Infrastructure Spending Now

Mark Thoma wrote the other day that he thinks there’s too much talk of monetary policy lately and “there has been hardly any effort to make the case that Congress should take a large share of the blame for the shape that the economy is in, particularly the shape of employment markets.” I don’t really agree that the general dialogue is disproportionately focused on monetary issues. As Thoma notes in a later post even Ben Bernanke himself is running around the country giving speeches on fiscal policy, a subject that continues to be the focus of big conferences and so forth. The wonky blogosphere has kind of moved on to monetary issues because Congress seems hopeless, but the broader political conversation remains oddly blind to monetary issues.

Still, Thoma is right on the merits and we shouldn’t let congress off the hook for the soft bigotry of low expectations. Even if we had looser money, I still think there would be plenty of room for useful congressional action on the jobs front. In particular, I think the problems of the long-term unemployed and the concentrated problem of the building trades sector need specific legislative focus.

And to leave the long-term unemployed aside for a moment, the obvious thing to do with unemployment construction workers is to put them to work in the construction business. Compared to other developed countries, America already has a great deal of private housing. Hence unemployed. At the same time, compared to other developed countries our public infrastructure is pretty shabby. So with interest rates low and the private demand for construction workers also low, it’s an ideal moment for the government to borrow money and spend it on infrastructure. That doesn’t — and shouldn’t — mean an exclusive focus on sexy megaprojects like high-speed rail.

This country does not suffer from a shortage of potholes, cracked sidewalks, or other minor problems that tend to not get fixed in a timely manner because of lack of money. Given the slack demand in the economy and low interest rates, we should be leaping to execute any quick-fix project of this kind ASAP. There are also tons and tons of middling issues with municipal water supplies. And somewhere between these banal projects and grand megaprojects would be something like outfitting city buses with GPS so that bus stops can display realtime schedule information.