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Tuesday, November 08, 2011

Turning Our Backs on the Unemployed

Senators, Republicans and two Democrats in particular, have not received anywhere near enough criticism for this:

Last week’s Senate decision to kill a modest $60bn bill to upgrade America’s infrastructure before it came to debate may have exceeded even that august chamber’s recent record. The package, which included $10bn in seed money for a public infrastructure bank, was blocked by every Republican and two Democrats. They objected because it would have been funded by a 0.7 per cent surtax on earnings over $1m.
And that was that. At a time when US businesses prefer to hoard rather than invest their cash, and when long-term interest rates are so low the money is virtually free, the political system is unable to accomplish what ought to be a no-brainer. Until now, America has never faced an ideological divide on infrastructure: both parties accepted the need to upgrade roads, dams, bridges, energy and water systems.
Forget Abraham Lincoln and Dwight Eisenhower, the presidents most often cited as having unleashed growth-boosting infrastructure – transcontinental railroads and federal highways respectively. Forget even Bill Clinton’s cheerleading for the “information superhighway”, which helped pave the way for the spread of the internet...
We need go back only to 2005 when a Republican-controlled Capitol Hill pushed through the infamous $280bn Highways Act, which was the largest transport bill in US history. ...
The US spends just 2 per cent of its gross domestic product on infrastructure. The European Union spends twice that, and China more than four times. It is showing. ...

It's not just the crumbling infrastructure, though that that alone is enough to justify the spending -- especially at a time when interest and other costs are so low -- it's the way in which Congress has all but turned its back on the unemployed. We have an opportunity to provide employment and at the same time invest in projects that have clear net benefits. Yet politics stands in the way and millions of unemployed face a less hopeful future because of it. People who have done nothing wrong except get caught up in a recession -- people who, when they have jobs, show up every day and work hard in support of their families -- are stamped with permanent scars from long-term unemployment. They wonder when, if ever, they will find a job again (and if they do find one what type of job it will be). Yet we do nothing to help them even though meeting our great infrastructure needs could help with the unemployment crisis. Grrr.

    Posted by on Tuesday, November 8, 2011 at 09:18 AM in Economics, Fiscal Policy, Unemployment | Permalink  Comments (29)

          


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