Re.Obama aims to build America out of recession, Dec. 7
Money, lots of it, will have to be spent in order to kick-start the economy back to life. In the '50s – in both Canada and the U.S. – huge sums were spent on road building and other infrastructure projects, such as the U.S. Interstate and the Trans Canada Highway system, the Welland Canal and ports as well as expressways and subways in the cities. Capital projects such as these provided long-term benefits to the domestic economy and national and international trade. However, we have fallen behind in the upkeep of our roads, highways and bridges and our whole road network has suffered.
We also need innovations and development of more ecology-friendly transportation methods, including train travel in the more densely populated areas. A high-speed, dedicated train in the Windsor-Quebec corridor would be a good start.
Money spent in such a way is effective because jobs created are for the most vulnerable – unskilled and semi-skilled workers. They spend a higher percentage of their wages, and what they do save is subject to the multiplier effect through the banking system, where a dollar saved is about $12 loaned by the bank for other economic activity.
It's a win-win situation, since infrastructure investment, in contrast to current consumption, has long-lasting benefits. When the inevitable inflation returns, at least we can see what our money bought.
Sigmund Roseth, Mississauga
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