by Eric Martin
Following up on the recent analysis of the stimulus - which highlighted the stimulative effects of infrastructure projects - this Louis Uchitelle article makes another important point:
For the first time in memory, the nation has no outsize public works project under way. The Big Dig, with its three and a half miles of underground highways channeling traffic beneath downtown Boston, was completed in December 2007, the month the Great Recession began.
So what are we missing, exactly? Huge public works — or more precisely, their historic absence — didn’t cause the recession any more than their renewal would quickly draw the country out of it. But their effect on the economy is almost always noticeable if not easily measured. Some economists argue that the continual construction of new megaprojects adds a quarter of a percentage point or more, on average, to the gross domestic product over the long term. Again, cause and effect aren’t clear, but the strongest periods of economic growth in America have generally coincided with big outlays for new public works and the transformations they bring once completed.
In broad strokes, the development of modern, efficient infrastructure facilitates business activity. Not only are these projects useful as a stimulus when needed, but they have long term benefits that pay dividends for many years down the road. So where have all the infrastructure projects gone? Stephen Walt posits an answer with quote of the day month year potential:
But it's not as though the United States hasn't started some big public works projects over the past decade or so; it just hasn't been doing them here at home. We've spent billions constructing military bases in Iraq and Afghanistan, for example, and another billion or more on a giant embassy in Baghdad and another one in Pakistan. Needless to say, those "public works" projects are a drain on the U.S. economy rather than a source of additional productivity.
As I've said before, Americans have come to believe that spending government revenues on U.S. citizens here at home is usually a bad thing and should be viewed with suspicion, but spending billions on vast social engineering projects overseas is the hallmark of patriotism and should never be questioned. This position makes no sense, but it is hard to think of a prominent U.S. leader who is making an explicit case for doing somewhat less abroad so that we can afford to build a better future here at home. Debates about foreign policy, grand strategy, and military engagement -- including the current debate over Obama's decision to add another30,000-plus troops in Afghanistan -- tend to occur in isolation from a discussion of other priorities, as if there were no tradeoffs between what we do for others and what we are able to do for Americans here at home.
Not only that, but there is an overarching faith in the ability of the government to achieve grandiose social engineering objectives abroad in cultures it doesn't understand or have any meaningful connection to, yet as potent a belief in the hopeless incompetence and crushing bureaucratic inefficiency inherent in any domestic government program. Doesn't add up.
Maybe we can set up an efficient health insurance delivery system in Iraq or Afghanistan and then import it to the States. Call it a part of our COIN strategy, get Petraeus to endorse it and then ship it home under cover of night.
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