Timothy Taylor has a great blog. He writes on a variety of topics in economics.
On Friday's Around the Traps he wrote about Infrastructure.
It is , as usual, a very interesting read.
He concluding thoughts are:
1) You need to have a detailed plan of projects that really are shovel-ready, like the federal highways in the 1950s. Otherwise, it's just too slow to get such project underway when a recession hits. Perhaps the ideal approach is to have a long-term project happening on an ongoing basis, with the possibility for speeding it up if a recession hits.
2) Government is often focused on the infrastructure that it owns directly: like roads, bridges, and sewer lines. These areas matter, of course. But the future of the US economy will rely on a lot of other kinds of infrastructure, many of which are either privately owned or are some form of public-private partnership: including phone and cable lines, electricity generation and transmission, pipelines for oil and gas, railroad tracks, airport and seaport capacity, and water reservoirs and pipes. A broader focus on infrastructure would think about ongoing efforts to build infrastructure in these areas, and how some form of government support might accelerate them during a recession, too.
3) Pretty much everyone favors infrastructure in theory, but in practice, there are often some hard issues to work out. How does one focus on infrastructure that has the largest payoff, rather than just spreading out the spending to favored state and congressional districts, or contracts to favored political interests? How does one make sure the best deals get negotiated for the use of taxpayer support? Many kinds of infrastructure involve a mixture of user payments and taxpayer money, and how should those user payments be structured? Finally, how do we balance the need to give opponents of infrastructure projects a fair hearing, but also not give opponents an unfettered ability to use "lawfare" to block infrastructure projects?
I remember when I criticised the initial stimulus here because we should have been spending on a dual carriage way from Melbourne to Brisbane.
I learnt two things.
Sinclair Davidson had no idea of how important trucks were in transportation in Australia.
There were NO shovel ready projects to go. Indeed I learnt only Sweden had shovel ready projects to go in all OECD nations.
I am hoping Nations have learnt their lesson now. given howl ow bond yields are and how little infrastructure projects are underway It appears not.