Ooh boy:
Forget About Hoover Dam and Other Job-Growth Lessons: Ron Klain: When I worked in the Obama White House, one of my most important assignments was to help oversee implementation of the American Recovery and Reinvestment Act, commonly known as the stimulus. The measure met its major objectives, hitting spending targets on time, keeping down waste and fraud, and surpassing the goal of saving or creating 3 million jobs. Yet it never won favor with the public. In defending it, the most common question I heard from friends and foes was something like: “Why didn’t you guys just do what FDR did, and build another Hoover Dam?”... First, it’s important to understand how small a role giant construction projects played in ending the Great Depression. Millions of Americans were employed by the Works Progress Administration and the Civilian Conservation Corps on scores of discrete projects.... The spectacular mega-endeavors that we now associate with the New Deal were actually a small part of the overall program.... The Hoover Dam, the granddaddy of them all, provided jobs for only 5,200 people at its peak employment level. The Tennessee Valley Authority’s signature Wheeler and Norris dams employed even fewer people, about 4,000 each...
The total appropriations for the Hoover Dam were $50 million in nominal. With nominal GDP per worker of $1000 per year back in the 1930s, that means that the immediate employment impact of the Hoover dam was vastly more than 5000 workers. Figure that 50,000 employment-years of useful paid labor were generated by the dam: the people who worked on the dam, and the people who brought materials to the dam, and the people who made the machines that the people who worked on the dam used, and the people who made the materials that were brought to the dam, et cetera, et cetera.
And then there are the multiplier effects: The people who worked on the dam had higher incomes than they would otherwise have had, and they spent those extra incomes, and the businesses that sold them products hired more workers to meet the added demand and hired workers and boosted their incomes, and spent their incomes on extra goods, and businesses then hired more workers to produce those extra goods.
Figure a multiplier of 3, and thus an impact of the Hoover Dam during the Great Depression of 150,000 employment-years of useful work relative to what would have been the case had the appropriation been cancelled and the resources devoted to "deficit reduction."
5,000 is not the number you should carry in your brain as the employment impact of the Hoover Dam.
150,000 is the number you should carry in your brain.
150,000 >> 5,000
How to avoid our own lost decade: [W]e should recognize that it is a false economy to defer infrastructure maintenance and replacement, and take advantage of a moment when 10-year interest rates are below 3 per cent and construction unemployment approaches 20 per cent to expand infrastructure investment...
