The IMF said in its new economic forecasts published yesterday that there is a real need for infrastructure investment in the economy because:
an increase in public infrastructure investment affects output both in the short term, by boosting aggregate demand through the fiscal multiplier and potentially crowding in private investment, and in the long term, by expanding the productive capacity of the economy with a higher infrastructure stock (p. 81).
I don't have time to explore all the impacts of this right now, except to say that this is the logic on which the Green New Deal is built.
Geoff Tily, and old friend of mine and of the Green New Deal group, does however provide an admirable analysis on the TUC's Touchstone blog. Can I suggest it's worth taking a read of what he has to say there?
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Again we have the problem of NO political representation on this with Labour bound and gagged and Greens with no profile available on a large enough scale not to mention the largely unchallenged background narrative of austerity and the familiar ‘there’s no money argument’ (but money was ‘no problem during the floods).
The figures of two million unemployed and 3.4 million underemployed (many ‘sanctioned’ into it) is a scandal that Labour should be shouting from the rooftops were they not so cowed by the austrian narrative.
Under employment is massively unspoken about
I can see an argument that this isn’t needed in the UK as our growth is picking up (I’m not saying it is correct, just that there is an argument). But is there any reason at all why Europe isn’t doing this? After all, it is staring at deflation, has youth unemployment at 50% in places, and although it has some fantastic big infrastructure has an awful lot of shoddy out of date stuff, particularly outside of capital cities.
Agreed
Needed here too though – as our recovery is no such thing when most people do not benefit
Sorry for the repetition, but just have to point out again that all good infrastructure investment raises land values, which could be captured by annual LVT – and produce a virtuous circle.
Keep saying it
Carol -have you read Fred Harrison’s ‘The traumatised Society’? He looks at the absence of LVT and the ripping off of the ‘commons’ from an anthropological and psychological perspective. It is very impassioned.
Any comment on the bit in the report where it said the rest of Europe should copy the UK in their economic policy?
Yes
Of course it should use QE
But green QE