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Infrastructure- Key to Economic Success


Written by Luca

While updates on the terrible state of the American economy roll in daily, President-Elect Obama is forging a plan to pull the United States economy out of danger.  The current economic downturn has successfully touched the lives of everyday Americans, as they struggle to keep their jobs, and get to the end of the month with their meager pay checks.  The incoming president will have to deal with the economy from the first day in office, as improving the state of the economy will be his top priority.  To jumpstart the flailing economy, Obama proposes widespread investments in infrastructure projects across the United States.

The United States has not invested heavily in infrastructure since the 1950s, when President Eisenhower ordered the creation of the Interstate Highway System.  Building thousands of miles of roadway encouraged economic activity in the United States.  More importantly, however, was how the infrastructure improvements in the 1950s set the foundations for future economic growth.  Transportation standards were greatly enhanced as the newly created roadway allowed greater capacity of transported goods.  The infrastructure set in place by President Eisenhower in the 1950s allowed massive expansion in the 1960s, as Americans became full-fledged consumers, which led to tremendous economic growth.  Without the improvements in infrastructure in the 1950s, the United States would not have experienced consistent solid growth in the latter half of the 20th century.

Today, America’s infrastructure is feeling the strain of decades of heavy use.  Maintenance costs for ageing roads and bridges have risen significantly, as more thorough repairs are required to keep the current roadways functioning at full capacity.  President-Elect Obama plans to simultaneously tackle two problems, economic turbulence and decadent infrastructure, by increasing public spending for investments in infrastructure.  In the 21st Century, building new roads is not sufficient to improve the economy.  The government will need to update the country’s electric grid, and more importantly, widespread access to high speed internet.  In a world which relies heavily on the internet for business, improving high speed internet access is a priority, because it assures business opportunities to small towns in rural America.   The increased spending in infrastructure will also help the economy by creating hundreds of thousands of new jobs.  New jobs are essential for an economy which is struggling to stay afloat.  The creation of new jobs leads to an increase in consumer spending, which is imperative for the survival of countless businesses.

Although increased spending in infrastructure promotes economic growth, which is the President-Elect’s primary worry, the greater expenditure will eventually lead to a massive public deficit.  Therefore Obama will have to carefully choose which projects to approve, and keep the deficit in consideration when approving future projects.  The costs of the proposed improvements hover around half a trillion dollars.  Therefore, proposed projects must be reviews carefully approving them, because infrastructure projects lend themselves very well to the practice of pork barrel spending, which most of congress still silently approves.  Congress, and the future president, should not allow projects such as the construction of a raceway, listed as a project under the $700 billion financial bailout package.  Congress should approve projects that have a national relevance, above projects whose tangible benefits are only felt in single communities or cities.  Projects that pass inspection and are approved by Congress should have strict guidelines attached to them, in order that projects are not carried on for decades, wasting federal money.

Independently from the success or failure of the infrastructure projects undertaken in the near future, the United States will have to deal with the massive public deficit it has amassed since 2001.  The growing public deficit poses a significant security concern, because other countries control our money supply.  China controls most of our debt, as it has bought countless numbers of treasury bills over the years.  If the United States does not purge itself from the money of other countries, it will suffer the consequences in the long run, because a country can not maintain significant power without a secure money supply.  Once the economy exits the recession, the incoming president will have to either cut expenses or increase revenue or a combination of the two, to reduce the public deficit.  President-Elect Obama will most likely have to cut several programs and increase taxes to cut the public deficit, because it does not fall automatically.  Americans will have to make sacrifices in the next couple of years, as they will have to help their government improve its finances.  If Obama follows through with his promise to improve and expand existing infrastructure, the United States will have a stronger foundation to build an economy of the future, which will be more heavily based on internet businesses.  Although infrastructure improvement is advertised as a short-term fix, it will in fact prove essential to the continued dominance of the United States in the world economy.


Comments, Questions, Concerns?

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Commentary by John

The economic turmoil that we have now is not that easy to solve. One solution may pose a conflict to the current economic situation and if it is not well-planned, the “solution” may just lead to another problem… so Obama will really have a difficult job as a leader…of course people and businesses will need to sacrifice if they want to help ease the crisis that we have now.


Well said.


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I liked it. So much useful material. I read with great interest.


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