Laura Tyson – Why We Need a Second Stimulus – NYTimes.com

Laura Tyson – Why We Need a Second Stimulus – NYTimes.com.

Laura Tyson, member of the Presidential Economic Recovery Advisory Board (PERAB), describes important components needed in an infrastructure-focused second stimulus. The benefits of infrastructure investment are numerous, creating jobs several orders out beyond the road workers and civil engineers involved in construction. Building or rehabilitating functional assets facilitates long-term economic growth, energy efficiency, environmental protection, and individual savings from reduced commuting time and diminished vehicle wear and tear. Most of the argument is boilerplate (citing ASCE/CBO figures) but it represents a significant voice advising the President and is still right on the mark, regardless of how often these specific arguments are made or the political realities of getting anything passed with an obstructionist sophistic party impeding necessary action to ignorantly grandstand.

An increase in government investment in roads, airports and other kinds of public infrastructure would be cost-effective, too, as measured by the number of jobs created per dollar of spending. And it would help reduce the road congestion, airport delays and freight bottlenecks that reduce productivity and make the United States a less attractive place to do business. The American Society of Engineers has identified more than $2.2 trillion in public infrastructure needs nationwide, and a 2008 study by the Congressional Budget Office found that, on strict cost-benefit grounds, it would make sense to increase annual spending on transportation projects alone by 74 percent.

Over the next five years, the federal government should work with state and local governments and the private sector to finance $1 trillion worth of additional investment in infrastructure. It should extend the Build America Bonds stimulus program, which in the past year has helped states finance $120 billion in infrastructure improvement.

The federal government should also create and capitalize a National Infrastructure Bank that would provide greater certainty about the level of infrastructure financing over several years, select projects based on rigorous cost-benefit analysis, invest in things like interstate high-speed rail that require coordination among states and attract private co-investors in projects like toll roads and airports that generate dedicated future revenue streams.