What effect rebuilding the U.S. infrastructure will have on the U.S. economy?

The effect of rebuilding will be positive in U.S. Economy, however the effect will not be as huge as most think.

This type of economic strategy was developed by Keynes that defended the interventionism role of the government in the economy. As you all know the U.S. President Franklin Delano Roosevelt, applied Keynes strategy also known as “New Deal” between 1933 and 1937 with the purpose of recovering U.S. Economy following the stock market crash in 1929.

The “New Deal” in short terms was a government investment plan to reduce and control agriculture production, regulate the financial markets and specially, introducing a huge government investment in public infrastructures. As you all probably know FDR’s “New Deal” was a success.

However in the 70’s following the world economic crisis originated by the oil embargo to the U.S. and to some European countries, similar strategies of the “New Deal” were implemented in the U.S. and in Europe, but this time without success. It was the end of the magic formula to recover economies.

So, we learn from the past that:
- Government investment in infrastructures stimulates positively the economies.
- Full economic recovery usually depends of more factors that only government investment.
- Before a strategy implementation, it is mandatory to analyze the economy and identify the origin and weak spots of the economy, to design an economic strategy with chances of success.