From Brad DeLong: The Economist on Infrastructure BankMore stimulus: Buffers for the flighty

More stimulus: Buffers for the flighty: ON BALANCE, I agree with the “it’s insane” analysis offered by Matthew Yglesias of America’s refusal to borrow money at historically cheap rates and spend it on infrastructure and other job-generating activities that will need to be undertaken eventually anyway…. [T]echnological change and globalisation have absolutely nothing to do with high unemployment in the construction sector. The people who build things in America will always be Americans, and there haven’t been any revolutions in construction technology between 2007 and 2011…. The reason the construction sector is sitting on the couch playing with the Wii instead of out fixing America is that America isn’t spending the money to do the fixing. America has a $2 trillion backlog of infrastructure maintenance, according to the Urban Land Institute. With the government able to borrow money at ridiculously low 10-year rates, it seems pretty convincing that we should be borrowing that money and spending it now, both to improve that infrastructure and to get the economy going. (Insert sub-argument: yes, but infrastructure programmes take a long time to get underway. Response: did you or didn’t you say this was structural unemployment that will take many years to resolve?)…

Again, only an economist (or The Economist) would think house construction and road construction are near substitutes, and the skills are easily transferred, but the general point remains, we should have an infrastructure bank to fund things that have benefits in excess of costs and can pay back the loans. See Fix It First, Expand It Second, Reward It Third: A New Strategy for America’s Highways