Obama plans massive infrastructure programme

Barack Obama revealed more details on Sunday of an economic rescue plan that experts say could cost as much as $1 trillion. The incoming president is faced with 6.7 per cent unemployment at a time when the National Bureau of Economic Research says America has now been in a recession for a year.

In response, Obama told NBC's Meet the Press (below) that he planned to initiate a massive public works programme. This would include road and bridge building projects as well as improving nationwide access to broadband internet and renovating the computer systems in schools and hospitals. His statements of intent have already drawn comparisons with Franklin D Roosevelt's 'New Deal' package which helped relieve America from the great depression of the 1930s.

"In saying twice that 'things are going to get worse before they get better', Mr Obama was not simply reflecting the realities of the stricken US economy but seeking to gain political advantage from the financial crisis," said Tim Reid in the London Times. "The economic conditions – combined with a Democratic-controlled Congress – mean that Mr Obama is perhaps the most powerful incoming President, in terms of the ability to pass legislation quickly, since Lyndon Johnson took office in 1963."

Peter Baker and John M Broder of the New York Times note that conservative economists say spending on public works does not alleviate tough economic times. In the past "it has not been a reliable catalyst for short-term growth and instead is more about politicians gaining points with constituents". However, they point out that Obama is well aware of those criticisms and so has skirted around putting a price on the plan and focused instead on the long-term benefits for America’s infrastructure.

"We'll measure progress by the reforms we make," said Obama, "and the results we achieve by the jobs we create, by the energy we save, by whether America is more competitive in the world."

While others refer to Roosevelt's New Deal, the President-elect has drawn his own comparisons between his plans and Dwight D Eisenhower's Federal Aid Highway Act of 1956. As Baker and Broder observe though, Eisenhower's act might have created 43,000 miles of new road but – during an economic downturn – it cost the American government and American states almost $130bn.

LAST UPDATED 12:31 PM, DECEMBER 8, 2008