Comprehensive infrastructure investments will complement pandemic recovery, not cause inflation – Dakota Free Press
Moody Analytics says the passage of the $ 579 billion “hard” infrastructure bill will do the economy much more good if it is passed alongside the Democrats’ $ 3.5 trillion reconciliation plan:
The report, written by Moody’s chief economist Mark Zandi, says the adoption of the $ 579 billion ‘hard’ piece of infrastructure – with money for roads, bridges, transit, rail, broadband and more – on its own would actually be a drag on growth in the short term, as some of the offsets would take effect immediately while spending was slower to roll out. But by 2023, inflation-adjusted economic growth would be 0.6 percentage point higher, with 650,000 new jobs created by the middle of the decade.
If lawmakers follow through on the $ 3.5 trillion budget reconciliation plan under discussion, any negative effects on growth in 2022 would be reversed and real economic growth could be nearly a percentage point higher, said Moody’s. [Laura Weiss, “Moody’s: Infrastructure, Budget Packages Will Boost Growth, Jobs,” Roll Call, 2021.07.21].
Rather than fueling inflation, this combination of constructive laws would simply complete our recovery from the pandemic recession:
Fears that the plan will trigger too high inflation and overheating the economy are overblown. The budget support it provides is only enough to bring the economy back to full employment after the recession caused by the COVID-19 pandemic, ”he wrote. [Michael Schnell, “Zandi Argues Spending Packages Will Help Economy, Rejects Inflation Concerns,” The Hill, 2021.07.21].
Vast investments in infrastructure will also compensate for past neglect and strengthen our economy against climate change:
The nation has long underinvested in physical and human infrastructure and has been slow to respond to the threat posed by climate change, with growing economic consequences. The bipartite agreement on infrastructure and the reconciliation package help to solve this problem. Greater investments in public infrastructure and social programs will increase productivity and workforce growth, and attention to climate change will help prevent its increasingly corrosive economic effects [Mark Zandi and Bernard Yaros Jr., “Macroeconomic Consequences of the Infrastructure and Budget Reconciliation Plans,” Moody’s Analytics, 2021.07.21].
Building roads, bridges, water systems and other physical infrastructure will strengthen our economy. Supporting this building with more comprehensive investments in human infrastructure will further strengthen our economy.