High-Speed+Rail

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[[file:ECONOMY INTERNAL LINK DEBATE DRILL.docx]]


Deficit Spending stabilizes the economy and stimulates investment during a recession

Mark **__ Thoma __**, 5-22-20**__ 11 __** [Mark Thoma is a macroeconomist and time-series econometrician at the University of Oregon. His research focuses on how monetary policy affects the economy, and he has also worked on political business cycle models. Mark is currently a fellow at The Century Foundation. CBS Money Watch, “Government Deficits: The Good, The Bad, and the Ugly,” http://www.cbsnews.com/8301-505123_162-39741324/government-deficits-the-good-the-bad-and-the-ugly/]

Which of these concerns is most important? Notice that in the short-run, the consequences of deficits are mostly positive when the economy is in a recession.Deficits allow us to stabilize the economy  (though it's important we pay the bills when times get better), deficit spending can stimulate investment through crowding in, and there's little danger that the spending will drive up interest rates or be inflationary due to the large amount of slack in the economy.

But in the longer run deficits are mostly problematic. As the economy nears full employment deficits can lead to higher interest rates, crowding out, less investment, and slower growth. Inflation can also be a problem, and if the debt burden gets bad enough, outright default is a possibility.

That's why economists  who have supported the use of monetary and fiscal policy to ease the effects of the recession are recommending that we continue the stimulus for now , or at least that we don't make things worse by reducing spending  or raising taxes before the economy is on better footing.  We do have a deficit problem, and it must be addressed over the medium and longer term in order to avoid the negative effects described above. But reducing the deficit before the economy is on solid footing can be counterproductive  ?€" it could slow the recovery or even cause a setback.

If we are smart ?€" if we continue to help the economy now and implement a credible deficit reduction strategy over the longer term ?€" the good can triumph over the bad and the ugly. Unfortunately, the way things look presently, with the deficit hawks demanding immediate action to stave off [|invisible bond vigilantes], and the inflation hawks pushing for interest rate increases to keep the [|invisible inflation fairies] at bay, there's no guarantee that good will prevail.

Deficit spending on infrastructure creates increased investment and causes economic growth

Mark **__ Thoma __**, 5-22-20**__ 11 __** [Mark Thoma is a macroeconomist and time-series econometrician at the University of Oregon. His research focuses on how monetary policy affects the economy, and he has also worked on political business cycle models. Mark is currently a fellow at The Century Foundation. CBS Money Watch, “Government Deficits: The Good, The Bad, and the Ugly,” http://www.cbsnews.com/8301-505123_162-39741324/government-deficits-the-good-the-bad-and-the-ugly/]

The first thing to recognize is that deficits are not always bad. When the economy goes into recession, deficit spending through tax cuts or the purchase of goods and services by the government can stop the downward spiral and help to turn the economy back around. Thus, deficits can help us to stabilize the economy. In addition, as the economy improves due to the deficit spending the outlook for businesses also improves, and this can lead to increased investment, an effect known as [|__crowding in__]. Deficits also allow us to purchase infrastructure and spread the bills across time similar to the way households finance the purchase of a car or house, or the way local governments finance schools with bond issues. This allows us t o purchase infrastructure that we might not be able to afford if it had to be financed all at once (this can also force future generations who benefit from the spending to share the construction costs). Finally, deficits can be used to finance wars, but whether this is a good or a bad depends upon your view of whether the war is just. So let's turn to the bad next.

Research Assignments
Green Hegemony - Trace, Amber Oil Dependency - Maren, Shreyas Competitiveness (knowledge economy, megaregions) - Sam, Sophie, Etta Clean Energy and Jobs: http://www.fypower.com/pdf/eNews_Docs/Clean_Energy_Jobs_eNews0923.pdf Air Pollution/Environment: Lillie, Chetana, Gaochy "High Speed Rail and Sustainability" http://www.uic.org/IMG/pdf/hsr_sustainability_main_study_final.pdf - Chetana

Perl Ev - Lillie

Econ/Jobs/Tourism: Co- Co Inherency/Solvency - Thor, Ruby, Thorn

China - green tech race article (must lexis nexis): http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1917545

Ruralism Adv - Sam

Neg Answers: http://reason.org/files/1b544eba6f1d5f9e8012a8c36676ea7e.pdf - Maran

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**Investment in high speed rail spurs economic growth in multiple ways – empirical support and studies prove.**
[Petra Todorovich, Daniel Schned, and Robert Lane, High-Speed Rail: International Lessons for U.S. Policy Makers, September 2011, Lincoln Institute of Land Policy, Policy Focus Report]
 * __ TODOROVICH, SCHNED, & LANE 11 __** 1. director of America 2050, a national urban planning initiative, assistant visiting professor at the Pratt Institute Graduate Center for Planning and the Environment and a member of the Board of Advisors of the Eno Transportation Foundation, Masters in City and Regional Planning from the Bloustein School of Planning and Public Policy at Rutgers University 2. associate planner for America 2050 at Regional Plan Association part-time lecturer at the Edward J. Bloustein School of Planning and Public 3. senior fellow for urban design at Regional Plan Association and a founding principal of Plan & Process LLP. Loeb Fellow at the Harvard Graduate School of Design

E C O N O M I C B E N E F I T S __ High-speed rail’s ability to promote economic growth is grounded in its capacity to increase access to markets and exert positive effects on the spatial distribution of economic activity (Redding and Sturm 2008). Transportation networks increase market access, and economic development is more likely to occur in places with more and better transportation infrastructure. In theory, by improving access to urban markets, highspeed rail increases employment, wages, and productivity; encourages agglomeration; and boosts regional and local economies. __ __//Empirical evidence//__ of high-speed rail’s impact __//around the world tends to support the following theoretical arguments for high-speed rail’s economic beneﬁts//. __ __ **Higher wages and productivity** : The time savings and increased mobility __ offered by high-speed rail __ enables workers __ in the service sector and in information- exchange industries __ to move about the megaregion more freely and reduces the costs of face-to-face communication. This enhanced connectivity boosts worker productivity and business competitiveness leading to higher wages __ (Greengauge 21 2010). __ **Deeper labor and employment markets** : By connecting more communities __ to other population and job centers, __ highspeed rail expands the overall commuter shed of the megaregion. The deepened labor markets give employers access to larger pools of skilled workers, employees access to more employment options, and workers access to more and cheaper housing option ____ s outside of expensive city centers __ (Stolarick, Swain, and Adleraim 2010). __ **Expanded tourism and visitor spending** : Just as airports bring visitors __ and their spending power into the local economy, __ high-speed rail stations attract new tourists and business travelers who might not have made the trip otherwise. A study by the U.S. Conference of Mayors (2010) concluded that building high-speed rail would increase visitor spending annually by roughly $225 million in the Orlando region, __ __$360 million__ in metropolitan __ Los Angeles, $50 million in the Chicago __ area, __ and $100 million in Greater Albany, New York. __ __ **Direct job creation** : High-speed rail creates thousands of construction-related jobs in design, engineering, planning, and construction, as well as jobs in ongoing maintenance and operations __ __.__ In Spain, the expansion of the high-speed AVE system from Malaga to Seville is predicted to create 30,000 construction jobs (Euro Weekly 2010). In China, over 100,000 construction workers were involved in building the high-speed rail line that connects Beijing and Shanghai (Bradsher 2010). __ Sustained investment could foster the development of new manufacturing industries for rail cars and other equipment, and generate large amounts of related employment. __ __ **Urban regeneration and station area development** : High-speed rail can generate growth in real estate markets and anchor investment in commercial and residential developments around train stations, especially when they are built in coordination with a broader set of public interventions and urban design strategies __ (see chapter 3). __ These interventions ensure that high-speed rail is integrated into the urban and regional fabric, which in turn ensures the highest level of ridership and economic activity __ __.__ For example, the city of Lille, France, experienced greater than average growth and substantial ofﬁce and hotel development after its high-speed rail station was built at the crossroads of lines linking London, Paris, and Brussels (Nuworsoo and Deakin 2009). __ **Spatial agglomeration** : High-speed rail enhances agglomeration economies by creating greater proximity between business locations through shrinking time distances, especially when the locations are within the rail-friendly 100 to 600 mile range __ __.__ Agglomeration economies occur when ﬁrms beneﬁt from locating close to other complementary ﬁrms and make use of the accessibility to varied activities and pools of skilled labor __ High-speed rail has also been described as altering the economic geography of megaregions. By effectively bringing economic agents closer together, high-speed rail can create new linkages among ﬁrms, suppliers, employees, and consumers that, over time, foster spatial concentration within regions __ (Ahlfeldt and Feddersen 2010). __ This interactive process creates net economic gains in addition to the other economic beneﬁts described here. __