A growth engine?

Without question, it is a sobering economic landscape for the United States in 2008, Wang said. However, he added that there is one potential growth engine: domestic infrastructure work.

Save for a few projects, the Bush Administration is likely to oppose Congressional Democrat leadership efforts to increase spending on infrastructure, CNNMoney.com reported Tuesday. The opposition will be based on limited government and lower taxes grounds, but Wang said political support for the work may increase, just the same, if the U.S. economy does not show signs of recovery in the second half of 2008.

Infrastructure: Work to be done

Wang said the public infrastructure spending argument rests on three points.

First, the United States has largely ignored the condition of its infrastructure for more than 30 years, Wang said, and work needs to be done. "But you can only ignore it for so long . . . deny investment, then it bites back," he said.

Examples abound, Wang said. In August 2007, an interstate highway bridge in Minneapolis collapsed. In August 2003, the absence of one power plant and a barely-adequate electric grid triggered a blackout of 10 million customers in the Northeast U.S. and Canada. Many public water systems, particularly in older cities, are antiquated and leaking water, he said.

Further, more than 30% of the nation's interstate highway system is in need of repair or expansion, he said. Also, the nation's rail network -- a critical transportation asset if high oil prices continue -- will need a massive upgrade to make it a viable transportation alternative in the 21st century. In addition, it's generally agreed, Wang said, that the nation's hospital network is not large enough to handle the increased in-patient services that will be needed as the Baby Boom generation retires and ages. Many K-12 schools and pubic parks are in need extensive work, as well, he said. In short, a large amount of U.S. infrastructure work needs to be done, he said.

And doing the work would create good, largely high-paying jobs, Wang said, another incentive for infrastructure spending. Even better, he says, almost all of the dollars would be based in the United States, not in foreign countries, and recirculate through U.S. towns and counties.

Impact on U.S economy

Finally, the public infrastructure spending would produce "a most salient result" Wang said -- it would stimulate U.S. economic growth even more than the income tax rebate and investment credit act passed earlier this year.

Moreover, given the housing sector's contraction, "it's more than likely that the first economic stimulus will not be sufficient to get the U.S. economy growing again," Wang said. The economy will need another shot in the arm.

"From both an infrastructure needs and an economic stimulus standpoint, you can make a strong case for infrastructure spending," Wang said. "Of course, if private sector investment and growth magically returns to robust levels, the case is less strong. But don't look for that anytime soon."