Employment and GDP impacts of U.S. infrastructure investment under various financing options, Scenario Two
| Debt | Revenue, progressive | Revenue, regressive | Transfer cuts | Regulatory mandates | |
|---|---|---|---|---|---|
| Total amount of spending ($billions) | $92 | $92 | $92 | $92 | $92 |
| Gross GDP increase from spending ($billions) | $147 | $147 | $147 | $147 | $147 |
| Gross employment increase from spending | 1,104,000 | 1,104,000 | 1,104,000 | 1,104,000 | 1,104,000 |
| Gross GDP decrease from financing ($billions) | $0 | $32 | $83 | $147 | $18 |
| Gross employment decrease from financing | 0 | 241,500 | 621,000 | 1,104,000 | 138,000 |
| Net GDP increase from package ($billions) | $147 | $115 | $64 | $0 | $129 |
| Net employment increase from package | 1,104,000 | 862,500 | 483,000 | 0 | 966,000 |
Note: Multipliers are based on evidence reviewed in Bivens (2011) and Bivens (2012c). Specifically, the multiplier for infrastructure investment is 1.6, the muliplier for regressive tax increases is (-)0.9, the multiplier for progressive tax increases is (-)0.35, the multiplier for transfers is 1.6, and following Bivens (2012c), 20 percent of the stimulative effect of investments driven by regulatory mandates are crowded out. For employment impacts, we assume each percentage-point addition to GDP adds 1.2 million jobs to the economy. The total spending figures are based on the infrastructure investment scenarios and are annual gains taking place over the next decade as described in the text.
Source: Author's analysis of Congressional Budget Office (2012); Electric Power Research Institute (2011); and Pollin, Heintz, and Garrett-Peltier (2009)
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