Can Infrastructure Spending Rev Up The Economy? President-elect Obama says he will put infrastructure spending at the heart of an economic stimulus package. Critics question whether projects could start soon enough to jum-start the economy. Others say green energy proposals could have short- and long-term benefits.
NPR logo

Can Infrastructure Spending Rev Up The Economy?

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Can Infrastructure Spending Rev Up The Economy?

Can Infrastructure Spending Rev Up The Economy?

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


From NPR News, this is All Things Considered. I'm Robert Siegel. The Dow Jones Industrial has jumped nearly 300 points one day after President-elect Barack Obama announced plans for massive federal spending. Mr. Obama said he would lead the biggest federal investment in infrastructure since the interstate highway system. He is also planning to boost government spending in other areas for the sake of both short and long-term growth. NPR's Scott Horsley has this story on how economists are viewing the plan.

SCOTT HORSLEY: Representatives of state transportation agencies were on Capitol Hill today trying to drum up support for a huge new government building boom. Tony Dorsey of the American Association of State Highway and Transportation Officials says every billion dollars the federal government commits to roads, bridges and the like helps to support some 35,000 jobs.

Mr. TONY DORSEY (Spokesman, American Association of State Highway and Transportation Officials): You're talking about every kind of job that's associated with the transportation infrastructure project, from the people that actually make the steel to the people who build the project.

HORSLEY: Faced with their own budget shortfalls, many states have had to defer those kinds of projects. Dorsey's group has identified some $64 billion worth of work that's all ready to go, just waiting for someone to write the check.

Mr. DORSEY: These projects can be under contract within 180 days. They've been engineered. The environmental impact studies have been done. All they need is the investment from the federal government to help them to get off the shelf and put people to work.

HORSLEY: Speed counts because part of the government's goal is to get the extra money flowing into the economy as quickly as possible. Economist Alan Viard of the American Enterprise Institute is skeptical that infrastructure projects are the best way to do that, a concern the president-elect's own economic advisers have raised in the past.

Dr. ALAN VIARD (Resident Scholar, American Enterprise Institute): Even if you start these things right away, some of them are just very long-term projects, and so very little of the spending is going to occur in the near term. In general, infrastructure spending is too slow, and it's not really a good stimulus tool. But certain things like road repair could be done more quickly.

HORSLEY: President-elect Obama said on "Meet the Press" this weekend he would focus on projects that get the money moving quickly.

(Soundbite of "Meet the Press")

President-elect BARACK OBAMA: I think we can get a lot of work done fast. When I met with the governors, all of them have projects that are shovel-ready.

HORSLEY: The president-elect also hopes to use the economic stimulus package to fund initiatives that are valuable in their own right, such as making medical records available electronically and retrofitting buildings to make them more energy-efficient.

President-elect OBAMA: The key for us is making sure that we jump-start that economy in a way that doesn't just deal with the short term, doesn't just create jobs immediately, but also puts us on a glide path for long-term sustainable economic growth.

HORSLEY: One such proposal comes from the Center for American Progress, a thinktank founded by the president-elect's transition chief, John Podesta. Earlier this fall, the center recommended that the government spend $100 billion on energy efficiency, renewable energy, and mass transit to promote what it calls a green recovery. University of Massachusetts economist Robert Pollin says that effort would create some two million jobs over the next two years. He says all kinds of workers would benefit.

Dr. ROBERT POLLIN (Department of Economics, University of Massachusetts-Amherst): It is not just the construction workers that show up on the site. It's the people that serve them lunch. I mean, they also get a job boost. It's the truck drivers that deliver the materials. It's the accountants. All of these types of jobs get created through a green investment agenda.

HORSLEY: Pollin says any massive increase in government spending would create some jobs no matter how the money were used. He favors building retrofits because they require a lot of workers here in the U.S. and because the resulting efficiency delivers a long-term payoff.

Dr. POLLIN: Even if we spend a lot more money than we actually end up needing in the short term, we're still going to get the long-run benefits. We will have made major investments towards creating the clean energy economy that we all know we need.

HORSLEY: The president-elect still hasn't specified a price tag for his proposal, but Congressional leaders have been talking about a program in the range of half a trillion dollars. Scott Horsley, NPR News.

Copyright © 2008 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.