Sunday, August 22, 2010

Can infrastructure-led growth save the economy?

Can infrastructure-led growth save the economy?

Forget "stimulus." The U.S. needs more public investment paid for by more borrowing and higher taxes
by Michael Lind

"...The debate about American economic policy can best be understood with the help of a remark by the fictional detective Sherlock Holmes: 'When you have eliminated the impossible, whatever remains, however improbable, must be the truth.' When you have eliminated impossible policy options, whatever options remain, however difficult, must be pursued..."

"...To avoid competing with private enterprise, the government should produce public goods that increase overall productivity and that the private sector has no incentive to provide, in good times or bad, such as infrastructure and social services like policing, health care, education and care for the young and old. In addition to mobilizing idle resources and labor directly, both infrastructure and public service spending could help business in general by boosting the purchasing power of Americans who are now unemployed..."

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