AnnotatedOpinions.com

On Tuesday, however, Obama announced a new, multibillion-dollar spending package . . . The plan includes a reported $50 billion for . . . infrastructure.   

We may need some new roads and bridges, but these are not short-term economic boosts. In any case, infrastructure accounted for less than 10 percent of a bill that was sold in large part as a “reinvestment” package that would pay dividends for decades. [AO: Creating jobs “now” is a short-term economic boost. One of the primary reasons the economic recovery has been tepid is that consumers are not spending. Consumers are not spending for a variety of reasons including unemployment. No reasonable consumer who looses his or her job will continue to make the purchases he or she made before the job loss. Therefore, helping unemployed Americans get jobs creates an immediate boost to the economic recovery. ]  

The new stimulus would spend nearly twice as much on infrastructure as the last stimulus included. . . But infrastructure is not the only dead end in this plan.  [AO: Infrastructure is not a dead
end. In fact, spending on infrastructure is one of the best ways to address our current economic problems. Unlike some of the other fixes, infrastructure projects require borrowing money to create assets that will be available for the benefit of future Americans who themselves help pay for the assets.  

Large-scale infrastructure projects like the interstate highway system and large dam projects helped make America great. It creates conditions for connecting the country, reducing cost of trade and so many other benefits. At a time when our infrastructure is crumbling, recession or not, we need to spend the funds necessary to rebuild our infrastructure that has been allowed to crumble for the last 50 to 80 years.   

The American Society of Civil Engineers gives America’s infrastructure a D and recommends a $2.2 trillion dollar five year plan to improve our infrastructure. Based on these numbers, the  amount of infrastructure funding the administration is considering is a drop in the bucket. But it will be money well spent.]  

A couple of Obama’s measures might spur small businesses to invest. These include an extension of these firms’ ability to expense immediately some investments, as well as a one-year elimination of the capital gains tax for investments in small companies (though committing to keeping the current top rate of 15 percent for all investments would have a larger positive economic impact).  

There’s also a tax credit for small businesses that hire workers next year. But it’s not as promising as it sounds. . . [AO: Like his view on what constitutes short-term investment, the author has an unreasonably narrow view of what benefits small businesses. The jobs creation measures and infrastructure improvements contemplated by the administration will also be a great help to small businesses. These initiatives will enable small businesses to hire more people or put their existing workers to work. It will create projects that small businesses can work on.]