{"id":1529,"date":"2011-08-30T19:33:38","date_gmt":"2011-08-30T19:33:38","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=1529"},"modified":"2011-08-30T20:38:51","modified_gmt":"2011-08-30T20:38:51","slug":"who-needs-free-lunch-anyway","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/who-needs-free-lunch-anyway\/","title":{"rendered":"Who Needs Free Lunch Anyway?"},"content":{"rendered":"

There appears to be a standoff brewing over renewal of the federal gas tax.\u00a0 The tax traditionally funds highway infrastructure projects and is due to be extended September 30th<\/sup>. \u00a0But a group in Congress, led by Senator Tom Coburn, is maneuvering to block the extension.\u00a0 A delay of just ten days, Ron Klain writes<\/a> in Bloomberg, would mean \u201cthe permanent loss of $1 billion in highway funding (and layoffs for thousands of workers).\u201d<\/p>\n

So not only must we accept the fact that there will be no new infrastructure or public works programs\u2014certainly nothing on a large scale that might begin closing the current employment gap\u2014but there will be an uphill political battle just to maintain existing funding.\u00a0 In other words, the policy battleground has shifted, such that the choice is not between maintaining the inadequate status quo and investing in a new public works program, but between the status quo and less <\/em>infrastructure investment.\u00a0 It is difficult to come up with novel ways of explaining why this is ridiculous.\u00a0 The fact that the real yield on Treasuries is negative gives us an excuse to rehash the case.<\/p>\n

The Levy Institute\u2019s research shows that investment in social care services, like home-based health care and early childhood care, yields twice the employment impact per dollar<\/a> as investments in physical infrastructure (for reasons suggested by Klain, who notes that federal roads programs have become less labor intensive over the years).\u00a0 But this does not mean that we ought to abandon investing in our physical infrastructure. \u00a0With 9% unemployment, just about any job creation measure will suffice.\u00a0 Moreover, jobs impact aside, maintaining our existing infrastructure is a necessity.\u00a0 Numerous studies<\/a> indicate<\/a> that the US needs to make <\/em>$2 trillion worth of necessary repairs to its roads, bridges, and sewage systems.<\/p>\n

The key word here is \u201cnecessary.\u201d\u00a0 The issue is not whether <\/em>to invest $2 trillion to make these necessary repairs.\u00a0 Unless we decide that we want to return to dirt roads the only question is when<\/em>.\u00a0 Right now we are well below full employment (with serious unemployment in the construction sector), and borrowing costs are not just low by historical standards, but comically low\u2014negative real yield territory.\u00a0 The federal government is being paid to borrow money.<\/p>\n

These conditions won\u2019t always hold.\u00a0 Borrowing to invest in infrastructure, right now, is about as close to a free lunch as you can get.<\/p>\n","protected":false},"excerpt":{"rendered":"

There appears to be a standoff brewing over renewal of the federal gas tax.\u00a0 The tax traditionally funds highway infrastructure projects and is due to be extended September 30th. \u00a0But a group in Congress, led by Senator Tom Coburn, is maneuvering to block the extension.\u00a0 A delay of just ten days, Ron Klain writes in […]<\/p>\n","protected":false},"author":202,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,49],"tags":[],"class_list":["post-1529","post","type-post","status-publish","format-standard","hentry","category-employment","category-fiscal-policy"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/1529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/202"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=1529"}],"version-history":[{"count":6,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/1529\/revisions"}],"predecessor-version":[{"id":1536,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/1529\/revisions\/1536"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=1529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=1529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=1529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}