An Amherst Massachusetts University economics professor suggested that the state should deal with the economic crisis by putting money into the public services sector to help boost economic development.
The new study, released by Jeffrey Thompson from the Political Economy Research Institute (PERI) at the university, says that funding should go toward education and infrastructure.
“Spending and investing in areas at the core of the public sector mission—providing education and maintaining infrastructure—are effective at creating jobs in the short term and building prosperous economies over the long term,” said Thompson in his "Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax Incentives" report.
Investing in education will not only generate jobs for teachers, bus drivers, custodians, nurses, and others, but it will attract firms and businesses who will employ a highly skilled workforce, people who are productive and able to adapt to the changing economic environment.
Many initiatives require federal funding as well as investments from private businesses. Investing in the maintenance of bridges and roads makes local materials get used and local people become employed, thus creating jobs within the communities, according to the study.
Thompson noted that Massachusetts in particular is in need of bridge repairs as "Fifty-one percent of bridges are structurally deficient or functionally obsolete." Other infrastructure like dams, roads, and drinking water resources will require investments and repairs in the next 20 years.
Thompson’s suggestions resonated with other economists, including professor of economics, Randy Albelda of the University of Massachusetts in Boston. "Better roads as well as a well-educated and well-cared for state populace generates much needed employment today and creates the necessary foundation for continued economic growth. It is by far the best economic bang for the buck," said Albelda in a press release.
In the report, Thompson said that to deal with the recession, which began as early as 2007, government should, instead of offering deals and low corporate taxes to businesses, focus on improving the "physical infrastructure of regions."