Let’s Infrastructure Our Way Out of this Mess
An interesting debate took place recently on the People’s Radio Station, NPR. It was between Robert Frank of Cornell University (Ivy League) and the kook Russ Roberts of GMU (non-Ivy League).
Frank makes the very salient and logical point that we should spend money while it is cheap to improve our infrastructure.
Borrowing costs are at all-time lows right now. This is for no other reason than that the dollar is the strongest currency in the world and everyone wants them. With rates so low, money is practically free so we should borrow as much as we possibly can and invest it in our infrastructure.
By making better train tracks, all of the millions of people that ride trains daily can more efficiently ride trains. This will increase productivity to the point that the return on investment exceeds the measly investment and we’ll create a bunch of jobs. Win/win. Oh, the measly investment is $2 trillion.
This is exactly what Japan has done since their economy crashed to get themselves out of recession. It is also what the US did as soon as Obama was elected and probably why we don’t have close to 50% unemployment right now.
So, as I’ve already established, this money is free, we can get a return on investment that exceeds the cost and Frank is a professor at an Ivy League university. The investment is only $2 trillion, so no big deal really.
Russ Roberts disagrees of course (otherwise it wouldn’t be a debate). He is an ineffective arguer and honestly I didn’t really listen to what he had to say. He did raise his voice a lot though.
Oh, he did say that if this spending was necessary we have means to do so already established, so why not use those? Duh: Republicans not reaching across the aisle to do what is right for America, Russ.
We need to do something to finally get ourselves out of the Bush-caused Great Recession of 2008 and Robert Frank’s plan to spend a bunch of money we don’t have makes a lot of sense to me.