Another Shot at Infrastructure

This week President Obama announced a $50 billion infrastructure plan to improve the nation’s roads, railways and runways over the next six years. The plan also lays out long-term plans for America’s infrastructure by developing an infrastructure bank, expanding environmental sustainability and integrating a high-speed program over the next generation.

The announcement couldn’t come at a better time. Data released last week shows that construction spending fell to a 10-year low in July and the country lost 54,000 jobs in August.

Infrastructure investment can improve both these figures. According to federal figures, every $1 billion invested in infrastructure can create about 35,000 jobs and fuel $6.2 billion in economic activity.

When President Obama took office, one of his first promises was to put Americans to work by repairing crumbling infrastructure.

Roughly $230 billion worth of his economic stimulus plan was allocated to infrastructure, but only about $66 billion had been paid out by mid-August, according to The Wall Street Journal.

Where is the money going? California, hard hit by the recession, currently has 8,000 approved projects valued at $25 billion, while Texas has 3,000 projects ($14.6 billion) and New York has 3,500 projects ($12.7 billion). In all, there are nearly 80,000 infrastructure stimulus projects approved or under way across the U.S., according to Recovery.org.

Measuring the impact of another $50 billion will take some time as the President’s plan is intended to take six years. However, with our nation’s infrastructure investment needs estimated to be over $2 trillion, every little bit counts.

About Frank Holmes 265 Articles

Affiliation: U.S. Global Investors

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure.

The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories.

Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.”

He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies.

Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications.

Visit: U.S. Global Investors

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