Not only that, but with strongly negative real interest rates, it can borrow money to pay people to fill potholes today for less than it would cost to wait.
In fact, it's better than that:
- That calculation doesn't include the savings in reduced wear and lack of deferred maintenance.
- Construction labor is now much cheaper than it would be at full employment.
- Growing consumption now would more than pay for itself in taxes from an averted "lost decade."
Unfortunately the folks in Washington are still worried about 3% inflation and how interest rates are going to spike any day now. So we end up with spending cuts that will almost certainly worsen the deficit over a do-nothing approach.
In fact, it's better than that:
- That calculation doesn't include the savings in reduced wear and lack of deferred maintenance. - Construction labor is now much cheaper than it would be at full employment. - Growing consumption now would more than pay for itself in taxes from an averted "lost decade."
Unfortunately the folks in Washington are still worried about 3% inflation and how interest rates are going to spike any day now. So we end up with spending cuts that will almost certainly worsen the deficit over a do-nothing approach.