Comments on: The Daily Dig: Strangest Bridges Edition http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/ America Under Construction Tue, 16 Mar 2010 17:45:05 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Alon Levy http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9876 Alon Levy Fri, 06 Nov 2009 22:35:03 +0000 http://www.infrastructurist.com/?p=5576#comment-9876 Matt, US military spending is higher than it ever was before WW2, except during periods of total war like the Civil War or WW1. It was somewhat higher during the Cold War, but only somewhat - during the Vietnam War the US spent about 7% of GDP on the military, versus 5% now. The figures for today look a bit lower because the official numbers don't include Iraq and Afghanistan, which are authorized separately from the rest of the Pentagon's budget, which is only 3.5%. Even the last figure is close to a post-Cold War high: 9/11 gave the Pentagon an excuse to spend a lot more money, even on projects that have nothing to do with terrorism, like the F-35. Alex, the research I know of is that domestic spending of all kinds has a multiplier of about 1.5 - e.g. Mankiw refers to 1.5 for domestic spending as conventional wisdom in his posts promoting tax cuts - and military spending has a multiplier of 0.8, as shown by Robert Barro, who, like Mankiw, used the number to argue against government spending. Both numbers are meant to be true in recessions - Mankiw quotes New Keynesian consensus, whereas Barro looks at WW2. In times of growth deficits crowd out private investment, and I don't know of any research that looks at the growth potential of raising taxes to pay for government programs. Matt, US military spending is higher than it ever was before WW2, except during periods of total war like the Civil War or WW1. It was somewhat higher during the Cold War, but only somewhat - during the Vietnam War the US spent about 7% of GDP on the military, versus 5% now. The figures for today look a bit lower because the official numbers don’t include Iraq and Afghanistan, which are authorized separately from the rest of the Pentagon’s budget, which is only 3.5%. Even the last figure is close to a post-Cold War high: 9/11 gave the Pentagon an excuse to spend a lot more money, even on projects that have nothing to do with terrorism, like the F-35.

Alex, the research I know of is that domestic spending of all kinds has a multiplier of about 1.5 - e.g. Mankiw refers to 1.5 for domestic spending as conventional wisdom in his posts promoting tax cuts - and military spending has a multiplier of 0.8, as shown by Robert Barro, who, like Mankiw, used the number to argue against government spending. Both numbers are meant to be true in recessions - Mankiw quotes New Keynesian consensus, whereas Barro looks at WW2. In times of growth deficits crowd out private investment, and I don’t know of any research that looks at the growth potential of raising taxes to pay for government programs.

]]> By: Matt Roberts http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9867 Matt Roberts Fri, 06 Nov 2009 16:28:45 +0000 http://www.infrastructurist.com/?p=5576#comment-9867 I think the high speed rail versus military spending is a strictly thought exercise. Currently the American defence spending as a proportion of GNP is pretty low, it is simply that we have such a large economy is that it dwarfs all around us. Also the efence of American interests is a historical function of the Federal Governement, and the only times which it was nearly non-existant was when we either had completetly turned inward in isolation or else had been under the umbrella of Pax Britanica in the 19th Century. What we are going to have problems with are the entitlements and other non-historical spending that we have added to the Federal Governement's mandate over the last three quarters of a century. Also does one count the $680 billion as a one time expense or as a total outlay which over the course of construction may begin to have a return on investment and help offset some of the up front costs of the program? Could we again reach a national concensus that a high speed rail network is desirable let alone being practical from a construction standpoint, like that which was formed around the Interstate program - I don't know. I think if we are to see anything it will be via regional groupings of states and not the Federal Government, as the political will may be easier to come by with a smaller group of stakeholders. I think the high speed rail versus military spending is a strictly thought exercise. Currently the American defence spending as a proportion of GNP is pretty low, it is simply that we have such a large economy is that it dwarfs all around us. Also the efence of American interests is a historical function of the Federal Governement, and the only times which it was nearly non-existant was when we either had completetly turned inward in isolation or else had been under the umbrella of Pax Britanica in the 19th Century. What we are going to have problems with are the entitlements and other non-historical spending that we have added to the Federal Governement’s mandate over the last three quarters of a century.

Also does one count the $680 billion as a one time expense or as a total outlay which over the course of construction may begin to have a return on investment and help offset some of the up front costs of the program?

Could we again reach a national concensus that a high speed rail network is desirable let alone being practical from a construction standpoint, like that which was formed around the Interstate program - I don’t know.

I think if we are to see anything it will be via regional groupings of states and not the Federal Government, as the political will may be easier to come by with a smaller group of stakeholders.

]]> By: Ted King http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9858 Ted King Fri, 06 Nov 2009 00:35:16 +0000 http://www.infrastructurist.com/?p=5576#comment-9858 Oops - whole tree article is at : http://www.nytimes.com/2009/11/05/garden/05tree.html?em Thanks for the dog article though. Oops - whole tree article is at :
http://www.nytimes.com/2009/11/05/garden/05tree.html?em
Thanks for the dog article though.

]]> By: snafu http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9855 snafu Thu, 05 Nov 2009 23:56:19 +0000 http://www.infrastructurist.com/?p=5576#comment-9855 Windmills from China? You know I watch windmill components being trucked over from Mexico everyday...why haven't we found it "disturbing" that we're creating jobs in Juarez Mexico? Living out here in west Texas, I think this is a great place for windmills...it's certainly a windy place Windmills from China?

You know I watch windmill components being trucked over from Mexico everyday…why haven’t we found it “disturbing” that we’re creating jobs in Juarez Mexico?

Living out here in west Texas, I think this is a great place for windmills…it’s certainly a windy place

]]> By: NikolasM http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9854 NikolasM Thu, 05 Nov 2009 23:29:44 +0000 http://www.infrastructurist.com/?p=5576#comment-9854 You have to wean the country off of the Military Industrial Complex and I would propose doing that by turning them into the Infrastructure Industrial Complex. At some point we will have to worry about how that might make us way overbuilt like in Japan but as we are nowhere near that right now I don't see it as a concern. You have to wean the country off of the Military Industrial Complex and I would propose doing that by turning them into the Infrastructure Industrial Complex. At some point we will have to worry about how that might make us way overbuilt like in Japan but as we are nowhere near that right now I don’t see it as a concern.

]]> By: Alex Lessard-Pilon http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9853 Alex Lessard-Pilon Thu, 05 Nov 2009 22:48:55 +0000 http://www.infrastructurist.com/?p=5576#comment-9853 The same issue came up in the comments on Avent's post. I think the hypothetical is that it's "instead of," which might be met with eyerolls. But really it's a thought exercise: what spending practices make a country grow? "Grow" here is subject to interpretation. The same issue came up in the comments on Avent’s post. I think the hypothetical is that it’s “instead of,” which might be met with eyerolls. But really it’s a thought exercise: what spending practices make a country grow? “Grow” here is subject to interpretation.

]]> By: Joe Melnick http://www.infrastructurist.com/2009/11/05/the-daily-dig-strangest-bridges-edition/comment-page-1/#comment-9850 Joe Melnick Thu, 05 Nov 2009 22:01:19 +0000 http://www.infrastructurist.com/?p=5576#comment-9850 The cost-benefit depends; do you spend the $680B on HSR instead of or in addition to defense? The cost-benefit depends; do you spend the $680B on HSR instead of or in addition to defense?

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