Progressive Infrastructure Investment Creates Six Times As Many Jobs As Conservative Proposals
Progressive Infrastructure Investment Creates Six Times As Many Jobs As Conservative Proposals
Last week, the Heritage Foundation released its proposed economic stimulus plan. It contained two parts: extend the Bush tax cuts as far into the future as possible and cut taxes across the board for individuals, businesses and corporations through 2013.
These measures — like those proposed by other conservative organizations like the Club for Growth — are woefully ineffective at offering immediate and substantial stimulus when compared with other, progressive alternatives. A new analysis by the Center for American Progress Action Fund finds that the Heritage Foundation’s conservative proposals have far less job creating potential than progressive proposals of the same magnitude.
As Matt Yglesias wrote of the Heritage proposal, “this plan would deliver nothing to those in the greatest need and would stimulate demand in the least-efficient way possible. All in pursuit of the right-wing’s never-ending goal of further enriching the richest.”
Every $10 billion in taxpayer money that goes towards extending the Bush tax cuts would create or save just 10,000 jobs versus nearly 60,000 jobs which could be created or saved by extending unemployment benefits and food stamps (stimulating demand for goods and services) or investing directly in energy, transportation and education infrastructure.
As has been extensively documented, the most effective way to close the GDP gap and lay a foundation for long run growth is by getting money into the hands of people who are most likely to spend it (struggling families), helping to shore up state budgets to prevent service cuts and property tax hikes, and through direct investment by the federal government. What we don’t need is simply more tax cuts for corporations and the wealthy.
Methodology notes after the jump.
Job estimates are based on data from the Bureau of Labor Statistics, GDP multipliers from Moody’s Economy.com, 2009 GDP estimates from the CBO, and a conservative application of Okun’s law, which projects a 1 percent decrease in unemployment for each 3 percent increase in GDP.
3 Responses to “Progressive Infrastructure Investment Creates Six Times As Many Jobs As Conservative Proposals”
Register
RSSLogin
Topic Cloud
ArchivesBlog RollAbout Wonk RoomContact Us
Donate
Infrastructure development is neither progressive nor conservative. How it’s implemented could be different, but it’s not. Bush believed in contracting out most government functions. Recall Rove’s “the government cuts checks” remark?
Barack Obama’s infrastructure makes little change in this practice. He said 90% of jobs will be created in the private sector. Rep. Ray LaHoodn will keep the Transportation privatization train chugging.
Private equity firms sit with billions on the sidelines targeted for infrastructure projects. Distressed state and local governments could sell existing or future revenue streams at distressed prices. Watch closely.
January 13th, 2009 at 12:01 pmJapan may cut their capital gains tax to zero. Rep. Charlie Rangel told Chris Matthews yesterday there likely will be business and capital gains tax cuts.
January 13th, 2009 at 12:02 pmThank you stateofthedivision. In addition to state & local gov’ts possibly selling off our tax-built transportation infrastructure (especially highways on which private investors can impose tolls), we taxpayers should avoid spending Stimulus $ on NEW highways and bridges to Nowhere, or even on highway projects that expand capacity and thereby merely encourage citizens to move farther away from where they work. The new Stimulus $ should be used on transportation infrastructure that encourages a sustainable economy and community, including more Amtrak service, more transit service, and the ability to meet our daily needs by at least occasionally walking or biking.
January 25th, 2009 at 11:11 pm