Cat: Stimulus Better If Aimed At Infrastructure

I received this article in an infrastructure news alert this morning and thought it was worth sharing. As February comes to an end so does the current extension on SAFETEA-LU the highway trust fund bill that expired September 2009. Unfortunately it now appears that it will be extended again possibly until September or December of this year.

Another delay in its passage translates to a longer path to our economic recovery. Without a new highway bill, a long term one, growth in the construction industries will continue to be painfully slow. Without the many needed improvements to our infrastructure we will continue to fall behind, as other countries, like China and India, will continue their economic growth at a robust rate.

If you are reading this and are concerned about our tomorrows, contact your Washington representatives and tell them to move ahead on the reauthorization of the highway trust fund; stalling it stalls our economic growth.

Greg Sitek

Cat: Stimulus better if aimed at infrastructure


Journal Star

Posted Feb 27, 2010 @ 11:14 PM


The economic stimulus package promoted last year during President Barack Obama’s visit to Caterpillar Inc. has been beneficial to the country, Caterpillar believes.

But the company also believes it could have done even more good for the nation’s economy had it been more focused on infrastructure, said spokesman Jim Dugan.

“It is easy to say in hindsight, but we have said that all along. A year ago there was a tremendous amount of economic uncertainty, and it was something we needed. We supported it from the start but felt it needed more of an emphasis on infrastructure, including highways and airport runways and ports,” Dugan said.

He added spending on infrastructure not only creates job and stimulates economic growth but also improves the nation’s competitiveness.

Dugan said highway equipment orders started increasing late in the year and that there are highway projects – mostly resurfacing projects – that will continue in 2010. But it has been somewhat limited to date, and the effects on the economy have been slower to emerge.

Dugan said there is evidence that focusing on infrastructure improvements can stimulate an economy more quickly. He said Caterpillar estimated the amount of the $787 billion U.S. stimulus package enacted a year ago that would be spent on infrastructure would be about $70 billion. In contrast, China planned to spend $468 billion from its own stimulus package on infrastructure last year alone.

“We believe that helped the Chinese economy recover much more quickly,” Dugan said.

Caterpillar anticipates the U.S. economy will grow 3.5 percent in 2010, while emerging markets will see economic growth in the 6 percent range. China, Dugan said, likely will experience better than 10 percent economic growth this year.

Dugan said stimulus-activated growth in any country where Caterpillar does business helps the company, as well; that includes China.

But it is difficult to quantify how much of the company’s improvement later in 2009 can be tied to the U.S. stimulus package, he added.

Caterpillar, he said, has recalled more than 600 laid-off workers in the past two months because of increased demand, but many of those workers have been at plants in East Peoria and Decatur. Most of the products from those plants are exported.

“Also, just given the broad mix of our products, it would be very difficult to tie increased demand to the stimulus package. There are many factors that play into it for a global company,” he said.

Caterpillar could support more stimulus money being approved but believes more should be earmarked for infrastructure.

“Continued investment and reinvestment in infrastructure is very important. It makes us more competitive as a country. That’s the reason why today we advocate a robust highway spending bill, which is up for appropriation by Congress again,” Dugan said.

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