June 01, 2020
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Maine and the nation need bold infrastructure legislation

George Danby | BDN
George Danby | BDN

As the old proverb goes, “Fortune favors the bold.” Generally equated with military activity, one can make the case that these trying times call for similar bold action. As we all do our best to make it through the COVID-19 pandemic, our thoughts turn to what we can do to jump-start the economy once the pandemic is over. At Frank Martin Sons Inc., which has served Maine since 1952, we believe a robust infrastructure bill is one of the solutions.

The United States’ infrastructure is crumbling, and our leaders in Washington must work in a bipartisan manner to provide long-term certainty and increased investments in federal infrastructure programs. A modern infrastructure system is essential to the nation’s economy and to ensure the efficient movement of all goods — from machinery to agriculture products — to customers and ports. With the FAST Act, a transportation funding bill, set to expire this year and the Highway Trust Fund approaching insolvency, Congress must identify new revenue sources to restore the federal highway program’s long-term fiscal stability and increase investment levels.

Our nation also faces a significant shortfall in dams, levees, airports, broadband, pipes and water system investments. Rural infrastructure is particularly underfunded. In Maine, one short drive reveals our backdrop of deteriorating roads and bridges. Congress and the administration must work to upgrade the United States’ infrastructure substantially.

According to the American Society of Civil Engineers, while infrastructure is a necessary facilitator of economic activity, investments in infrastructure can impact the economy more directly. In the short run, infrastructure spending will increase demand and economic activity. A dollar of infrastructure spending can increase near-term economic output by $1.50, and the multiplier effect can be even more significant in times of recession. In the long run, infrastructure spending can enhance the productive capacity of the economy by helping individuals and businesses to produce and sell goods and services more efficiently. On average, the resulting increase in private-sector output is equivalent to a rate of return of 17 percent on public investments, significantly higher than for most private capital investments, especially for core infrastructure such as transportation, transit, and utilities.

Now, more than ever, it’s time you use infrastructure spending to help pull the U.S. economy out of a recession.

Infrastructure projects are also important in that they create self-worth and a sense of accomplishment for the millions of workers who enjoy good-paying jobs that support families and communities. Further, infrastructure projects are very public by nature. People see the work happening on roads, bridges and buildings. It gives us all a sense that “America is back.”

According to the World Economic Forum, “In fighting the COVID-19 crisis, the Federal Reserve has used all of its monetary tools. A new recession is underway or, as some may say, it’s already here. When monetary policy isn’t enough, a country must turn towards fiscal policy. Right now, reviving the lagging U.S. infrastructure sector may be the best approach. Infrastructure creates economic growth. If the U.S. is going to invest hundreds of billions of dollars in the infrastructure industry, it must use the crisis to reform the sector and make sure it emerges from this recession with a stronger, more durable economy than before.”

As a board member of the Associated Equipment Distributors, North America’s premier organization representing construction, forestry and agriculture distributors, manufacturers, and affiliate member companies employing more than half a million workers in the U.S. and Canada, I believe investing in our infrastructure is a solid bet on our future competitiveness as a nation. Now is the time for the administration and Congress to pass and fund a plan that not only restores vital infrastructure but helps our nation recover from the financial fallout from this tragedy.

Steve Ouellette is president of Frank Martin Sons Inc. in Fort Kent and a member of the board of the Associated Equipment Distributors.

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