Public Infrastructure Investment, Renewed Economic Growth, and the U.S. Fiscal Position

Abstract

We show that large-scale debt-financed public infrastructure spending, in addition to (a) generating growth and employment on a similarly large scale and (b) significantly reducing inefficiency-generated public and private costs economy-wide, will also (c) be substantially “self-financing” by dint of the revenue gains that it likewise will generate. Not to pursue such projects now, moreover, with (a) labor, material, and financing costs at historic lows, and (b) cost-acceleration set to kick-in in the very near future, will itself occasion large-scale implicit costs. Insofar as these investments are agreed by all to be necessary at some point, now is that point.