Jewish World Review August 26, 2003 / 28 Menachem-Av, 5763

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Consumer Reports

Building the road to recovery | The blackout that paralyzed much of the Northeast and parts of the Midwest brought to light the sad state of America's electrical infrastructure. As the debate rages about power deregulation and re-regulation, the rest of our country's deteriorating infrastructure has been all but ignored.

In addition to an antiquated electrical system, most of this country's basic foundation is in desperate need of repair. The American Society of Civil Engineers gives failing grades to the country's roads, water and aviation infrastructures.

We need to spend another $11 billion a year just to upgrade our drinking water systems and another $12 billion each year to improve our waste water systems, according to the ASCE. And while the federal government has appropriated almost $400 billion over the last 12 years for our highway and transit systems, much more needs to be done. The Bush administration has a $300 billion proposal in Congress for new highway and transit spending, but the American Highway Users Alliance calls the amount "entirely insufficient."

Republicans and Democrats alike should insist on vastly more funding on infrastructure. Not only on highways, transit, water systems and waste water, but also on our dams, railroads, airports and, of course, the national electric power grid.

One has to wonder, in the midst of this jobless recovery, why more policymakers aren't calling for more infrastructure investment. Part of the reason is that supply-side conservatives and libertarians cringe at the mere mention of government jobs creation, arguing that such programs merely shift jobs in the economy, creating in their minds a modern WPA project.

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They forget that many of our bridges and dams, which still stand today, are monuments to the intelligence and wisdom of that program. It was a different time, but no one can sensibly argue that that investment 70 years ago was anything but sound. The time is right for massive public investment in our infrastructure. As Casey Dinges, a managing director at the American Society of Civil Engineers, said, "One of the benefits of a billion dollars of new capital investment in infrastructure is 40,000 new jobs."

It is investment and not consumption that will drive economic recovery in the years ahead. James Medoff, a Harvard University economist who has done research on the subject of spending and job creation, told me, "There's no way in hell that consumption gets us out of this mess. If you really want to stimulate the economy, two-thirds of a percentage (increase) in GDP is going to come from investment."

Federal investment in our national infrastructure doesn't need to increase the already ballooning deficit. A system of user-based fees could offset the costs. Rep. Don Young, R-Alaska, chairman of the House Transportation and Infrastructure Committee, for instance, has proposed a gas tax increase to fund $375 billion in new highway and transit spending, $75 billion above what the administration is requesting.

A Zogby International poll found strong public support for investing in transit and highways. Eighty one percent polled felt that the nation's highway and transit network is very important to the economy. And user fees to fund such endeavors are effective.

"The gas tax works very well for transportation," Dinges says. "People drive, fill their gas tanks, they understand that their gas taxes are being used to support the road systems they rely on." Although creating mechanisms to offset the costs of updating our drinking water and waste systems may be more challenging, it is far from impossible.

The libertarians and supply-siders who consider Keynesian economics a curse word and infrastructure investment an outdated solution to previous generations' problems should remember that it was large-scale spending projects like Eisenhower's interstate highway system that laid the foundation for the United States today and our entire current economy. Even as we find ourselves in the new digital economy, there isn't an e-commerce purchase that doesn't eventually wind up on a highway, a runway or rail.

We simply cannot afford to ignore our crumbling economic foundation. This is the time to reinvest in America's infrastructure and to put people back to work. It's good economics, it's good politics and the investment will yield high returns for us and for future generations of Americans.

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Lou Dobbs is the anchor and managing editor of CNN's "Lou Dobbs Moneyline." Comment by clicking here.

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