OK, I know it's a bit of bad form to R1 a conversation that I was a part of. But as I haven't been reading a lot of reddit recently, and the other R1 ideas I have are pretty involved, and I never find the time for them, and I was encouraged in my malfeasance here:
I'd r1 you, but you wouldn't understand. You should do it anyway lmao.
So here goes:
So much confidence so little knowledge. Infrastructure spending does nothing for growth or productivity. Japan has amply proven that as has Greece.
http://www.heritage.org/research/reports/2008/12/learning-from-japan-infrastructure-spending-wont-boost-the-economy
R1-1: Does infrastructure do anything for productivity? Praxing it out, how could it not? How could trying to drive a truckload of cargo from New York to California not be more productive on the interstate highway system than it would be on local dirt roads? You can cover that distance in 4-5 days by modern highway. It's actually called the Dwight D. Eisenhower National System of Interstate and Defense Highways. And not just because old Ike was president when the idea was pushed through. But rather why it was pushed through when Ike was president. And that is because in 1919 Ike drove across country, and it took 62 days. Bit of a change in the driver's productivity, wasn't it?
Let's look at the science of that a bit more. This 2010 research brief from the World Bank
Economists have viewed infrastructure as a key ingredient for productivity and growth since at least Adam Smith. Conceptually, infrastructure may affect aggregate output in two main ways: first, directly because infrastructure services enter production as an additional input, and second, because they raise total factor productivity by reducing transaction and other costs thus allowing a more efficient use of conventional productive inputs.1
...
For the most part, this literature focuses on quantifying the impact of infrastructure on aggregate performance, and is silent about the specific channels through which the impact occurs.3 Its findings are far from unanimous, but a majority of studies reports a significant positive effect of infrastructure on output, productivity, or their growth rate. This is mostly the case with studies using physical measures of infrastructure stocks; in contrast, results are less conclusive among studies using pecuniary measures such as public investment flows or their accumulation into public capital. There is a good reason for this, namely the lack of a close correspondence between public capital expenditure and the accumulation of public infrastructure assets or the provision of infrastructure services, owing to inefficiencies in public procurement and outright corruption – issues that are likely more important in developing economies than in more advanced ones (Pritchett 2000).4
Empirical estimates of the magnitude of infrastructure’s contribution display considerable variation across studies.5 Overall, however, the recent literature tends to find smaller (and more plausible) effects than those reported in the earlier studies (Romp and de Haan 2007), likely as a result -- at least in part – of improved methodological approaches.6 Thus, in a production-function setting, the mid-point estimate from recent studies of the elasticity of GDP with respect to infrastructure capital lies around 0.15 for developed countries (Bom and Ligthart 2009).7 This means that a doubling of infrastructure capital raises GDP by roughly 10 percent. Estimates from recent studies using broader country samples are not very different.8 However, this captures only the direct effect of infrastructure on output, given the use of other productive inputs; there may be additional indirect effects accruing through changes in the usage of the other inputs due to complementarities with infrastructure.
...
Moreover, a number of empirical studies using various approaches also find that the output contribution of infrastructure exceeds that of conventional capital, which suggests the presence of externalities associated with infrastructure services, in line with theoretical presumptions.10
...
So let's contrast this with the Heritage study linked above.
As The Heritage Foundation has noted in earlier reports, past infrastructure spending--especially related to transportation--has little to show in terms of countercyclical stimulus or job creation.[4] Much of this lackluster impact stems from the long lag time involved in getting such spending programs up and running, as well as the propensity of the state and local governments to substitute federal money for already-committed state and local money in order to shift such funds to other purposes.[5]
This part has some valid points concerning infrastructure spending as stimulus spending, which can be difficult to do because of time lags in implementation. But that's not the argument that was put forward. The argument as stated was that
Infrastructure spending does nothing for growth or productivity.
A fundamentally different argument. The Heritage study concludes with:
It is important to recognize that our infrastructure and the continued investment in it are important underpinnings of future economic growth and sustained prosperity. But it is equally important to recognize that the long-term nature of these benefits to cost-effective mobility and quality services, and the need to choose carefully among competing options and technologies, suggests that a stimulus scheme based on spending is ill-suited to the short-term stimulus needs that are of concern to policymakers. Given current congressional practices, any stimulus package approved by Congress is certain to contain a host of projects that have nothing to do with prosperity and everything to do with political influence and current fashion.
So even the Heritage study doesn't say what the person linking it claims that it said. The author of the piece is skeptical of infrastructure as stimulus. And makes an argument to that point. But does say that infrastructure is necessary to growth.
Another report, from the Economic Policy Institute puts it this way:
Besides their direct impacts on the labor market, an increase in infrastructure investments has been shown by a large and growing research literature to yield large economic returns and carry the potential to boost productivity growth. Given the sharp deceleration in U.S. productivity growth since the beginning of the Great Recession, this effect alone could justify additional infrastructure investments over the next decade.
R1-2: Thesis: The purpose of infrastructure is to create economic activity, or to lower the cost of activities. We've covered increased productivity. How about lowering costs? [As this report from Hofstra says:(https://people.hofstra.edu/geotrans/eng/ch7en/conc7en/ch7c1en.html)
At the aggregate level, efficient transportation reduces costs in many economic sectors, while inefficient transportation increases these costs. In addition, the impacts of transportation are not always intended and can have unforeseen or unintended consequences. For instance, congestion is often an unintended consequence in the provision of free or low cost transport infrastructure to the users. However, congestion is also the indication of a growing economy where capacity and infrastructure have difficulties keeping up with the rising mobility demands. Transport carries an important social and environmental load, which cannot be neglected. Assessing the economic importance of transportation requires a categorization of the types of impacts it conveys. These involve core (the physical characteristics of transportation), operational and geographical dimensions:
Emphasis in the original.
So transportation infrastructure reduces costs. What of other infrastructure? Much of the infrastructure in the US is in a decayed or obsolescent condition. Does that deteriorated infrastructure impose costs that could be reduced?
Imagine Manhattan under almost 300 feet of water. Not water from a hurricane or a tsunami, but purified drinking water — 2.1 trillion gallons of it.
That's the amount of water that researchers estimate is lost each year in this country because of aging and leaky pipes, broken water mains and faulty meters.
Fixing that infrastructure won't be cheap, which is something every water consumer is likely to discover.
http://www.npr.org/2014/10/29/359875321/as-infrastructure-crumbles-trillions-of-gallons-of-water-lost
The shoddy state of the nation's roads cost the average driver $515 in extra operation and maintenance costs on their car, according to the latest analysis from TRIP, a national transportation research group. Meanwhile, the Highway Trust Fund is about to become insolvent, and congressional lawmakers can't agree on a temporary fix that experts say is nothing more than a band-aid, and an inadequate one at that.
The numbers from TRIP show that 28 percent of the nation's major roadways -- interstates, freeways, and major arterial roadways in urban areas -- are in "poor" condition. This means they have so many major ruts, cracks and potholes that they can't simply be resurfaced -- they need to be completely rebuilt.
Those cracks and potholes put a lot of extra wear and tear on your car. They wear your tires away faster, and they decrease your gas mileage too. All of these factors go into that calculation of $515 in extra annual cost, above and beyond what you'd pay to maintain your car if the roads were in good conditions.
https://www.washingtonpost.com/news/wonk/wp/2015/06/25/why-driving-on-americas-roads-can-be-more-expensive-than-you-think/
Here's an infographic from the US Chamber of Commerce on the subject.
And the electrical system needs a lot of work as well.
The point being that there are a lot of opportunities to lower long run costs, not just by improving infrastructure, or increasing it, but even just in getting it repaired to fully functional modern standards.
ここには何もないようです