Larry Summers laments lack of US infrastructure spending
Two things happen if you listen to Larry Summers long enough.
- You learn that he's a visionary and a genius
- You dislike him anyway
It's a shame because talent and vision are seriously lacking in Washington. He's an eloquent speaker on secular stagnation and isn't afraid to swim against the grain. Unfortunately, he's abrasive and made a few missteps that blocked him from being a shoe-in as Fed Chairman or remaining in the highest levels of power after a stint as Treasury Secretary.
If he had played his hand a tiny bit better, he would be steering debates like this: Today the WSJ carries looks at his recent comments lamenting the lack of US infrastructure spending.
"At this moment . . . the share of public investment in GDP, adjusting for depreciation, so that's net share, is zero. Zero. We're not net investing at all, nor is Western Europe," he told a Princeton University audience.
The US basically only invests enough to replace aged roads and bridges. The WSJ notes that infrastructure spending is 0.06% of GDP compared to 1% in the 1960s.
There are very few economists anywhere that argue against infrastructure investments. They improve productivity and pay for themselves in economic gains. It makes even more sense with borrowing rates so close to zero.