Japan spent billions on infrastructure projects over the past decade, yet still had economic stagnation. Now, the US is poised to enact the same economic policy to get us out of this rut. Will it work?
there are some critical differences, Japan seems to have primarily built bridges to nowhere and wasn't repairing/upgrading it's obsolete infrastructure as is the american focus of all the wonks and politicians.
the LA times looked at this idea and discussuses the left & rights stance.
I will confess my infatuation with building green infrastructure as an end in itself - if we gain a short-term economic boost, all the better. Green infrastructure is also a very urban issue - and our cities need all the help they can get.
it's doubtful...american business cycle has already been replaced by a boom/bust cycle. we need another boom...or are going to continue the painful "market correction" back to a real economy.
i don't know the numbers on infrastructure investment...but i suspect that they would be dwarfed by the amount of government money already involved in the military/industrial complex. frankly, we probably be much better off economically with another war than just repairing bridges & railroad tracks. putin is looking dangerously strong these days...perhaps it is finally time to engage russia directly in the war to end all wars.
as eisenhower did in the 1950's with the interstate highway system, obama should declare that infrastructure development and maintenance as a national defense issue and appropriate money from the defense budget to pay for it. now, back to football.
I think that it may be the answer. Updating and modernizing our infrastructure is something that we desperately need to be doing anyways, so why not start a new WPA type project on infrastructure. Vado has a good idea. The current spending on energy research (all energy research, not just renewables) is a drop in the bucket compared to the spending on defense research.
Here's two graphs that I posted on my schoolblog. Both come from a post on the blog of NYTimes writer Andrew Revkin.
This graph shows non-defense R&D spending from 1953-2007. Green is spending on energy. Yellow is spending on space. Spending on all forms of energy has been decreasing since the 70's oil crisis. Spending on defense is left off the graph because it is so overwhelming that it simply doesn't fit.
This graph shows gov't energy research spending at the far left in comparison to defense research spending at the far right. See the graphic bigger here.
i think it's a key to the puzzle, it will surely create some jobs and modernize our infrastructure, which is sorely needed. The problem is it's only going to add exponentially to our deficit/national debt problem.
The government needs to seriously cut out a lot of these ridiculous programs and bureaucracies that it runs and cut back the spending. Then they can keep our taxes low and hopefully somehow restore some confidence.
I've seen $400b as the cost for the 'smart grid' upgrade. This doesn't include the generation capacity, just the wires between the turbines and the end user.
If I recall, the dot com bubble was as much a product of the Y2k fix - so do we face a green bubble that will pop 10 years from now?
And that's in addition to the $15b/year that Obama is pledging for renewable energy.
I think it's def. going to be a bubble, we're just starting to see the very beginning of it. Renewable energy is going to be our next boom, and to every boom there's a bust.
first step, fix the credit crisis... the problem is, developers, companies, need credit to invest in growth... to build projects, to invest in their homes, etc. it's a global problem, but it starts with the u.s. financial market which needs stability... short term, we need to restore confidence and stability... unfortunately this means support for the struggling lenders, but long term, buying up assets *should* produce a return for the taxpayer... but long term we need regulation and government oversight that encourages responsible lending and investment rather than encouraging speculation and inflating housing and financial bubbles...
second, job creation and fiscal stimulus. fiscal stimulus in tax cuts for the middle class consumer... and smart investmentt in infrastructure... the money spent on developing infrastructure in the short term creates jobs directly, we get the economic multipliers of money injected into the system that carries over to other businesses, etc.
but the key i think is: the fiscal stimulus needs to produce real value, invest in things that actually benefit the efficiency of te economy, sustainable urban development, encourage new industries and economic growth, development in urban centers that continue to grow as markets... renewable energy is more than just infrastucture, it has an ongoing value that keeps on giving... also transportation infrastructure like regional light rail, etc...
technology, energy industries and infrastructure investments are valuable as fiscal stimulus, but they are also things that make us more competitive globally long run...
renewable energy does have incredible potential for growth. I think it's a bubble in the sense that we're going to keep getting better and better at producing it and eventually there's not going to be much money to be made in anymore. Everyone's going to be their own individual power plant, in some form.
I recently heard a very understandable and compelling argument which seems to sum up well many of the views in this thread.
After the bust of the great depression, the economy was helped back on track by new deal programs and world war 2 production. This 'boom' left us with tangible benefits. Factories, manufacturing jobs, increase manufacturing capacity as well as the social frame work for important modern economic foundations, particularly labor unions.
a few years the suburban building boom and the end of ww2 left us with interstate highways.
even in the 90's tech boom, we were left with what was at the time, some of the most advanced technological infrastructure on the planet.
this financial boom has left us with nothing. no tangible benefits except a glut of houses which are economically unsustainable.
we need to accept and embrace the fact that our economy will boom and bust, and make a concerted effort to direct our next boom at something which will leave a lasting positive impact...
i think of it sort of like the stages of a rocket...
btw... i think green technology construction whether it be upgrading of the power grid or the building of clean power plants will of course be a bubble. its bound by the same laws the rest of our economy is bound by. Eventually speculation will artificially inflate demand, and when supply finally catches up, we'll all realize we over shot by a few years... then thousands of people will lose their jobs as business are forced to shut down... billionaires will be come millionaires, and millionaires will go to prison for fraud...
but at least we'll be left with a first rate power transmission grid and cleaner energy production
Nov 12, 08 4:42 pm ·
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is infrastructure the economic answer?
Japan spent billions on infrastructure projects over the past decade, yet still had economic stagnation. Now, the US is poised to enact the same economic policy to get us out of this rut. Will it work?
there are some critical differences, Japan seems to have primarily built bridges to nowhere and wasn't repairing/upgrading it's obsolete infrastructure as is the american focus of all the wonks and politicians.
the LA times looked at this idea and discussuses the left & rights stance.
I will confess my infatuation with building green infrastructure as an end in itself - if we gain a short-term economic boost, all the better. Green infrastructure is also a very urban issue - and our cities need all the help they can get.
it's doubtful...american business cycle has already been replaced by a boom/bust cycle. we need another boom...or are going to continue the painful "market correction" back to a real economy.
i don't know the numbers on infrastructure investment...but i suspect that they would be dwarfed by the amount of government money already involved in the military/industrial complex. frankly, we probably be much better off economically with another war than just repairing bridges & railroad tracks. putin is looking dangerously strong these days...perhaps it is finally time to engage russia directly in the war to end all wars.
as eisenhower did in the 1950's with the interstate highway system, obama should declare that infrastructure development and maintenance as a national defense issue and appropriate money from the defense budget to pay for it. now, back to football.
I think that it may be the answer. Updating and modernizing our infrastructure is something that we desperately need to be doing anyways, so why not start a new WPA type project on infrastructure. Vado has a good idea. The current spending on energy research (all energy research, not just renewables) is a drop in the bucket compared to the spending on defense research.
Here's two graphs that I posted on my schoolblog. Both come from a post on the blog of NYTimes writer Andrew Revkin.
This graph shows non-defense R&D spending from 1953-2007. Green is spending on energy. Yellow is spending on space. Spending on all forms of energy has been decreasing since the 70's oil crisis. Spending on defense is left off the graph because it is so overwhelming that it simply doesn't fit.
This graph shows gov't energy research spending at the far left in comparison to defense research spending at the far right. See the graphic bigger here.
Sounds like China is going down that path....most likely we will follow.
WPA Art Projects were the best!
Timberline Lodge at Mount Hood is a fine example.
i think it's a key to the puzzle, it will surely create some jobs and modernize our infrastructure, which is sorely needed. The problem is it's only going to add exponentially to our deficit/national debt problem.
The government needs to seriously cut out a lot of these ridiculous programs and bureaucracies that it runs and cut back the spending. Then they can keep our taxes low and hopefully somehow restore some confidence.
I've seen $400b as the cost for the 'smart grid' upgrade. This doesn't include the generation capacity, just the wires between the turbines and the end user.
If I recall, the dot com bubble was as much a product of the Y2k fix - so do we face a green bubble that will pop 10 years from now?
And that's in addition to the $15b/year that Obama is pledging for renewable energy.
I think it's def. going to be a bubble, we're just starting to see the very beginning of it. Renewable energy is going to be our next boom, and to every boom there's a bust.
IMHO
first step, fix the credit crisis... the problem is, developers, companies, need credit to invest in growth... to build projects, to invest in their homes, etc. it's a global problem, but it starts with the u.s. financial market which needs stability... short term, we need to restore confidence and stability... unfortunately this means support for the struggling lenders, but long term, buying up assets *should* produce a return for the taxpayer... but long term we need regulation and government oversight that encourages responsible lending and investment rather than encouraging speculation and inflating housing and financial bubbles...
second, job creation and fiscal stimulus. fiscal stimulus in tax cuts for the middle class consumer... and smart investmentt in infrastructure... the money spent on developing infrastructure in the short term creates jobs directly, we get the economic multipliers of money injected into the system that carries over to other businesses, etc.
but the key i think is: the fiscal stimulus needs to produce real value, invest in things that actually benefit the efficiency of te economy, sustainable urban development, encourage new industries and economic growth, development in urban centers that continue to grow as markets... renewable energy is more than just infrastucture, it has an ongoing value that keeps on giving... also transportation infrastructure like regional light rail, etc...
technology, energy industries and infrastructure investments are valuable as fiscal stimulus, but they are also things that make us more competitive globally long run...
I don't really see energy infrastructure as a bubble... it's real value, it's *renewable*, it's exportable technology, has potential for growth...
i think that we should reward all of the infastructure contracts to either oversees firms or US firms that employ oversees workers
renewable energy does have incredible potential for growth. I think it's a bubble in the sense that we're going to keep getting better and better at producing it and eventually there's not going to be much money to be made in anymore. Everyone's going to be their own individual power plant, in some form.
I recently heard a very understandable and compelling argument which seems to sum up well many of the views in this thread.
After the bust of the great depression, the economy was helped back on track by new deal programs and world war 2 production. This 'boom' left us with tangible benefits. Factories, manufacturing jobs, increase manufacturing capacity as well as the social frame work for important modern economic foundations, particularly labor unions.
a few years the suburban building boom and the end of ww2 left us with interstate highways.
even in the 90's tech boom, we were left with what was at the time, some of the most advanced technological infrastructure on the planet.
this financial boom has left us with nothing. no tangible benefits except a glut of houses which are economically unsustainable.
we need to accept and embrace the fact that our economy will boom and bust, and make a concerted effort to direct our next boom at something which will leave a lasting positive impact...
i think of it sort of like the stages of a rocket...
btw... i think green technology construction whether it be upgrading of the power grid or the building of clean power plants will of course be a bubble. its bound by the same laws the rest of our economy is bound by. Eventually speculation will artificially inflate demand, and when supply finally catches up, we'll all realize we over shot by a few years... then thousands of people will lose their jobs as business are forced to shut down... billionaires will be come millionaires, and millionaires will go to prison for fraud...
but at least we'll be left with a first rate power transmission grid and cleaner energy production
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