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Policy Proposals

Infrastructure investment as an automatic stabilizer

May 16, 2019

The Problem 

Transportation infrastructure provides a fundamental underpinning for economic growth and provides valuable, long-lived benefits for firms and households alike. Unfortunately, previous attempts by Congress to use infrastructure spending as fiscal stimulus have largely been too little, too late to help stabilize the economy. Transportation infrastructure spending is also heavily decentralized, which makes it difficult to coordinate over the business cycle.  

The Proposal

Andrew Haughwout proposes an automatic transportation infrastructure investment program that would draw on federal funds as well as local expertise to increase infrastructure spending during an economic downturn. During a recession, the program would automatically expand BUILD funding for state and local infrastructure projects, prioritizing high-quality projects that would be able to use the funds quickly.    


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