Barack Obama’s massive infrastructure spending plan to jump-start the economy isn’t being criticized just by conservative critics. His chief economic adviser once called the idea one of the “less effective options” the president-elect is now promoting.
In a strategy paper in January that studied various economic stimulus proposals, economist Jason Furman wrote that spending hundreds of billions of dollars to repair or rebuild the nation’s roads, bridges, rail lines and other infrastructure was “likely to be less effective in spurring economic activity.”
The reason: Big infrastructure spending bills “do not provide well-timed stimulus or because there is considerable economic and administrative uncertainty about how they might work,” Mr. Furman said.
While such public works spending “might provide an important boost to long-term growth,” he doubted it “would generate significant short-term stimulus” because all too often the money is not pumped into the nation’s economic bloodstream “until after the economy had recovered.”
By Donald Lambro
The Washington Times
One expects Mr. Obama’s fiscally conservative economic critics to beat up his big-spending, New Deal-era idea, but when his top economic adviser puts his plan’s core in the “less effective options” column, that’s news.
But even other supporters of his giant stimulus have begun voicing doubts about whether a huge spending package, possibly in the $500 billion to $700 billion range, can be spent quickly enough to have an impact on the recession. And some of them fear the spending may result in more wasteful pork-barrel spending.
The Obama plan will likely include, among other things, tax rebates for low- to middle-income workers, unemployment compensation and increased food stamps, Medicaid funding and other social safety net assistance. But infrastructure spending, pushed by the nation’s governors, has become the plan’s chief focus.