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Not quite as straightforward. Infrastructure comes with maintenance costs. These costs can tie you down in the next decades. But even worse, you literally canno

Not quite as straightforward. Infrastructure comes with maintenance costs. These costs can tie you down in the next decades. But even worse, you literally cannot spend an arbitrary amount of money even for absolutely obvious ideas. Try to renovate or rebuild all schools in one state at once. Or create new bike lanes. You will soon see that there's only a limited amount of companies that actually can do what you want. The one thing that seems to work surprisingly well is direct subsidies for switching to a better but more expensive product (electrical cars, house insulation). Personally, I agree that the government should take negative interest rates as a sign to massively invest. But I struggle to find an investment that is both just and sustainable. There is, for instance a huge pension gap in Germany. It would be wise to borrow money now if we could invest it to mitigate that gap. But how would such an investment look like? Buying children?

danaris 5y ago
One thing worth noting in this is that, at least in the US, a lot of the "infrastructure spending" that has been talked about recently is, in fact, maintenance. We have roads, bridges, and buildings that were built decades ago, then the funds that should have gone for their maintenance spent on tax cuts instead, so they're limping along with stopgap solutions.
- MomoXenosaga 5y ago
  The US talks about infrastructure and then nothing happens because of political impasse on Capitol Hill. Biden is no Deng Xiaoping and the Democrats are no CCP.
  - jason0597 5y ago
    Maybe it's time for radical political reform to end these deadlocks? https://www.youtube.com/watch?v=0ySL82WbcvU https://www.youtube.com/watch?v=0ySL82WbcvU
Retric 5y ago
Renewables are one option for massive investments without massive long term costs. The important thing is to subsidize them upfront rather than subsidizing their income stream or you get high electricity prices. However, the idea of stimulus makes basic assumptions that the economy can sustain a higher level. That economic article of faith may inherently be flawed in many cases. Another option for developed countries is rather than trying to stimulate the economy instead focus on increasing efficiency. Japan’s workforce increased 1% in the last 22 years. Long term stagnation should be expected in countries like Japan with stagnant and aging populations. Even 1% growth assumes the economy will double every 70 years. Relative stagnation isn’t inherently bad as long as the economy is still doing all the things an economy should be doing.
iSnow 5y ago
Germany is one example where a long-term infrastructure investment strategy makes a lot of sense as the infrastructure is crumbling: https://www.dw.com/en/german-infrastructure-begging-for-overhaul/a-57250602 https://www.dw.com/en/german-infrastructure-begging-for-over.... Not all could be spent in a short time as you mention, but for economic recovery, long-term funding is probably better anyways. To close the pension gap, Germany could also buy ETFs on borrowed money, or borrow to create a national investment fund, but that would be much too eccentric for an extremely risk-averse country.
paganel 5y ago
> electrical cars, house insulation). Those are very regressive, you’re taking money away from the less well-off (through higher fuel taxes, for example) and giving it pretty much directly to the way better-off middle-classes who can afford those new EVs and those houses which to insulate. It’s pretty much a return to the 1770s-1780s France, when “la gabelle” was in full force.
- foepys 5y ago
  That's one of the main complaints I have about all those measures that are being taken currently to become green. Government officials are also talking about using tax money to rebuild all houses for the people affected by the recent floods that were without flood insurance. It's a huge middle finger to all those people who can't afford a house. There are so many tax exemptions that exclusively apply to the rather well-off that I'm surprised that these issues are not coming up regularly when talking about social issues. Examples include offices at home are only deductable if they have a door (applies to larger-than-necessary apartments or houses), you get money for driving to work rather than living nearby and walking (0.35€/km), a more expensive hybrid company car costs the employee a lot less than a privately owned ICE car, and many more.
  - choeger 5y ago
    Please stop spreading misinformation. Yes, the classical "Arbeitszimmer" must be a separate room and, by the letter of the law, must have no private function. No, that does not apply for 2020-style home office. And no, you don't "get" 0.35€/km. You can deduct that amount from your income taxes. And that's totally in line with everything else you can deduct because you do it to earn the money in the first place. Also, building a modest-sized house in Germany costs about 200k€ - this sum is affordable by the average German couple (average income is around 36k€ per year). Germany is not California and especially not the Silicon Valley. Just because you may have chosen to rent an extremely expensive, 130 year old apartment 5min from your workplace that does not mean it is the lifestyle for the majority in the country.
    - foepys 5y ago
cwkoss 5y ago
> you literally cannot spend an arbitrary amount of money even for absolutely obvious ideas. Is there a good way to measure what potential productive capacity of infrastructure investment is? I wonder what percentage of the limit we're at right now? Could the market efficiently react to a doubling or even 10x-ing of federal infrastructure investment?
- choeger 5y ago
  I think there is: Count the applications for the infrastructure projects that you actually do. I doubt most companies can do more than one at a time. So if you have five applicants you can maybe do 3 projects in parallel before the price raises absurdly.

danaris 5y ago

One thing worth noting in this is that, at least in the US, a lot of the "infrastructure spending" that has been talked about recently is, in fact, maintenance. We have roads, bridges, and buildings that were built decades ago, then the funds that should have gone for their maintenance spent on tax cuts instead, so they're limping along with stopgap solutions.

MomoXenosaga 5y ago
The US talks about infrastructure and then nothing happens because of political impasse on Capitol Hill. Biden is no Deng Xiaoping and the Democrats are no CCP.
- jason0597 5y ago
  Maybe it's time for radical political reform to end these deadlocks? https://www.youtube.com/watch?v=0ySL82WbcvU https://www.youtube.com/watch?v=0ySL82WbcvU

Retric 5y ago

Renewables are one option for massive investments without massive long term costs. The important thing is to subsidize them upfront rather than subsidizing their income stream or you get high electricity prices. However, the idea of stimulus makes basic assumptions that the economy can sustain a higher level. That economic article of faith may inherently be flawed in many cases. Another option for developed countries is rather than trying to stimulate the economy instead focus on increasing efficiency. Japan’s workforce increased 1% in the last 22 years. Long term stagnation should be expected in countries like Japan with stagnant and aging populations. Even 1% growth assumes the economy will double every 70 years. Relative stagnation isn’t inherently bad as long as the economy is still doing all the things an economy should be doing.

iSnow 5y ago

Germany is one example where a long-term infrastructure investment strategy makes a lot of sense as the infrastructure is crumbling: https://www.dw.com/en/german-infrastructure-begging-for-overhaul/a-57250602 https://www.dw.com/en/german-infrastructure-begging-for-over.... Not all could be spent in a short time as you mention, but for economic recovery, long-term funding is probably better anyways. To close the pension gap, Germany could also buy ETFs on borrowed money, or borrow to create a national investment fund, but that would be much too eccentric for an extremely risk-averse country.

paganel 5y ago

> electrical cars, house insulation). Those are very regressive, you’re taking money away from the less well-off (through higher fuel taxes, for example) and giving it pretty much directly to the way better-off middle-classes who can afford those new EVs and those houses which to insulate. It’s pretty much a return to the 1770s-1780s France, when “la gabelle” was in full force.

foepys 5y ago
That's one of the main complaints I have about all those measures that are being taken currently to become green. Government officials are also talking about using tax money to rebuild all houses for the people affected by the recent floods that were without flood insurance. It's a huge middle finger to all those people who can't afford a house. There are so many tax exemptions that exclusively apply to the rather well-off that I'm surprised that these issues are not coming up regularly when talking about social issues. Examples include offices at home are only deductable if they have a door (applies to larger-than-necessary apartments or houses), you get money for driving to work rather than living nearby and walking (0.35€/km), a more expensive hybrid company car costs the employee a lot less than a privately owned ICE car, and many more.
- choeger 5y ago
  Please stop spreading misinformation. Yes, the classical "Arbeitszimmer" must be a separate room and, by the letter of the law, must have no private function. No, that does not apply for 2020-style home office. And no, you don't "get" 0.35€/km. You can deduct that amount from your income taxes. And that's totally in line with everything else you can deduct because you do it to earn the money in the first place. Also, building a modest-sized house in Germany costs about 200k€ - this sum is affordable by the average German couple (average income is around 36k€ per year). Germany is not California and especially not the Silicon Valley. Just because you may have chosen to rent an extremely expensive, 130 year old apartment 5min from your workplace that does not mean it is the lifestyle for the majority in the country.
  - foepys 5y ago

cwkoss 5y ago

> you literally cannot spend an arbitrary amount of money even for absolutely obvious ideas. Is there a good way to measure what potential productive capacity of infrastructure investment is? I wonder what percentage of the limit we're at right now? Could the market efficiently react to a doubling or even 10x-ing of federal infrastructure investment?

choeger 5y ago
I think there is: Count the applications for the infrastructure projects that you actually do. I doubt most companies can do more than one at a time. So if you have five applicants you can maybe do 3 projects in parallel before the price raises absurdly.