Transportation Investments in Response to Economic Downturns.

摘要

After the U.S. economy entered a severe recession in 2007, the federal government forcefully intervened to reduce the costs of the recession and speed recovery. Congress enacted spending programs and tax relief, and the Federal Reserve acted to sustain financial markets and reduce interest rates. Among these measures, the American Recovery and Reinvestment Act of 2009 (ARRA) provided $831 billion in new spending and tax relief. ARRA appropriated $48.1 billion to be administered by the U.S. Department of Transportation (USDOT), mainly for grants to state and local governments for capital expenditures for roads, transit, airports, and passenger rail. The act also funded other state and local government infrastructure and supported public infrastructure projects through a bond subsidy program. The rationale for public infrastructure spending as stimulus (that is, to aid recovery from a recession) is (a) that it directly provides employment on construction projects and in supplier industries and (b) that during times of high unemployment, construction and supply industry workers spending their wages will induce further hiring. The stimulus benefit of infrastructure spending (i.e., the resulting increase in economywide employment) weakens as the economy moves toward full employment because the directly employed workers and equipment are largely diverted from other applications. Separately from stimulus effects, infrastructure investment, during a recession as during normal times, can produce benefits over many years in the form of improved public services and increased productivity. The experience of the ARRA transportation program provides an opportunity to learn how to structure a program of government purchases intended as fiscal stimulus.