ECONOMIC EXPERTS: AMERICAN FAMILIES PLAN, AMERICAN JOBS PLAN & PUBLIC INVESTMENT WILL BOOST GDP
By investing big in the nation’s physical and human infrastructure, President Biden’s job-creating American Jobs and Families Plans will boost the GDP, turbocharge economic growth, and ensure that America will continue to lead in an increasingly competitive global market.
Here’s what economic experts and advocates are saying:
- “We estimate that if the president’s plan were fully adopted next year, labor force participation would increase by nearly a full percentage point and the economy’s real potential GDP growth would be lifted by 10 to 15 basis points a decade from now.”
Moody’s Analytics: The Macroeconomic Consequences of the American Jobs Plan
- “The apex in the boost to growth from the plan is in 2024 when real GDP is projected to increase 3.8%, compared with 2.2% if the plan fails to become law.”
International Monetary Fund: IMF Survey: The Time Is Right for an Infrastructure Push
“The study finds that increased public infrastructure investment raises output in the short term by boosting demand and in the long term by raising the economy’s productive capacity.
“In addition, the boost to GDP a country gets from increasing public infrastructure investment offsets the rise in debt, so that the public debt-to-GDP ratio does not rise.
“For economies with clearly identified infrastructure needs and efficient public investment processes and where there is economic slack, there is a strong case for stepping up public investment.”
S&P Global: Infrastructure: What Once Was Lost Can Now Be Found — The Productivity Boost
“A $2.1 trillion boost of public infrastructure spending over a 10-year period, to the levels (relative to GDP) of the mid-20th century, could add as much as $5.7 trillion to the U.S. over the next decade, creating 2.3 million jobs by 2024.
“With the U.S. sinking into a deep recession, now expected to be much worse than the Great Recession, the returns on investment from the infrastructure boost would be likely higher over the near term, given costs are lower in the now soft jobs market. And, assuming that the infrastructure spending was wise (prudent spending is sorely needed), the productivity gains later in the decade would generate a bigger boost to economic activity later on, with the multiplier averaging 2.7 over the 10-year period, helping to give the new post-pandemic expansion more fuel as it nears 2030. This translates to $2.70 back for every dollar spent.”
Former U.S. Secretary of Education Arne Duncan: The Kids Are Still Not Alright
“Equal access to high-quality child care and preschool would increase GDP by $551 billion by allowing more parents to seek and keep their jobs while simultaneously developing the next generation of innovators.”
“Upgrading roads, ports, pipes, and other facilities can boost capital spending and create jobs now, plus support long-lasting career pathways and durable economic growth.”
Economic Policy Institute Research Director: The potential macroeconomic benefits from increasing infrastructure investment
“Increased infrastructure investment has been suggested as a primary tool to restore the economy to full health.
“A renewed push to increase infrastructure investment could move fiscal policy from being a drag on growth to being a boost to growth in coming years. Perhaps relevant to upcoming fiscal policy debates, infrastructure investment is routinely estimated to be a much more efficient fiscal stimulus than almost any form of tax cut, and it is significantly more efficient than those tax cuts whose benefits fall mostly on high-income households.”
Georgetown University Center on Education and the Workforce: Trillion Dollar Infrastructure Proposals Could Create Millions of Jobs
“If enacted, the [$1 trillion] infrastructure program could put the United States back on a prerecession job growth path and create more than 11 million jobs.”
Business Roundtable: Delivering For America
“The unique benefit of infrastructure investment is its ability to drive productivity growth. Over 20 years, every additional $1 invested in infrastructure drives roughly $3.70 in additional economic growth. This isn’t just about delivering for U.S. businesses and workers now. This is about creating a new foundation for our economy to be more competitive for the foreseeable future.”
Former Treasury Secretary Larry Summers: Invest in infrastructure that pays for itself
“Most notably, the IMF asserts that properly designed infrastructure investment will reduce rather than increase government debt burdens. Stated boldly: Public infrastructure investments can pay for themselves.
“What is crucial everywhere is the recognition that in a time of economic shortfall and inadequate public investment, there is a free lunch to be had — a way that government can strengthen the economy and its own financial position. The IMF, a bastion of ‘tough love’ austerity, has come to this important realization. Countries with the wisdom to follow its lead will benefit.”
Visiting Faculty In Economics At Emory University Sheila Tschinkel and Professor Of Finance Emirata At The University of Colorado Denver Marcelle Arak: An investment in America’s infrastructure could cost taxpayers nothing
“Now is the right time for a substantial program of greatly needed public infrastructure investment. One of the main objections to this kind of investment – the growth of the federal budget deficit that temporarily results from more spending on infrastructure – is not worrisome because of the gains in economic productivity and potential output. Indeed, it will pay for itself over time: if the real cost of financing the borrowing is close to zero and the return is well above zero, it is as if we are being paid to do this. Let’s not reject a ‘free lunch.’”
Economic Policy Institute: Ambitious investments in child and elder care could boost labor supply enough to support 3 million new jobs
“Based on our research, such an investment would support 3 million new jobs and substantially help stem the erosion of women’s labor force participation in the United States relative to our advanced country peers.”
Levy Economics Institute: Investing in Care: A Strategy for Effective and Equitable Job Creation
“We find that social care spending generates twice as many jobs as infrastructure spending, and 50 percent more jobs than green energy development. Social care investment also yields more equitable outcomes for workers: care investment creates twice as many jobs for low-income households as the infrastructure construction does; and care investment improves the earnings of poor workers more than infrastructure spending does.”
Brookings: Paid leave as fuel for economic growth
Women with access to paid leave are “40 percent more likely to return to work after giving birth than those without access to leave. Allowing working mothers—and fathers—to take some leave without fearing lost income could strengthen attachment to the labor force and therefore increase national economic output.”
Center for Equitable Growth: The benefits and costs of investing in early childhood education
“A voluntary, high-quality, publicly funded universal prekindergarten education program serving all 3- and 4-year-old children would generate annual benefits that would surpass the annual costs of the program within eight years. In the year 2050, the annual budgetary, earnings, health, and crime benefits would total $304.7 billion: $81.6 billion in government budget benefits, $108.4 billion in increased compensation of workers, and $114.7 billion in reduced costs to individuals from better health and less crime and child abuse. These annual benefits would exceed the costs of the program in 2050 by a ratio of 8.9 to 1.”
Georgetown University Center on Education and the Workforce: The Dollars And Sense Of Free College
“The increases in college attainment for just the new students that could result from a national tuition-free program like the Biden plan would potentially yield a total of $371.4 billion in additional federal and state tax revenue, along with private after-tax earnings gains of $866.7 billion, in the first 11 years of the policy. By the end of this period, the additional annual tax revenue would exceed the program’s annual cost.”