We need not a one-year but a 10-year commitment to rebuilding the country. President Obama’s jobs speech focused where it needed to—but it is only a start. America is underperforming. Millions are out of work, and tens of millions have depressed incomes. Obama was clear about what everyone, from storekeepers to economists, from corporate CEOs to unemployed workers, knows: until there is more demand for their products, firms will not hire more workers.
The president was right to focus on the most obvious idea for creating demand and putting people back to work at a moment like this: rebuilding America’s crumbling infrastructure. If a moment when the government can borrow for 10 years at less than 2 percent, when unemployment among construction workers is well into double digits, and when the price of building materials is depressed is not the moment for infrastructure investment, it is hard to imagine when that time will come. Moreover, much of the cost of infrastructure investment is illusory if those hired would otherwise be collecting unemployment insurance.
There will always be debate among experts about the returns to public investment in infrastructure. Some cite studies suggesting that road-maintenance projects delayed even two years can become six times as expensive later. They argue that the construction of highways, airports, and seaports has made a major contribution to American growth and claim outsize returns. Others are more skeptical, noting that the political process itself often makes for poor investment decisions. But it is hard to believe that a country with an air-traffic-control system still based on vacuum tubes, with tens of thousands of schools where paint is peeling off classroom walls, where bridges regularly collapse, and where traffic congestion costs more than $100 billion a year cannot find plenty of investments that have a return that dwarfs the 2 percent cost of borrowing.
The president’s proposals to create an infrastructure bank, to spend quickly on surface transportation, and to renovate schools are a very good start. But America must demand more. For years we will have an economy with plenty of slack, low borrowing costs, and high unemployment. The specter of a double dip will hover over us if government does not do its part in pushing the economy forward—not just this year, but for years to come. Now is the time not just to do shovel-ready projects, but to envision the backbone we want the American economy to have in 2020 and launch the multiyear plan we need to get there.