Infrastructure Investment Steers U.S. Out of Recession

March 17, 2021 by Tom Ramstack
FILE - In this April 20, 2020, file photo work continues on the Interstate Highway 75 project in Hazel Park, Mich. Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another of his top legislative priorities — a long-sought boost to the nation's roads, bridges and other infrastructure that could meet GOP resistance to a hefty price tag. (AP Photo/Carlos Osorio, File)

WASHINGTON — Congress sent clear signals this week that clean energy technology and the infrastructure to support it will provide a path to help the nation’s economy recover from the COVID-19 pandemic.

In two hearings, economists and lawmakers bemoaned the loss of millions of jobs, many of which they said never would return. They also said the hardship fell hardest on minorities and women.

However, they also said a “build back better” strategy for improving roads, public transit, telecommunications and expanding renewable energy sources could offer the solution.

“We must first and foremost invest in our nation’s infrastructure,” said Rep. James E. Clyburn, D-S.C., who chairs the House Oversight and Reform select subcommittee on the coronavirus crisis. “We must put Americans to work at good wages.”

He oversaw a hearing Wednesday in which economists described a dismal outlook for the U.S. economy without strong government intervention.

Similar observations came a day earlier at a Senate hearing in which renewable energy industry officials said a switch to electric vehicles could create new jobs as well as reduce greenhouse gas emissions.

One example mentioned during the House hearing was the combination of government grants, loans and tax credits given to electric vehicle manufacturer Tesla, Inc. They gave the government a roughly 1,000-to-1 return on the investments, propelling the company to a valuation now at more than $52 billion.

However, some Republicans cautioned against lavish spending on electric vehicles and other infrastructure without good evidence they will benefit the economy.

The oil industry, along with its roughly 145,000 employees, could be hurt the worst by an aggressive switch to electric vehicles, according to some of the economists.

“Efforts to eliminate fossil fuels are going to take a tremendous toll on this country,” said Larry Kudlow, a Trump administration National Economic Council director. “We should be adding to the portfolio of energy, not reducing it.”

The main program for propelling the economy to recover is the Biden administration’s American Rescue Plan, the $1.9 trillion stimulus plan the president signed into law last week.

It offers tax credits, grants and low interest loans for various industries and the local governments where they are headquartered. The money is intended primarily to restore jobs lost during the pandemic.

At its peak during the COVID-19 shutdown last year, the unemployment rate rose to 14.8 percent. It now stands at 6.2 percent.

Congress is trying to decide how much of the stimulus plan money — or additional funds — should go to infrastructure to maximize the benefit.

Kudlow warned against spending which provides little return for the investment.

“This recent stimulus bill has expanded the welfare state,” he said. “I fear that it will create more poverty and more unemployment as we go forward.”

President Joe Biden is pinning some of his hopes for profitable infrastructure investment on installing 500,000 new electric vehicle charging stations nationwide by 2030.

They would represent a 10 fold increase in the current number of stations but only a first step toward the millions needed to charge all the vehicles Biden wants to replace gasoline-fueled cars and trucks, according to Energy Department estimates.

The U.S. Transportation Department is exploring several options to fund the infrastructure for the electric vehicles.

One of them would consist of grants to states and cities, which could transfer the money to their electric utilities to upgrade substations. A second option would be an extension of the 30C tax credit that allows businesses to claim a $30,000 credit for installing EV and alternative fuel infrastructure.

Government and industry witnesses at the Senate hearing Tuesday said a switch to widespread use of electric vehicles is possible but requires more development.

Edmund Adam Muellerweiss, chief sustainability officer for car battery maker Clarios, said EVs will become more practical as technology improves to recycle their batteries. Most of the batteries are now discarded into landfills.

“These batteries must be considered a resource, not a waste,” Muellerweiss said.

In The News

Health

Voting

Economy

‘Devil is in the Details’ of Corporate Tax Reform
Business
‘Devil is in the Details’ of Corporate Tax Reform
April 9, 2021
by Victoria Turner

Just as corporations and tax practitioners are beginning to adjust to the 2017 Tax Cuts and Jobs Act, the Biden administration’s proposed changes would introduce further complexities into an already complicated system, according to three U.S.-based tax attorneys. Biden’s proposal increases the standard corporate tax rate,... Read More

Ready to Buy a Home? The Trick is Finding or Affording One
Economy
Ready to Buy a Home? The Trick is Finding or Affording One

LOS ANGELES (AP) — Nathan Long and Lili Chin have struck out so far in their four-month search to find an affordable home in the Los Angeles area — a cold streak that threatens to mess up their anniversary plans. The housing market has been a... Read More

US Jobless Claims Up to 744K as Virus Still Forces Layoffs
Economy
US Jobless Claims Up to 744K as Virus Still Forces Layoffs

WASHINGTON (AP) — The number of Americans applying for unemployment benefits rose last week to 744,000, signaling that many employers are still cutting jobs even as more people are vaccinated against COVID-19, consumers gain confidence and the government distributes aid throughout the economy. The Labor Department... Read More

U.S. Trade Deficit Hits Record High in February
Trade
U.S. Trade Deficit Hits Record High in February
April 7, 2021
by TWN Staff

WASHINGTON - The U.S. trade deficit surged to a record high in February as the nation’s economic activity rebounded more quickly than that of other nations carefully shake off the economic hardships associated with the coronavirus pandemic. The trade deficit jumped 4.8% to a record $71.1... Read More

Global Economy to See Multi-Speed Recovery
Economy
Global Economy to See Multi-Speed Recovery
March 30, 2021
by Daniel Mollenkamp

The pandemic has caused profound and long-lasting changes to the global economy. However, the world also has a narrow window to avoid throwing lots of people into more uncertainty, insecurity, and poverty, said an executive from the International Monetary Fund this week. The picture of the... Read More

COVID-19 Sniffing Dogs Are Here To Stay, But Will They Make A Difference?
Health
COVID-19 Sniffing Dogs Are Here To Stay, But Will They Make A Difference?
March 24, 2021
by Daniel Mollenkamp

ATLANTA - On Sunday, NASCAR joined the list of places using coronavirus-sniffing dogs as a tool to battle the virus's spread. The dogs can be taught to speedily screen large, busy crowds. This, together with the low cost involved in utilizing these dogs, makes them attractive... Read More

News From The Well
scroll top