WASHINGTON–The $500-billion-plus infrastructure bill working its way through Congress is being hailed as an example of bipartisanship, but what will it mean to the economy overall?
It’s a tough question to answer, acknowledged NAFCU’s chief economist, Curt Long, especially since exactly what is in the 2,700-page bill has yet to be revealed.
Long noted that to date NAFCU’s biggest worry has been over how the bill will be paid for, including one proposal related to additional tax reporting—with a goal of driving greater tax revenues—that the trade group opposed.
“It’s hard to parse the different parts” of the infrastructure bill at this point,” said Long. “Taken as a whole, I think part of this is the size of the spending package, but part of this is the timing, too. I think we’re seeing the economy doing fairly well right now. We will see in the employment numbers reported on Friday. The labor market is recovering, maybe not as quickly as we would like, so there is probably some justification for spending right now to stimulate the economy.”
‘Sort of Biased’
Long said that in general economists tend to “love” big government spending packages as they tend to point to benefits to be experienced over the longer term.
“Some of those supply-side spending initiatives not only drive employment in the short term, they provide for a more vibrant economy over the long term,” he said. “So, economists are sort of biased to support infrastructure spending. Obviously, some
projects have better ROI than others.”
Supply Chain Issues
Meanwhile, as CUToday.info reported, while the U.S. economy reported growth of 6.5% during the second quarter, it’s still a number that fell “short of expectations,” according to Long. One of the biggest drags on the economy has been supply chain issues, which have limited inventories.”
Supply chain troubles, said Long, “are going to be a long-haul issue. The problem is you plug one hole in the dike and another one pops up. More and more people are focused on shipping costs. There are container supply issues. I’m hopeful by the end of year things might be closer to back to normal, but I’m not sure things will be.”