Our Economists' Letter on þe Need for Public Investment
We need this stuff, badly...
Economist Letter to Congress on Need for Public Investment: ‘Dear Senate Majority Leader Schumer, Senate Minority Leader McConnell, Speaker Pelosi, and House Minority Leader McCarthy,
With the recently passed rescue package now providing additional relief and stimulus to families in the United States, policymakers have an historic opportunity to make long-overdue public investments in physical and care infrastructure to boost economic growth and productivity.
The share of our Gross Domestic Product invested in federally funded research and development has fallen from around 2 percent in 1960 to just 0.6 percent today; this means less knowledge-creation, fewer good jobs, and a harder time boosting employment in new sectors. Research—and common sense—tell us that this disinvestment is damaging for U.S. communities and our economy as older infrastructure depreciates, and economic and social challenges go unaddressed.
This government disinvestment has also placed the United States at an extreme competitive disadvantage in relation to other countries. Among OECD countries, the United States ranks 22nd in government investment as a percentage of GDP. And female labor force participation has been largely in decline since 1999, in contrast to rising rates in other OECD countries that invest more heavily in care infrastructure.
In addition to federal research investments, physical infrastructure needs must be addressed. The private sector alone is not capable of making the large-scale investments needed to address the overlapping structural challenges currently facing the country, including:
The climate crisis, which poses an existential threat to humans across the globe, as well as largely unaccounted-for risks to our economy;
Structural racism and discrimination against Black, Latinx, and Indigenous communities in the labor market and throughout the U.S. economy; and
The lack of 21st century care infrastructure, leaving families struggling to balance caregiving obligations with work and thus hampering labor force participation, particularly for women. Investments alone will not correct structural racism. But, if designed correctly, a wide range of infrastructure investments in these areas can spur strong, stable, and broad-based economic growth by addressing longstanding racial and income inequality, driving clean energy, increasing consumer and commercial demand, supporting work, creating jobs, improving worker productivity, reducing economic uncertainty, and jumpstarting a new era of innovation.
With the cost of borrowing at record lows, now is the time for the United States to reassert global leadership in the investment in technologies and physical and care infrastructure needs of the future. The next spending package should include robust and sustained investment in physical and care infrastructure, along with science and technology, to solve the problems of the 21st century. We need a clear break from the recent history of declining public investment. Let us come together as a nation and invest in a prosperous and equitable future.
Dr. Hilary Hoynes, co-lead, Professor of Public Policy and Economics, University of California, Berkeley
Dr. Trevon Logan, co-lead, Professor of Economics, The Ohio State University
Dr. Atif Mian, co-lead, Professor of Economics, Public Policy and Finance, Princeton University
Dr. William Spriggs, co-lead, Professor of Economics, Howard University
& 210 others…
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