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John Hennessy III,

How Infrastructure Investments Support the U.S. Economy: Employment, Productivity and Growth

Posted by Content Coordinator on Thursday, July 16th, 2009

“The United States system of civilian public infrastructure has deteriorated badly over the past generation. The breaching of New Orleans’ water levees in 2005 in the wake of Hurricane Katrina and the collapse of the I-35W bridge in Minneapolis in 2007 offered tragic testimony to this long-acknowledged but still neglected reality.

After this generation of neglect, the project of rebuilding our infrastructure now needs to be embraced as a first-tier economic policy priority, and not simply to prevent repetitions of the disasters in New Orleans and Minneapolis. The more general point is that infrastructure investments are essential for the functioning of the U.S. economy. According to the U.S. Bureau of Economic Analysis, total public assets, excluding defense, were valued at $8.2 trillion in 2007. This represents approximately 50 percent of the stock of all non-residential private assets—a formidable asset base which underpins the national economy.

Core economic infrastructure—in the areas of energy, transportation, and water and sewerage—is particularly important in maintaining economic performance. However, therate of public investment in these core areas began falling in the 1970s and has not returned to its previous levels since then. As an average since 1980, the growth of infrastructure investment has lagged behind overall economic growth. The result has been a worsening infrastructure deficit and mounting investment needs.

With the rapid deterioration of economic conditions in recent months and rising unemployment, public investment is back on the policy agenda—as a job-creation program linked to the need to revitalize the nation’s crumbling infrastructure. In November 2008, President-elect Obama announced his intention of creating 2.5 million jobs by introducing a large-scale public investment program during his first two years in office. Since this initial announcement, the proposed size of the stimulus package and the job-creation targets have varied. Nevertheless, public investment remains at the center of thinking about the ‘new New Deal’—the set of policies that are needed to address the ongoing crisis…”

How Infrastructure Investments Support the U.S. Economy: Employment, Productivity and Growth

About Alliance for American Manufacturing
“The Alliance for American Manufacturing (AAM) is a unique non-partisan, non-profit partnership forged to strengthen manufacturing in the U.S. AAM brings together a select group of America’s leading manufacturers and the United Steelworkers. Our mission is to promote creative policy solutions on priorities such as international trade, energy security, health care, retirement security, currency manipulation, and other issues of mutual concern.”


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