What a Massive Infrastructure Program Could Do
The United States circa 1939 to 1941 was not all that different economically from the United States of today. The country was suffering from long term unemployment and vast underemployment. The guy selling apples on the side of the road in 1939 would be considered “employed” by government statistics today.
What changed all that? Well of course World War 2. What World War 2 did was put everybody to work in a decent job, even women which at the time often didn’t work. For the young men that were sent off to war many of the survivors actually gained valuable skills that would have never been obtained in the private sector. The first commercial pilots of the jet age were trained as fighter pilots in the war. Many like my father were given engineering skills.
Essentially, although not the purpose, the war was one big infrastructure and training project. Demand for workers outstripped supply, which is why women were finally accepted into the workplace. This is why baby boomer women starting going to college at rates the same as or higher than their male counterparts. Women in the War proved their abilities in the workplace.
So this leads us to now. I’m not suggesting a war but a massive multi trillion dollar infrastructure project that would revitalize and transform our economy. I’m talking $5 to $7 trillion. I’m talking about putting every unemployed and underemployed American back into a decent paying job. I’m not talking about not just the need for workers but the need for professionals in finance, engineering, HR, technology and management needed to support the effort. It would take all those young people with a college degree providing no benefit and give them the opportunity to finally gain the training and skills they need to have independent living. It would take all the 50 plus sidelined by our stagnant economy and reemploy their experience and skills. We would also enjoy the velocity of money that would continue well after the projects are completed.
We have a deficit and debt reality that makes this seem impossible. But really? We logically will never pay back the $20 trillion in debt to a reasonable level. Even if we balanced the budget for the next 20 years and had an additional $200 billion paid towards the debt each year we would have more than $15 trillion in debt after 20 years once interest cost is factored in. So why not go all the way like we did to fund the war effort. We will never stop deficit spending with current meager GDP gains (most of that come from financial engineering and gimmicks) unless we near eliminated entitlement programs.
The result in 2017 and 2018 is that full employment would generate a huge tax base that would likely keep us near even to where we are today. At some point the US is going to be forced to face the reality of an unsustainable debt. We might as well first get our economy and nation back on track before we do. An economically strong US puts us in a better bargaining position with our creditors. As don’t forget the Fed can be called upon to monetize the debt. There is less threat to the dollar if the US is chugging along with real full employment and productivity.