December 1, 2012 by David K. Sutton
Eliot Spitzer – Number of the Day: New Roads Equals Two For One Bargain
If I’ve repeated one thing more than any other, it’s the need for increased infrastructure spending. And the reason is simple — upgrading America’s roads, bridges, rail, electrical grid, etc. makes for good use of public money. In the case of roads, we get better roads, more jobs and the economic impact could be immeasurable. Take for instance the highway system, and all the businesses that sprang up along highway exits, as well as all the business centers that could not exist without highway access. And all in just one lifetime.
It turns out you can measure the impact of upgrading roads after all.
Do you want a great bargain for the holiday season? I’ve got one for you, and it’s our number of the day: two for one. That’s the deal the country gets from spending on infrastructure. This isn’t just some ginned-up number from a lefty group interested in trying to make government bigger. The Federal Reserve Bank of San Francisco looked at a classic kind of infrastructure project: road construction. Turns out that for every dollar of federal highway grants that goes into a state, that state’s annual economic output goes up by at least $2. That’s a much better return than typical government spending. Plus, the payback goes even higher during an economic downturn. We’ve also known for a while that money for infrastructure in general creates more jobs than spending on defense or tax cuts. So if you’re making a federal wish list, here’s a gift that really keeps on giving: Fix a road.
– Eliot Spitzer