Comments on: Why federal construction spending doesn’t translate to GDP growth

By: AustinG

AustinG — Tue, 13 Sep 2011 20:42:47 +0000

In response to a couple of posters. Counting deficit spending by the government in GDP is misleading. It would be like counting a loan as income. While both allow you to spend more today they have to be paid back which reduces future earnings. In addition the point of the article here is to make it clear that spending by the federal government is often times inefficient. We aren’t better off by having a $10 million dollar bridge cost $100 million. Though to count government spending in GDP would be to make that claim.

I find blaming Republicans for the stimulus bill a bit absurd. Democrats had unprecendented majorities in both Houses of Congress, including a fillibuster proof 60 in the Senate. Blaming Republicans for legislation in such a circumstance means that you will always blame them no matter what.

By: auger

auger — Thu, 08 Sep 2011 21:16:46 +0000

I don’t frequently side with Mr Easterbrook without internal protest, but find myself gravitating toward His opinion in this case. I do think construction will get quite a boost from the year’s weather disasters, fueled by public, as well as private dollars. It’s a horrible way to help rebuild our economy, but at least a beaten down segment will get a chance to begin earning again

By: BajaArizona

BajaArizona — Thu, 08 Sep 2011 19:17:55 +0000

Only 3 Republican Senators voted for the stimulus bill, back when the economy was in a free-fall. And those 3 were barely brought in. Without them, there would have been no stimulus at all.

Calling it Obama’s stimulus is both dishonest and stupid. Yes it was flawed. It was flawed, the healthcare legislation was flawed, the financial regulations overhaul was flawed, the debt crisis was flawed NOT because Obama wanted them to be flawed but because he was forced to deal with a nihilistic united opposition party the likes of which have not been seen in the Union since the 1850s. Obama got the best deals he possibly could. He never once has gotten what he wanted.

Look at the electoral map. It’s the North vs. the South, the Coasts vs. the Heartland. The United States is teetering on the edge of another Civil War. A much messier one without clean borders. The apocalyptic ignorant hyperventilating fundamentalist idiots are going to destroy us from within.

No, that’s wrong. They already have destroyed us. We are just watching the mountains crumble in slow motion.

By: MV53

MV53 — Thu, 08 Sep 2011 16:40:49 +0000

Just listing a bunch of projects that ended up costing more money than they projected doesn’t prove anything. I agree that many of the federal rules and regulations end up making projects cost more and take longer, but that can be fixed. People and foreign governments are literally paying the US government to borrow money (10 year treasury yield is down to record lows),we have millions of unemployed and we a trillion dollars worth of repairs and upgrades, there really isn’t a legitimate reason not to be doing infrastructure work. The Obama team really failed when most of the stimulus money was used for poorly designed tax credits and not construction spending.

Furthermore, and infrastructure bank should, in theory, provide much more coordination between federal, state and private dollars which will lead to more private funding for infrastructure which is a good thing.

By: Sprizouse

Sprizouse — Thu, 08 Sep 2011 16:40:28 +0000

Um… GDP = C + I + G + NX

This is an accounting equation which means, by definition, it must balance. I’m at a loss as to how, or why, you think federal government spending (even if it’s wasteful) should be removed from that equation and not contribute to GDP. That formula is what one learns within the first ten pages of any Macro 101 book. You, as a ‘visiting Brookings scholar’ and ‘public intellectual’ ought to be able to grasp that.