Single Largest Public Works Project !!

When the economy is in recession, policy-makers tend to design different plan as a remedy. One of those is to increase government expenditure, then the GDP (GDP=C+I+G+Ex-Im) would not decline or even increase. It is recommended to do so, but the even more critical points, HOW? How to do it? Is it the best move?, are always the most difficult questions to answer.

Adams

CHICAGO: President-elect Barack Obama has promised the largest public works construction program since President Dwight D. Eisenhower created the federal interstate system half-century ago. The program is to lift the United States out of economic recession, and to resuscitate the reeling global economy.

The Bureau of Labor Statistics (Dec. 5) reported U.S. loses 533,000 in November, the biggest drop since 1974. As days pass by, the unemployment is on the rise and there is no end to the recession in sight.

Obama began highlighting on Saturday elements of the economic recovery program he is trying to fashion with congressional leaders in hopes of being able to enact it shortly after coming to office on January 20, 2009.

“This painful crisis is an opportunity to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, and by investing in clean energy projects.” Barack Obama said in a statement right after the latest grim economic report indicating job losses in the U.S. in November.

Obama`s remarks sought to improve the definition of traditional work programs for the middle class, like infrastructure projects to repair road and bridges, at the same time also pushing a federal effort to bring in new-era jobs in technology and so called green-technology related jobs.

Although Obama offered no price estimate for his grand plan, he said the massive government spending program he proposed will invest record amounts of money in the vast infrastructure project, which also includes work on schools, sewer systems, mass transit, electric grids, dams and other public utilities.

Simultaneously, he vowed to upgrade computers in schools, expand high-speed Internet to remote areas, make government buildings more energy-efficient and modernize health care institutions by improving information technology at hospital and doctors` offices.

“We need action – and action now,” Obama said in an address taped for broadcast on radio and You Tube. Millions of jobs would be created by making the single largest investment in national infrastructure since the creation of the federal highway system in the 1950s, he said. He added that state officials would lose the federal dollars if they did not use the money to repair highways and bridges quickly.

Obama and his team are working with congressional leaders to devise a spending package that some lawmakers have proposed could total $400 billion to $700 billion. Some analysts projected even higher costs to achieve the massive plan. The efforts to adopt a broad economic package are likely to wait until he swears in (takes office) and Democrats have bigger majorities in Congress.

“We won`t just throw money at the problems, we`ll measure progress by the reforms we make and the results we achieve – by the jobs we create, by the energy we save, by whether America is more competitive in the world.” Barack Obama addressed the public.

Last week, when he met with the nation`s governors, they said the states had $136 billion worth of road, bridge and other projects ready to proceed as soon as money became available. They estimated that each $1 billion dollars spent would create 40,000 jobs, if the plans are implemented smoothly.

“He hasn`t given us any commitment, but we are fairly certain it`s going to be large,” Edward Rendell of Pennsylvania, chairman of the National Governors Association, said in an interview on Saturday. “I think he understands if you`re trying to reverse the economy and turn it around.... This is not the time to do it in small doses. It`s got to be big.” Edward added.

In a joint statement, New York Mayor Michael Bloomberg, Pennsylvania Gov. Ed Rendell and California Gov. Arnold Schwarzenegger said it would help the U.S. stay ahead of other countries. “To stay competitive globally, the time to repair and modernize our nation`s infrastructure is now,” they said.

The delay to implement the project poses the possibility of a deeper recession, some experts recommended a quick action to make the plan happens.

(Sources: AP, Obama banking on large-scale public works project, Dec. 7, The Japan Times, Obama offers huge public works plan, and International Herald Tribune, Obama recovery plan: Massive public projects, Dec. 8, 2008.)