Every Street is Dark And Folding Out Mysteriously

There is an emerging majority in Washington supporting an economic stimulus plan principally via spending increases. The current proposal is an $825 billion spending bill. One third of this money is to be spent on infrastructure.

The problem with this is that infrastructure spending provides little short-term stimulus. New roads take years to plan and mass-transit systems take longer. This is because here are all kinds of environmental, traffic, and neighborhood concerns to take into account, as well as lots of interest groups. There are not enough projects through this stage, just waiting for funding, to provide a significant stimulus. Even if there were, with the planning all in order, it takes much longer to actually build. The spending would be spread out over years or (for most major projects) decades. The Associated Press reports findings from congressional economists: “Overall, only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year, just 7 percent.” By that time, hopefully, the economy will be starting to recover. So, while it may be worth-while to increase infrastructure spending, it would hardly be a short-term stimulus. Mike Huckabee was rightly criticized in the primaries for proposing it as such.

I am of the opinion that the federal transportation system would see a greater benefit from a more efficient allocation of resources than from another 600 Bridges to Nowhere.

So, at best, new infrastructure spending would be relatively well-planned but insignificant as a stimulus. At worst, it will be wasteful, inefficient, pork-spending, that will lock the country into bad long-term solutions, and will still be insignificant as a stimulus.