Public Investment Backgrounders & Briefs
01/01/2011
By Lawrence B. Glickman, Department of History, University of South Carolina
In the 1950s and early 1960s intellectuals and political leaders debated the importance of “public spending.” Set off by the economist Paul Samuelson’s important series of articles on the topic, and popularized by John Kenneth Galbraith’s The Affluent Society, the syndicated columns of America’s most influential pundit, Walter Lippmann, and by Democratic politicians critical of the Eisenhower administration economic policies and political priorities, the benefits of public consumption became a key issue in political discourse and even the 1960 presidential election. A number of commentators described public spending as the major political topic of the postwar era. From the mid-1950s through the 1960s, the New York Times assigned a reporter, Edwin L. Dale, Jr., to the public spending beat. Just as the newspaper had labor and consumer affairs correspondents in this era, it assigned a reporter to the issue because of the fundamental importance of the topic.
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01/01/2011
By Jason Scott Smith, Department of History, University of New Mexico
Economic stimulus has become controversial. The American Recovery and Reinvestment Act (ARRA), passed by Congress in 2009 and signed into law by President Barack Obama, put public investment back on the policy agenda. ARRA was, as Obama put it, “the most sweeping economic recovery package in our history…[one] that will bring real and lasting change for generations to come.” A number of politicians and experts agreed with Obama. For example, California Governor Arnold Schwarzenegger, drawing on the historical example of Franklin Roosevelt’s New Deal, said, “This is the most perfect time…to lay out a plan to rebuild America, just like Roosevelt has done because it would stimulate the economy and it would stimulate a tremendous amount of jobs.” Economist Mark Zandi, an adviser to John McCain’s 2008 presidential campaign, testified before Congress that public works investment delivers $1.59 of revenue for every dollar spent, versus $1.22 for every dollar of tax cuts. “The boost to GDP from every dollar spent on public infrastructure is large,” stated Zandi, “and there is little doubt that the nation has underinvested in infrastructure for some time, to the increasing detriment of the nation’s long-term growth prospects.”
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