AP IMPACT: Road projects don't help unemployment

[toomuchtime_]

Ten months into President Barack Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn't matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama's argument that more road money would address an "urgent need to accelerate job growth."

Obama wants a second stimulus bill from Congress that relies in part on more road and bridge spending, projects the president said are "at the heart of our effort to accelerate job growth."

Construction spending would be a key part of the Jobs for Main Street Act, a $75 billion second stimulus to revive the nation's lethargic unemployment rate and improve the dismal job market for construction workers. The House approved the bill 217-212 last month after House Speaker Nancy Pelosi, D-Calif., worked the floor for an hour; the Senate is expected to consider it later in January.

AP's analysis, which was reviewed by independent economists at five universities, showed that strategy hasn't affected unemployment rates so far. And there's concern it won't work the second time. For its analysis, the AP examined the effects of road and bridge spending in communities on local unemployment; it did not try to measure results of the broader aid that also was in the first stimulus like tax cuts, unemployment benefits or money for states.

"My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus," said Aaron Jackson, a Bentley University economist who reviewed AP's analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP's analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it."

AP IMPACT: Road projects don't help unemployment - Yahoo! News

 

[TheSuaveOne]

Even if it did show to assist unemployment...it would only be short term, or for as long as the feds kept handing out money for new projects.

The administration should be working to assist in the production of better paying long term jobs. Not digging ditches and pouring concrete.

-TSO

 

[Claudette]

Yep. Those hired will be right back in the unemployment line once the project is over.

Sure hope OL'BO has a PLAN for creating jobs.

 

[toomuchtime_]

Even if it did show to assist unemployment...it would only be short term, or for as long as the feds kept handing out money for new projects.

The administration should be working to assist in the production of better paying long term jobs. Not digging ditches and pouring concrete.

-TSO

The administration should be addressing the central problem limiting economic growth and job creation, the shortage of credit to credit worthy consumers and businesses, but Obama is content to make some snide remarks about fat cat bankers, whine about their bonuses and then demand hundreds of billions more be poured into ideologically sound projects that do nothing to grow the economy or create jobs as this article shows.

With so many troubled assets still on their books, so many of their outstanding loans still in shaky shape and so much uncertainty about the future, banks are understandably reluctant to lend freely even to some who appear to be credit worthy at this time. The federal government could quickly and easily remedy this situation by lending at interest to credit worthy businesses and consumers who are turned away by private sector lenders. If these borrowers turn out to be credit worthy, the government, tax payers, will turn a deficit reducing profit on these loans, but even if every loan the government made turned bad, this program would still do more to stimulate the economy and create jobs than pouring all this money into potholes as Obama proposes to do.