Infrastructe building

[austin_voy]

Okay, building us up is supposed to help the economy. How?

Uncle Sugar pays BJ Construction $1000 to build a sidewalk.

BJ pays CIM Concrete $400 for the concrete.

BJ pays two guys $150 each ($300 total) to build the sucker.

BJ pays COF $60 for extra materials.

$235.50, BJ Construction pockets this as profit and overhead.

Uncle Sugar snatches 16.3% from the two workers, call it $49.

Uncle Sugar snatches $4.50 for payroll taxes from BJ.

Uncle Sugar gets $60 from CIM Concrete in income taxes (they're not smart enough to incorporate in Bermuda, etc)

Uncle Sugar steal $25.90 from BJ Construction in income taxes (ditto)

Uncle Sugar snatches up $10 from COF for income taxes. (another idiot corp. Um, like mine)

So, each of the workers takes home $125. BJ Construction makes $209.60. Before overhead (unless the secretary works for free). CIM Concrete makes $340, before expenses and overhead. COF made $50 before expenses and overhear.

So we have put about $900 "into the economy". And the government get $100 for its $1000 investment. We have now added $900 to our deficit.

Somebody check my suspect math, but I hope you get the picture. We don't need to be spending money, passing it around in circles. We need to be exporting things of value!!! Not importing. BMW is exporting the 5 series SUV to Latin America. They're doing more to help the economy, but they are also taking a bunch of that home to Germany.

[NipLover]

So, the new infrastructure itself won't do a thing for the economy? New roads, bridges, etc. are of no use to the economy?

[Booth]

Originally Posted by NipLover

So, the new infrastructure itself won't do a thing for the economy? New roads, bridges, etc. are of no use to the economy?

This is the new right. If something isn't profitable, cut it. Screw the people.

[Laz]

Infrastructure is a benefit to the economy only if it results in economic activity greater than its cost. Example being a road project that enables a new factory to exist that supports a thousand employees or a road that saves the users of the road 10 times the cost of building the road. That savings is used and results in greater economic activity than the money spent. Building things just to generate construction jobs is a waste.

[Slotgoop]

Take a historical look at the interstate hi-way system and the economic benefits it brought by enabling lower cost transport of goods to market and easier travel. It played a large part in the success the American automotive industry enjoyed and spawned the birth of the "suburbs" away from city centers. Projects like the TVA brought cheap hydro-electricity to the largely undeveloped southeast fostering economic growth there. It all depends on the projects and their public benefit. When those projects are things like the "shovel ready" Walnut Creek hike and bike trail, they may create a few new jobs, but have little to no long term economic benefit.