All indications are that, early on in Obama's presidency, he is going to push for big spending on rebuilding tunnels, bridges, roads and highways. Part of his reasoning for this is that large parts of our infrastructure need rebuilt ... the other part is that he sees this as a big stimulus for jobs. In fact, it appears as though this may be his biggest plan for job stimulus.

I agree that our infrastructure needs rebuilt. It appears as though part of his plan will be to channel funds through the states but some of it will be federal direct funds. My preference would be for it to go through the states. In either case, though, this all will need to be watched carefully to ensure it does not turn into pork barrel spending by congress. And, always, my preference over federal investment would be for state and local governments to have adequate tax base to cover their own infrastructure spending. Spending will be more efficient that way and more closely watched.

The problem, of course, is that, with a recession happening and threatening to worsen, cities, states, counties, and schools are finding themselves with a shrinking tax base and less money to spend. In all likelihood, many municipalities will have serious financial meltdowns in the next year or two. Their income is shrinking as the economy shrinks and they are also finding it nearly impossible to pass levies. Selling bonds will also be difficult. The same goes for schools, as we're seeing in my own hometown.

So, if infrastructure is going to be rebuilt and governments and schools are going to be supported, it needs to happen either with federal funds or by a rapid re-invigoration of the local tax base. My preference, of course, would be to see federal tax cuts to individuals and businesses, along with spending stimulus programs (tax credits for clean and renewable energy investments being a good one), which will help local economies get back on their feet. But, if our new president is determined to have federal spending for infrastructure, then so be it.

That said, I foresee a major problem with using this federal spending as the primary national plan for job growth. Federal spending on infrastructure will focus on specific areas of the country -- those areas where jockeying members of congress are able to commandeer it. However, because of the expense of these projects, there will be huge areas of our country completely unaffected ... unemployment will not be improved in those areas and cities and schools will continue to suffer. Non-profits which support the disadvantaged of our communities will also suffer.

Again, Obama has made it clear that this sort of spending to increase jobs is high on his agenda. If you agree with the points I am making about "how" this is best done, please join me in writing your congresspeople and trying to be heard. There may be hope. If not, I am afraid that this program will be spotty at best and certainly not successful on a national basis.

If you disagree with me, I really do want to hear your reasoning as well! I do not claim to be an expert on these matters -- I am just trying to take a common sense look from a business person's perspective. With any luck, my blog can be a venue for reasonable and logical discourse regarding our nation's economy in the coming months.