Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, traces the history of infrastructure spending as economic stimulus to the massive public works programs launched by President Franklin D. Roosevelt in response to the Depression.
"From the Works Progress Administration of the Great Depression to the Accelerated Public Works Act of 1962 and the Local Public Works Capital Development and Investment Act of 1976, investment in public infrastructure has created and sustained jobs in difficult economic times," Oberstar said recently, "and it can do so again today."
Former Treasury Secretary Lawrence H. Summers, who is a possible Treasury secretary in an Obama administration, told a congressional committee that "properly designed infrastructure projects have the virtue of being helpful as short-run stimulus, especially for the employment of the workers most hard hit by the housing decline, while at the same time augmenting the economy's productive potential in the long run."
The liberal Economic Policy Institute estimated that $75 billion in infrastructure spending would create 1 million jobs.
Infrastructure spending creates "economic ripple effects across the entire economy -- for example, by providing more business for construction equipment manufacturers and the steelmakers that supply them -- and this money will quickly circulate back into the economy as workers spend their salaries, increasing overall demand for goods and services," the institute said in a recent paper.
Mark Zandi, chief economist of Moody's Economy.com, estimates that every dollar of infrastructure spending boosts the gross domestic product by $1.59.
Government and industry officials insist there are plenty of projects they can start quickly.
Jared Bernstein, a senior economist at the Economic Policy Institute, cited $100 billion in deferred maintenance and repairs at 16,000 public schools, involving such things as antiquated wiring and leaky plumbing. He said that most of the projects could be completed in 60 to 90 days.
In California, Department of Transportation Director Will Kempton said that the state has as much as $1 billion worth of transportation projects that could be undertaken within 180 days. Many of those could be launched within 90 days, he said.
"These projects are ready to go, and we don't have the money. So they're sitting in a queue, waiting for these dollars to become available," he said.
