January, 2009

The American Recovery and Reinvestment Act: Will More Public Spending Pave the Way to Better Infrastructure?

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Congress and the new Administration are considering an $825 billion stimulus package that would in part grant the states $550 billion in new spending, much of which will be dedicated to infrastructure. Proponents claim this money will not only create government-funded jobs but will increase consumer spending and thereby increase incomes, while also improving America’s infrastructure— ensuring safety and economic productivity.

While America’s infrastructure may indeed need improvement, public spending is not the best way to fix it. Our infrastructure needs more than just a physical overhaul. It needs to move from an outmoded model of government provision to a system that permits and encourages innovation and flexibility.