Our infrastructure is crumbling. There are potholes, dangerous bridges. decaying buildings. [View all]

[mfcorey1]

Major investment is needed.

http://www.thefiscaltimes.com/Columns/2013/01/29/One-Investment-that-Can-Reduce-Our-Long-Term-Debt.aspx#page1



Suppose we could enhance our long-run growth prospects, reduce our long-term unemployment problem, and reduce our expected future debt at the same time. Would that be a policy worth pursuing?

Infrastructure spending in an economy such as ours, one with high and persistent unemployment and considerable infrastructure needs, has these features. It puts people to work on projects that promote economic growth – economic growth is one of the best ways to reduce the long-run debt burden – and money spent on infrastructure maintenance and repair saves us money in the long-run.
How can spending more now, which increases the deficit, decrease our long-run debt burden? Consider spending on infrastructure maintenance and repair first, and think about a similar situation for households and firms. When a household hits hard times due to unexpected expenses, it’s possible to delay routine maintenance on things such as the car that is needed to get to work each day. The same is true for a business. When times are tough, maintenance on the production line, the trucks needed to deliver goods, and so on can be put off. But it cannot be delayed forever, and the household or business may need to borrow money to pay for the maintenance and repairs even if debt burdens are already relatively high.

Read more at http://www.thefiscaltimes.com/Columns/2013/01/29/One-Investment-that-Can-Reduce-Our-Long-Term-Debt.aspx#AUxtdrPcPGQZ6C9I.99