npr.org/blogs/money/2011/04/05/135151990/the-tues...