Infrastructure


INFRASTRUCTURE….What kind of infrastructure program is Barack Obama likely to support once he gets into office? Well, Obama’s choice to head up the OMB is Peter Orszag, so Alex Tabarrok suggests looking at Orszag’s previous statements on infrastructure when he was head of the Congressional Budget Office.

With that in mind, then, here’s a chart from testimony he gave to Congress last May. For a range of activity, it shows that the infrastructure budget ought to be increased $20 billion to maintain current service levels, but that nearly $80 billion more could be economically justified. However, here’s what he says about the highway portion:

[A]ccording to a detailed analysis that the FHWA provided to CBO, over the next five years, investments required to maintain current levels of highway service would represent 58 percent of the total spending for all economically justifiable investments for highways, but they would provide 83 percent of the net benefits.

More than likely, then, Orszag won’t be pushing for lots of additional spending on roads and bridges, since he believes the net benefit is pretty small once you get past the initial boost needed just to maintain the current system.

Alex suggests that Obama should instead focus on congestion pricing and electricity infrastructure (the famous “smart grid” that everyone talks about but no one ever seems to make any progress on). Here at Mother Jones, in a piece that just went online today, James K. Galbraith proposes a long-term investment program (not just a “stimulus”) that includes aid to states, increased Social Security benefits, a payroll tax holiday, and this:

Finally, we must change how we produce energy, how we consume it, and above all how much greenhouse gas we emit. That’s a long-term proposition that will require research and reconstruction on a grand scale: support for universities, for national labs, for federal and state planning agencies, a new Department of Energy and Climate. It’s the project around which the economy of the next generation must be designed. It’s the key to future employment and future growth — and to our physical survival.

Obama’s radio speech this weekend outlining his stimulus-related spending plans had some decent points but wasn’t exactly a barnburner. After he rolls out his environment team later this week, hopefully green energy development and smart grids will get a little more attention.

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