I have to echo the thoughts of the poster above, crazy that Robert Reich responded, but props to him.
I will try to help here.
"Public Works" vs. Military, Foriegn Aid, Medicaid, Social Security etc....Public Works are Bridges, Roads, Parks etc. They are projects that often
employ large labor forces to complete.
Thus Infrastructure and "public works" have a very large overlap and are in most cases interchangable terms.
The economic theorey is that this type of government spending is more effective at economic stimulas because.....
(1) It employs many people...people who spend the money quickly in many different ways...groceries, rent, gas etc. and these people's spending can
sustain other businesses. (vs. save/invest)
In contrast to "Reaganomics" or "Trickle-down" economics where more money is given to fewer wealthy people in the form of corporate subsidies, or tax
breaks for the wealthy...where that money is not immediately spent on groceries, rent...staples etc. but rather saved or spent on a expensive singular
items....a new expensive luxury automobile, a second home etc.
Of course the theorey in trickle-down economics is that those wealthy individuals will invest that new extra-income rather than save and that those
welathy individuals will make those investments domestic and it will result in more jobs...somewhere down the line.
In reality...no one invests or expands a business unless there is DEMAND...and the middle and lower class are the ones that create demand. A business
does not hire a 100 new workers because they have more money to spend...they respond to demand...they hire a 100 new workers when folks are buying
thier products and they need
Thus giving banks/businesses/wealthy more money is an odd way way of looking for economic stimulas. Businesses/wealthy individuals will always save
that money or invest abroad until they see demand for thier products...which are bought be the middle and labor classes..expand.
Gove the middle class and labor class money and they buy things and drive demand and the businesses hire to expand and those new hires spend and the
economy picks up speed.
A certain political party likes to refer to these wealthy folks as "job creators" in hopes of furthering this argument.
That has been repeatedly disproven by history. Trickle-down was once called "horse and sparrow" theorey in the late 1800's...feed the horse enough
oats and they will pass through the manuer and the crows can eat what is left
The Bush era tax breaks have been in effect for nearly a decade...all during the economic crisis...how many jobs did those tax breaks for the "job
The "Job Creators" take that extra income and save waiting for the right opportunity to invest and then often invest in "rent-seeking" incomes...buy
an aprtment building...invest in derivatives...grain futures... rather than widespread quick spending as a large labor force would spend.....immediate
living expenses, groceries etc.
Plus money given to "Job Creators" is often invested in other countries since their only motivation is money, not the health of the domestic economy
at large...see Mitt Romney's tax returns. A little over half of his wealth is invested abroad.
Infra-structure has a bonus effect beyond the wages being immediately spent in a diverse way and supporting/stimulating other businesses....as that
new bridge, improved road, faster tele-communications line...lead to more commerce, transportation of goods, more technically capable cities
etc..easier for businesses to make money in the future.
Thus a Keynesian would argue that infra-structure spending stimulates the economy in a quicker, more reliable way via a large labor force that spends
on necessities and has a bonus effect of having future benefits to businesses in the form of improved infra-structure.
This is still hotly debated and is thick with partisan ideology, but I would recommend researching a bit on your own and coming to your own
edit on 11-6-2012 by Indigo5 because: (no reason given)