Why not have an Agency with Projects ready to go for the next recession?

Garret Jones points out Robert Schiller has a colleague, Martin Schubeck, with a good idea.

Why not just have a federal agency who lines up a bunch of infrastructure projects around the U.S., but holds off on them until we have a recession?

This agency could focus on the areas which need more help than others. It’s not exactly a Job Guarantee…

Of course, Garrent Jones is a good water carrier for Koch College George Mason University, so he wants to suspend prevailing wage laws during the recession.

“the Shubik plan suspended Davis-Bacon prevailing wage laws for the duration of an economic emergency, and if it were mostly a way of saying “let’s do more of our government construction projects during recessions, not during boom-times,” it might even get bipartisan support. I said “might.”

But this isn’t exactly a JG, and it seems more flexible to me.

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5 Comments on "Why not have an Agency with Projects ready to go for the next recession?"

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beowulf
5 years 1 month ago

This.
“U.S. Reps. Dennis Kucinich (D-OH) and Steven C. LaTourette (R-OH) have introduced bipartisan legislation to improve critical infrastructure in Ohio and nationwide… The [2007] Kucinich-LaTourette bill would create the Federal Bank for Infrastructure Modernization (FBIM). The bank, as an extension of the Federal Financing bank under the Treasury Department, would establish zero-interest mortgage loans for states and local governments to use to fund specific projects. The loans would bear a small fee of one-quarter of one percent of the loan principle to cover the administrative costs of the FBIM. The bill would not require Congress to appropriate any funds and would effectively double the amount of financing that is available to states and localities for infrastructure investment.”
http://www.house.gov/list/press/oh14_latourette/bank.html

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Erik V
5 years 1 month ago

This question has been addressed in previous posts on this site and others in the MMT/R movement. The govt be the size (as measured by spending) we need/want it to be at all times. If we need more demand, cutting payroll taxes and or sending out checks is a much faster way to make it happen than infrastructure spending. By the time you get building permits, zoning approvals, environmental studies complete etc etc, the recession will be closer to the end than the beginning and millions will have suffered needlessly due to slow stimulus.

And as was said above, if something is worth doing in a recession, it’s worth doing in an expansion, otherwise its not worth doing at all.

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Robert Rice
5 years 1 month ago

Without any strong feelings one way or the other, I’d argue a potential problem with the idea is in incentivizing recessions. We need infrastructure rebuliding when we need it; it shouldn’t have to wait until a recession.

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Rich
5 years 1 month ago

I agree with beowulf. The obvious objection that will be made is that if an infrastructure project is truly worth doing, why wait for a recession to do it..???

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beowulf
5 years 1 month ago

The politics of Federal infrastructure spending is such a mess that its more or less impossible to target states with below-average economic growth or to time it in a countercyclical manner. The best we can do (and we should) is throw more money at infrastructure in good times and bad.

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