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Thursday
Sep082011

Would Obama's Infrastructure Plan Create Jobs Now?

JIM WATSON/AFP/Getty Images(WASHINGTON) -- President Obama isn’t likely to use the term “shovel-ready” in his jobs speech Thursday night, but he is expected to call for billions in new government spending for infrastructure projects he believes will lead to immediate hiring.

“We’ve got roads and bridges across this country that need rebuilding.  We’ve got private companies with the equipment and the manpower to do the building,” Obama told a crowd Monday in Detroit.  “We’ve got more than one million unemployed construction workers ready to get dirty right now.”

Sources knowledgeable about the administration proposals say Obama might seek to fast-track up to $50 billion in infrastructure spending in the next year as part of a broader transportation package -- an idea he first proposed a year ago but failed to gain traction.

The White House has not provided details of the plan or estimates for job creation, but economists on both ends of the political spectrum say infrastructure improvements might not make much of a splash in the short-term.

“It’s not good stimulus,” said Alice Rivlin, a Democratic member of the president’s Debt Commission and former head of the Office of Management and Budget.

“It doesn’t come online fast enough.  If you’re really talking about things that will create jobs quickly, you need to rely on either direct government hiring in the manner of things done in the Great Depression, or demand side things that will get more money spent by wage earners,” she said.

Alan Viard, an economist with the conservative-leaning American Enterprise Institute, said infrastructure spending can be “reasonably powerful” but cautioned additional funding might not be the most effective way to spend the taxpayers’ dime.

“I think we need to be cautious how much we expect any of these packages to do, regardless of who’s proposing them,” Viard said.  ”I think the jury is out on the question of how much demand stimulus can help when you have one of these long recessions following a financial crisis.”

John Horsely, executive director of the American Association of State Highway and Transportation Officials, says a concentrated infusion of $50 billion now could lead to the employment of hundreds of thousands.

“The president wants to jump-start the economy and create jobs, and so if he could manage to get the authority to spend $50 billion all in one year, you would probably have a much higher number of jobs created, if it all happened in one year,” Horsely said.

Republicans have signaled they are not willing to support additional spending that might add to the deficit.

Copyright 2011 ABC News Radio

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