How big of an infrastructure program would it take to stop the bleeding of jobs

[Juche]

Nouriel Roubini (economics professor at NYU), who predicted the economic collapse says that by the end of 2009 we will probably see unemployment at around 9.5% (current unemployment rate is 6.5%, underemployment rate is 11.8%). I've been reading his stuff and he, along with Krugman are the economists I read most.

http://www.rgemonitor.com/blog/roubini

I have heard both Roubini & Krugman call for $400 and $600 billion in stimulus packages to stop the job loss. I have also heard that for every 1 million spent on infrastructure, 18 jobs are created. My question is do you need $1 million each year to maintain those jobs or does a $1 million initial investment create 18 jobs that will last for several years due to the economic growth they create?

How many jobs need to be created or lost to change the unemployment rate by 1%?

Supposedly Krugman's numbers are based on an 8.5% unemployment rate. If Roubini is right and we get a 9.5%, we may need a 700-1400 billion stimulus package.

http://econompicdata.blogspot.com/2008/11/krugmans-stimulus-math-600-billion.html

Personally I think this is a great silver lining. Our infrastructure is falling apart anyway and we need to get serious about alternative energy. Not only that, but if we invest wisely we can cut consumer and business expenses on transportation, communications & energy which will not only make US businesses more cost competitive but also make life a little easier for the US public by cutting their expenses.

http://www.asce.org/reportcard/2005/page.cfm?id=103

[BeFree]

1. 30 hour work week

Everybody goes to 30 hour weeks.

Presently, in this example, 300 hours of work is done by 7.5 people in a week.

Cut back to 30 hours per week and you need 10 people to do the same work. 2.5 people with a new job.

[PVnRT]

7. Which would also mean less take-home pay

That's going to be a hard sell to hourly people.

[BeFree]

10. Well

.... the gov., instead of a 700B bailout of the banks, could subsidize the new workers. Every employee would take home the same. Payroll would increase by 1/3. Tax breaks and subsidies would cover that.

In my example jobs would increase by 1/3. We may not need so large an increase. Maybe just 1/10th would be enough?

[Lost4words]

2. I would do just about anything for any job right now.

[Idealism]

3. Some figures I've heard often enough in the past few days

Not completely sure how close to the truth they are but.

IF 1 in 10 workers in the US are tied to the domestic auto industry, and Congress is giving them the finger, they will go into bankruptcy rather soon. If this happens then we will have 10% more unemployment when its all said in done. Now it won't happen all at once, but it will be pretty quick as the suppliers will see the writting on the wall and outsource, if they already haven't, or just close the plant down alltogether and cash out.

During the 1930s, FDR created the Works Progress Administration. It employed around 3 million people per year, for a total of 8 million people in the few years it was in existance. At the time it cost about $4 billion dollars in total to build but that doesn't include maintenance, and if we were to duplicate this in todays dollars, it would cost about $900 billion (figure was from an MIT working paper, ill try to find the address). That is a lot of money but it is certainly an attainable goal. We need something to be done soon, or else we will be plunged into another great depression. Plus the country sorely needs infrastructure improvements, and its unlikely they will come about in any other way (unless every bridge collapses in the US that hasn't already).

[Greyhound]

4. Good question. Repairing and replacing existing infrastructure is step one, If I understand

correctly. Follow this with the needed expansion and throw in newer technology and innovative solutions and I think we're there.

Except for the debt.

That's the pile of elephant poo in the room that we don't want to address. Let's see if this thread goes anywhere.

[Coyote_Bandit]

5. The only long term fix

for our economy is to rebuild our manufacturing base and the infrastructure that supports it - and to redefine our attitudes toward work.

Rebuilding infrastructure and manufacturing is necessary to shift away from a service based economy. This shift should help reduce trade deficits.

Attitudes toward work need to be redefined to allow greater work/life balance - and more acceptance and value of blue collar, technical, trade, and agricultural work/workers.

We need a shift that values tangible productivity over wealth creation.

[cliffordu]

8. Yep. Perfect.

[ben_meyers]

6. Paul Krugman, Nobel Prize winning economists has said

Didn't all these public works amount to a major fiscal stimulus?

Well, it wasn't as major as you might think. The effects of federal public works spending were largely offset by other factors, notably a large tax increase, enacted by Herbert Hoover, whose full effects weren't felt until his successor took office. Also, expansionary policy at the federal level was undercut by spending cuts and tax increases at the state and local level.

And FDR wasn't just reluctant to pursue an all-out fiscal expansion - he was eager to return to conservative budget principles. That eagerness almost destroyed his legacy. After winning a smashing election victory in 1936, the Roosevelt administration cut spending and raised taxes, precipitating an economic relapse that drove the unemployment rate back into double digits and led to a major defeat in the 1938 midterm elections.

What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy's needs.

http://www.iht.com/articles/2008/11/10/news/edkrugman.php

[jdlh8894]

9. IIRC

The only Infrastructure the Fed. Govt. is responsible for are the Interstate Hwys. and Bridges. The city,county,and state Govts.are responsible for their own. Granted ,they get Fed money if they meet certain stipulations but it is not up to the Feds to fix my local water line,etc.

[ContinentalOp]

11. If 6.5% is 10.1 million unemployed, then 9.5% = 14.7 million unemployed.

A difference of 4.66 million jobs.

So if a million in spending creates 18 jobs we would need to spend something like 259 billion to create 4.66 million jobs.