Could $136 billion in infrastructure spending create 5.4 million jobs?

What happens to most of these jobs when the government gets tired of borrowing money.We need to create manufactring jobs for long term growth.

I agree 100%. This economy needs to try and put the brakes on job losses and spending on Infrastructure would help in this area.

I have been following Jacobs Engineering Group (JEC) and I feel they would be a great beneficiary if any increase in infrastructure spending comes to reality. Two weeks ago I sent out a write up of this possibility to my free subscribers when JEC was at $29.00. Now JEC is trading at $42.00+.

Any Infrastructure spending will take some time so we are not out of the woods yet, but I feel this is indeed an area that may help in the turn around of the economy.

http://www.online-stock-trading-guide.com

Disclosure: I do not have any position in JEC,and am not recommending the stock. I have only written about the possibilities for company to my free subscribers since they are involved in Infrastructure spending.

"I don't know whether that 40,000 jobs per billion spent estimate is accurate ..."

of course it isn't accurate. one billion dollars divided by 40,000 jobs equals $25,000 per job. that assumes 100% of the money goes for labor, and that none of the money is used to purchase materials or pay for overhead.

of course, there is the outdated business theory that every manufacturing job creates the demand for five more non-manufacturing jobs. but these are not manufacturing jobs. furthermore, these would be temporary jobs because once the money is spent, there is no more work.

there is a lot of faulty reasoning going on here.

Holy crap, reality. You're right on. I was looking for a whole bunch of other statistics when I should have done exactly what you did. It gets even better. So, say this comes out to $25,000 per employee. The cost of having an employee is generally double. So, the cost, based on your division is $50,000. So, the number is already off by a factor of 2, even disregarding the material costs of construction.

I did some digging and found some old numbers (2002) stating that non-supervisory construction workers earned, on average, $712 per week. Granting 2 weeks vacation, that comes out to just over $35,000 per year. So, if we don't cut the pay by 30%, and hire only non-supervisory workers, the total cost per employee is $71,500 (in 2002 numbers). The 40,000 number is now off by a factor of almost 3, without accounting for material costs.

... now let's unionize them. (Math, itself, explodes)

It makes me wonder (seriously)... am I doing my basic math right? How is it that my simple numbers show this 40,000/$1 billion to be so wrong?

I'm not a professional when it comes to economics and Keynesian monetary policies, but I remember from Economics #101 that to spur our economy we need to witness "multiple propensity to spend/consume" at a factor of 5 or more, meaning for every dollar invested or dispensed, the public needs to make sure that very dollar circulates or changes hands at least 5 times or more throughout our economy to maintain growth. The front-end of pouring $135 billion into infrastructure is only half the battle; the other half is to convince those on the receiving end spend it and not hoard it. Otherwise, if they do not, we're back to square 1 again.

While I agree these numbers are pretty silly and most likely have just been plucked out of the air (40,000 jobs for every billion spent) I think a larger point is that a lot of this investment is going to be going to projects that have long term benefits.

Making government buildings more efficient will directly save money; investing in medical information technologies will lower costs for medicare, Medicaid, private insurers and individuals; and investing in new green technologies will help create new industries, as surely as government investment in the internet, defense technologies, and medical research has created new industries (and the return should be better than with Defense Department or Space Program spending since the research will be directly usable, not just a small side-effect of technology created for other uses)

So even though their numbers might be pure propaganda, I think it's not as simple as dividing the money spent by how many jobs it could afford to pay for. If the money is invested in the right kind of infrastructure and technology then each dollar spent will be worth far more and a hundred pennies.

40,000 jobs per billion means workers are only grossing $25,000/year. The unions will never buy that. Actually, in large construction jobs, my company averages 60% for materials, 30% labor, and 10% overhead. $100,000,000,000 would only create 500,000 temporary jobs at what cost to our debt

How is it that we got into this mess by one group (the private sector) spending money it didn't have, and the answer to the problem is another group (the public sector) spending money that it doesn't have? All of this talk of $700 billion here, $34 billion there. This money needs to come from somewhere. The government can only pay for itself through the taxation of economic activity. And with economic activity reducing, the means by which the government can pay for itself is virtually closed.

If this 40,000 jobs per $1 billion spent is accurate, then Exxon's tax bill alone paid for 1.3 million new jobs. Why not encourage private economic activity? Why not encourage profits by reducing the negative impact of taxation? It is only once profits return that the government will be able to pay for these "improvements". Don't try to "stimulate". Instead, remove the barriers to profitability.

These bailouts and all this additional spending are being paid for with the same methodology that caused this predicament: easy credit. If we want to come out of this recession in a big way, credit should be difficult to get, and profits should be easy.