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December 03, 2008 – Comments (11)

Obama's plan to rebuild infrastructure will fail to alleviate the recession unless projects are chosen carefully and implemented rapidly, states warn...

Yes, if there's one thing we've learned throughout these bailout attempts, it's that haste and care go hand in hand...

Obama stressed the importance of identifying projects that could put people to work quickly, participants said. He raised the specter of Japan, which languished in a decade-long recession in part because massive spending on construction projects in the late 1990s flowed too slowly to boost economic activity.

Actually, a lot of the problem with Japan is that the money flowed to projects with no real value. They were worthless, nifty-looking make-work.

Luckily (!) we are in need of a ton of infrastructure spending in the U.S., money that would go toward needed improvements. But whether or not this can actually help the economy over the next year or so is debatable, with the edge going toward: no. Long run, we need it, but can states spend the money wisely? Everyone talks about the bridge to nowhere, but how much was spend on cul-du-sacs and sewer-pipe to nowhere over the past few years?

11 Comments – Post Your Own

#1) On December 03, 2008 at 9:28 AM, carcassgrinder (36.15) wrote:

Good time to have a public project on the bidding block.  I have a feeling that if you want to build a 500' tall flight tower modeled after the image of Peyton Manning.....the money will be there.  This is going to get fun.

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#2) On December 03, 2008 at 10:53 AM, Option1307 (29.73) wrote:

Oh come on THFBent, you know you want one of those "glorious" government jobs. They are so productive and not the least bit wasteful at all...

We are going to be spending on anything and everything, hold onto your hat. carcassgrinder has it right, this is going to get fun!

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#3) On December 03, 2008 at 11:06 AM, jegr5347 (< 20) wrote:

You see!!!! and people were complaining about that Alaska bridge. Maybe if they would have built the darn thing, we would not be in this recession. Who cares if an old fart senator got greased along the way.

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#4) On December 03, 2008 at 11:25 AM, GNUBEE (24.46) wrote:

Construction Sector Anticipating Obama Boom
The markets are trying to figure out what the latest stimulus plan will mean to companies but there is already one sector that is expecting to see some real progress, and soon. Whatever else comes out of this package, it is obvious that infrastructure and construction will be part of it. It has been estimated that there are over 3,000 projects that have been delayed due to funding and could be launched with essentially a moment’s notice. This amounts to some $20 billion in project work that could be started immediately and that could go a long way towards recovering some of the 62,000 jobs that have been lost in the construction industry in the last 18 months. The challenge to this plan so far has been that these projects are far from universally distributed and there will be political demands to spread the stimulus more broadly. This will happen over time but initially the money will flow to those areas that are best positioned to move swiftly.

On the professional side, the boon will be focused on the engineering firms and others that will be planning the next wave of projects. It is one thing to add back some 62,000 jobs but that is a long way from 2.5 million. To make a dent in that number means some massive efforts on the construction side.

Analysis: At this stage there are only rumors but the scale of the task means that some very big ideas will be needed. Two that have started to develop include a series of major new highways that will mark the most significant addition to the Interstate system in decades and a series of proposals to reinvigorate passenger rail with the development of high speed trains along the lines of what exist in Europe and Japan. Both of these efforts would be monumental and would play a role in economic development for years to come.

The interest in the high speed train idea is growing as both a means to stimulate the economy and as a way to react to the other message in the Obama plan—be green. The ideas have ranged from building a new system on the east coast to developing a transcontinental version. It is expected that initial efforts would track along the areas of densest population but at some point a connection system might be devised. It would also not surprise many if Chicago became a hub of some of that activity—especially given the need to address job issues.

Source: Armada Corporate Intelligence

See KBR, and JBC....why can't I add tickers???

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#5) On December 03, 2008 at 12:25 PM, TMFBent (99.81) wrote:

a series of proposals to reinvigorate passenger rail with the development of high speed trains along the lines of what exist in Europe and Japan

Rail as a long-haul passenger carrier has zero chance in the U.S. The distances are too great to make it convenient or timely for travelers, and even if you could get a train to travel 500 mph like an airplane, Americans are inherently independent about driving to where they want to be.

Europe and Japan have advantages of being much, much smaller, and having an ingrained culture of mass transportation. Americans only use mass transit in the areas of the highest population density (DC, NYC, etc.) and only grudgingly then. And these systems are generally money-suckers.

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#6) On December 03, 2008 at 12:42 PM, GNUBEE (24.46) wrote:

I think east coast (acela is not a money sucker...quite the opposite) corridor systems are what we will see. Not the transcontinental, so I agree in part with your statement.

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#7) On December 03, 2008 at 12:52 PM, johnw106 (57.04) wrote:

High speed rail would work if we do not look at it as a macro economic venture. It needs to be micro. As in state by state. After the states build their intrastate systems we could link them together with a interstate rail system.

And where rail has failed is the failure to follow through with the extensions. When you step off a high speed rail, you have no way to move except to walk. The bus routes and/or subways/monorails for inter city commuting do not exist or are very poorly planned. This is a major issue in Florida with the high speed rail we have been trying to get built.
A T-shaped rail corridor from Miami to Jacksonville and across to Tampa via Orlando. People would use it to commute if there was a viable transportation system in place for when they step off the trains.
High speed rail needs to be a package deal that builds all of these elements of the system at once.High speed train-bus-subway-intercity monorail.

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#8) On December 03, 2008 at 12:57 PM, Slipswitch (< 20) wrote:

TMFBent, you make some good points, but rail does have great potential in the US.  Rail has potential as a medium long haul carrier.  Amtrak's Northeast Corridor between Boston and Washington is very successful and more comfortable and easier than airlines.  There is little point in trying to capture the market for 1000 or 2000 mile trips, but rail could handle much of the 200- 500 mile travel that is done if it was funded the way air travel is.  Rail is also more fuel efficient and environmentally friendly.  (Ask about emission standards for jets - no catalytic converters there.)

 High speed rail of the type used in europe and Japan is not necessary in the immediate term.  Rail lines and equipment can be upgraded to provide speeds of 100-150 mph which makes it competitive with jets for medium haul.

 The idea that rail systems are money suckers may be true for some politically motivated routes, but compared to air travel, rail is no less efficient than the huge subsidies airports and some routes recieve. Amtrak currently recieves less than $2 B, whereas the  FAA subsidy is about 10x that. 

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#9) On December 04, 2008 at 1:15 AM, Mary953 (77.06) wrote:

Is anybody else here old enough to remember LBJ pumping funds into the Appalachian mountain poverty zone?  1960's and no electricity or plumbing.  This last Congress stretched that zone just a biiiiiit further. It now includes some of Ohio, the bluegrass thoroughbred farms of middle Kentucky, a lot of both Carolina's.  Nobody slings pork like our politicians. 

Can someone point me toward the receivin' end instead of the givin' end this time though?  I'm too old to need this much fun again.

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#10) On December 04, 2008 at 1:16 AM, Mary953 (77.06) wrote:

Is anybody else here old enough to remember LBJ pumping funds into the Appalachian mountain poverty zone?  1960's and no electricity or plumbing.  This last Congress stretched that zone just a biiiiiit further. It now includes some of Ohio, the bluegrass thoroughbred farms of middle Kentucky, a lot of both Carolina's.  Nobody slings pork like our politicians. 

Can someone point me toward the receivin' end instead of the givin' end this time though?  I'm too old to need this much fun again.

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#11) On December 05, 2008 at 2:51 PM, Mary953 (77.06) wrote:

I seem to be repeating myself.

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