Which infrastructure projects would you invest in?

Firstly, IANAE (I am not an economist).

There seems to be some sympathy for the Keynesian notion that one way out of recession is to (a) reduce interest rates and (b) make substantial investments with public money into infrastructure projects. Well in the UK we’ve done (a) to the extent that interest rates are at a record low. It would appear the only thing left is to start with the infrastructure investments.

So what would you do to stimulate the UK economy? Here’s my list:

  1. Fibre To The Home (£29bn)
  2. New airport in the Thames Estuary (£14bn)
  3. Crossrail (£15bn)
  4. High-speed rail link to the Midlands (£20bn)

A total bill of £78bn, a staggering amount in normal times but looking less intimidating compared to the sort of money the UK government is putting into rescuing the ailing banks.

All the items on my list are existing proposals. Two of them are actually Conservative Party policy, so there is no lack of support for Keynesianism there.

Crossrail is struggling to get the private finance it needs to get off the ground. This is not surprising given the current problems with the availability of credit. The government should just do away with the PFI smokescreen and get this project on their balance sheet.

There’s lots of other possibilities, but I’ve tried to include projects where the benefits are obvious and immediate and nothing is added to the operational cost base of the government – all these things would generate operating profits once built.

And they would all benefit me personally. So get on with it please, Gordon.


10 Responses to “Which infrastructure projects would you invest in?”

  1. 1 Sean February 9, 2009 at 12:19

    no insight, but am very curious to see how UKFI develops…even contemplated sending my CV when they were advertising for Directors but then decided I didn’t have the time to commit to a process that was 99+% destined to fail (ie my candidacy…I may be naive, but not THAT naive) and then in the 0.001% that I was offered the job I was ambivalent as to whether or not I would even want it, so decided against applying in the end.

  2. 2 Dominic Sayers February 9, 2009 at 11:28

    Hi Sean, not sure you’d want Alistair Darling (or George Osborne) as a partner in your disruptive investments :-)

    Interestingly, the budget for UK rail infrastructure contains a small annual sum (£200m or so) for ad-hoc projects that do not have to demonstrate their value until after implementation. This is in complete contrast to the centrally-planned, cost-benefit-analysed approach taken with the remainder of the budget. Not sure which approach generates the most value, but you can bet the central planners will skew the figures in their favour.

    Anyhow, this was just a way of agreeing with you. I wonder if UKFI would like to redistribute any of its profits in this way?

  3. 3 Sean February 8, 2009 at 13:21

    FTTH, definitely. Plus a few billion for disruptive venture investments in financial services and markets…

  4. 4 Gilmour Poincaree January 26, 2009 at 13:44

    How so ?!!! … they move pointing eastwards and sideways ?!!!

  5. 5 Dominic Sayers January 26, 2009 at 13:34

    Interesting fact about the Panama Canal – to get from the Atlantic to the Pacific you travel eastwards along the canal.

  6. 6 Gilmour Poincaree January 26, 2009 at 12:10

    East-west and West-east … we wouldn’t want to build a one hand canal … the traffic jam would be catastrophic …

  7. 7 Dominic Sayers January 26, 2009 at 08:34

    Hi Gilmour and thanks for your idea. Are you proposing one new canal or two? :-)

  8. 8 Dominic Sayers January 22, 2009 at 16:01

    …probably also the Olympics as well, since I live a mile from the site. I would think another £2bn will take care of the shortfall in private sector funding, bringing my modest proposal up to a round $80bn.

  9. 9 Gilmour Poincaree January 22, 2009 at 14:14

    A cross country canal from the Atlantic to the Pacific and vice versa …

  1. 1 Keynesian News « Dominic Sayers Trackback on May 15, 2009 at 12:33

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