We are approaching the deadline for the Supercommittee to propose a debt reduction plan.  Most economists agree on what it needs to do:  In the long term, reduce debt by at least $4 trillion over 10 years through a mix of increased revenues and reduced spending.   And in the short term, make immediate investments to create jobs and reduce unemployment. 

I encourage the Supercommittee not to ignore the second of those priorities because now is the perfect time to create jobs by making large scale investments in American infrastructure. 
 
Since World War II every economic contraction has been followed by a period of economic expansion.  But although economists tell us the recession has ended, we have had no expansion. 

The reason our economy is taking so long to recover is because this recession was more severe than any since the Great Depression, something that seemingly few in government, finance or academia realized at the time. 

Because of the historic severity of this recession American households, local and state governments, and foreign governments find themselves in debt like never before.  Consequently consumer demand is and will be depressed while households and governments reduce spending.  Some believe this period of decreased demand will last five to seven years.  And when demand falls businesses don’t hire.  It is that simple.

A federal policy of fiscal austerity will only make matters worse.  Look at the United States in 1937, Japan in the 1990’s and Europe last year to understand that when consumers are not spending the worst thing a government can do is to stop spending itself. 

The economist Peter Morici has written that in order to bring unemployment down from 9 to 6%, we need GDP growth of 4 to 5%.  But GDP growth is expected to be 2 to 2.5% next year, not even enough to sustain current levels of employment. That means that unless Congress acts to create jobs our recovery will remain slow and our economy will be extremely vulnerable to financial turbulence at home or abroad.

In the New America Foundation report “The Way Forward” Robert Hockett, Daniel Alpert and Noriel Roubini make the case that investing $1.2 trillion over five years to rebuild our infrastructure will create 27 million jobs. 

That is more than the 22 million jobs created under President Clinton.  And the job creation of the 1990’s raised so much revenue that our federal budget reached a record surplus.  Times were so good that we were debating the implications of repaying the entirety of our nation’s debt. 

The lesson is that the greatest debt and deficit reduction tool is job creation.  That is why the Supercommittee must include significant job creation components in its recommendations.

The deficit aside, our infrastructure is sorely in need of a massive investment.  Our roads, bridges, airports, energy grid, and water infrastructure are in horrible condition. 

The World Economic Forum ranks America 23rd in infrastructure quality.  The American Society of Civil Engineers gives our infrastructure a D grade.  Transportation for America reports that there are 63,000 structurally deficient bridges in our country including 99 in my community of Western New York. And the Chamber of Commerce claims that we will suffer $336 billion in lost growth over the next five years unless we repair our infrastructure.

To those who believe we can’t afford to make investments at this time I say we can’t afford not to.  A Nevada Department of Transportation report found that delaying road rehabilitation by just two years can increase the cost by a factor of five. 

Think of it this way: If your roof needed $2,000 worth of repairs and you could take out a loan at 2% to pay for it, but if you wait two years it will deteriorate and need $10,000 in repairs and interest rates will have risen, which is the wiser choice?

I would also note that we just spent $62 billion nation-building in Iraq and $73 billion nation-building in Afghanistan.  There was no objection then to borrowing to finance that work.  Nor should there be objection now to borrowing to do some nation-building right here at home.

And given current economic conditions, financing American infrastructure projects will never be cheaper.  Interest rates are extremely low, the cost of labor and materials are low and equipment is cheap because it is idle. 

Repairing and expanding our infrastructure is necessary if America is to stay globally competitive, and it will never be cheaper to do it than it is today.

Quite simply, there is much work to be done, and a lot of Americans need the work. Now is the time to do it. 

A large scale, $1.2 trillion, five year investment in infrastructure would create 27 million American Jobs that cannot be shipped overseas. 

It will reduce unemployment and it will reduce the deficit. And in the end we will have the infrastructure our economy needs and our country deserves.