PUBLIC INFRASTRUCTURE INVESTMENTS HELP STATE'S ECONOMY, TREASURER SAYS
PUBLIC INFRASTRUCTURE INVESTMENTS HELP
STATE'S ECONOMY, TREASURER SAYS
OAKLAND, Calif., Dec. 9 /PRNewswire/ -- State Treasurer Kathleen Brown today described to a hearing of the Assembly Revenue and Taxation Committee how greater public investment can fuel more private sector output -- and help alleviate California's economic slump.
"For every dollar we invest in schools, roads and clean water systems, we are likely to see a significant return from the private sector," said Brown. "These investments will aid California as it climbs out of the current recession."
Brown referred to the "new math" principles developed by economist David Aschauer to describe the impact of public infrastructure investments on the private sector:
-- Every $1 of additional capital spending increases private
investment by 45 cents.
-- Public investments in streets, transportation systems and water
and sewer projects may result in private sector output that is
four to seven times the cost of public investment.
-- About 60 percent of the U.S. productivity slump can be
attributed to the neglect of our core infrastructure.
The Treasurer made her remarks today at a hearing on California's business climate.
Treasurer Brown added that bonds are a key tool for investing in California's capital needs. Nearly 60 percent of bond funds results in job creation, she said.
"Investing in our infrastructure will not only help improve the quality of life we have all come to enjoy," said Brown, "but it will also demonstrate to businesses that California wants them to stay."
/CONTACT: Jennifer Openshaw of the California State Treasurer's Office, 916-653-2995/ CO: California State Treasurer's Office ST: California IN: FIN SU:
RM -- SF013 -- 0728 12/09/91 17:13 EST