Multiplier Effect - some results

My previous post, "Multiplier Effect," outlined the economic impact of various possible stimulus packages. On the top of the list -- those stimuli that provide the greatest productivity improvement per dollar spent -- were capital infrastructure improvements.

President-elect Obama's new plans include:

Save one million jobs through immediate investments to rebuild America's roads and bridges and repair our schools: The Obama-Biden emergency plan would make $25 billion immediately available in a Jobs and Growth Fund to help ensure that in-progress and fast-tracked infrastructure projects are not sidelined, and to ensure that schools can meet their energy costs and undertake key repairs starting this fall.

and...

Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments.

It sounds promising, but of course the devil is in the details. As this Washington Post article points out, many of the actual projects will be more maintenance-type activities, rather than huge monorail systems. But if the goal is to improve the job situation at the same time as improving national infrastructure, these types of projects will certainly help. The big risk, when spending large amounts of money quickly, is of fraud, theft and corruption. In that case, the money will still have a stimulative effect -- even the thief spends his swag -- but the national will not get the full benefit.