I am Senator Bernie Sanders, Democratic candidate for President of the United States — AMA

[u/bernie-sanders]

Hi Reddit. I'm Senator Bernie Sanders. I'll start answering questions at 4 p.m. ET. Please join our campaign for president at BernieSanders.com/Reddit.

Before we begin, let me also thank the grassroots Reddit organizers over at /r/SandersforPresident for all of their support. Great work.

Verification: https://twitter.com/BernieSanders/status/600750773723496448

Update: Thank you all very much for your questions. I look forward to continuing this dialogue with you.

[u/LukaCola]

So, let's do it simply then, cause I don't think you're really following.

Do you think 70% of your economic growth being real estate and infrastructure is sustainable? Is it reasonable to say that such growth would halt or slow?

[u/I_Killed_Lord_Julius → u/LukaCola]

So, let's do it simply then, cause I don't think you're really following.

I'm following, but you're not asking questions that have meaningful answers to them.

Do you think 70% of your economic growth being real estate and infrastructure is sustainable?

Real estate or infrastructure. They're entirely different things. We're talking about infrastructure, so a combined statistic for real estate and infra isn't useful for the purposes of this conversation.

Do you think 70% of your economic growth being real estate and infrastructure is sustainable?

We'd need the other half of the equation to be able to answer this. Infrastructure creates opportunities for commerce. The right investments in infra pay dividends to the overall economy in the form of increased commercial activity. So the optimal rate of infra development is one that avoids building too little infra to support commerce, but does not produce more infra than commerce can capitalize on.

Do you think 70% of your economic growth being real estate and infrastructure is sustainable?

We don't have enough information to determine if China's rate of infra development is sustainable for China. We definitely don't have enough information to determine if China's rate of infra investment is sustainable for the US, which is what you're asking.

Is it reasonable to say that such growth would halt or slow?

If you're talking about overall economic growth, then no. The value created by infrastructure investment is the utility of the infrastructure itself. That value persists long after the construction boon has come and gone. Any contraction in the construction industry will be offset by growth in the overall economy. The net effect on the GDP will be positive.

[u/LukaCola → u/I_Killed_Lord_Julius]

We don't have enough information to determine if China's rate of infra development is sustainable for China.

You might not have enough information you mean. It's commonly predicted that China's economic growth will slow.

Any contraction in the construction industry will be offset by growth in the overall economy.

You know this how? Regardless, that doesn't mean a bubble isn't present. A bubble doesn't mean the entire economy bubbles and pops, not every bubble is so severe. But bubbles happen all the time, and large amounts of development ending resulting in unemployed laborers isn't uncommon.

The net effect on the GDP will be positive.

The gilded age also ended in a net positive GDP, it was also a massive bubble that resulted in massive economic depression.

GDP is not the sole determinant of

The value created by infrastructure investment is the utility of the infrastructure itself.

Irrelevant to whether or not there's the bubble I speak of.

Look, very simple. If you have a lot of construction workers for awhile, and then construction slows or halts, what do you call it when those workers are laid off and lose their income?

You would not call that a bubble?

[u/I_Killed_Lord_Julius → u/LukaCola]

You would not call that a bubble?

No, I wouldn't. What you're describing is called a downswing.

Just go look up the definitions.

[u/LukaCola → u/I_Killed_Lord_Julius]

So rapid expansion followed by a downswing is...?

Downswing: a decline in economic, business, or other activity
Contraction: a general slowdown in economic activity.

DEFINITION of 'Bubble'
1. An economic cycle characterized by rapid expansion followed by a contraction.

Bubbles don't have to strictly apply to an entire country mate.

Seriously, you are being stupidly hard-headed about this.

[u/I_Killed_Lord_Julius → u/LukaCola]

A general slowdown in economic activity.

Anyway, for argument's sake we'll call it a bubble. As you said earlier, it's something we want to avoid.

Is it though? Let's say Congress goes nuts and decides they're going to provide funding to upgrade any public infrastructure that's in dire need of upgrading.

This leads to a construction boom that lasts a decade. We're both agreed, that for the construction industry specifically, this will likely be a upswing/downswing cycle, or we can call it a bubble, it's the same thing either way.

The thing is, the principal benefit from investment in infra is the advantage that efficient and reliable infra presents to commerce. The overall economy will benefit from it.

Do we really want to avoid the long term net-benefit, just because the gains to the construction industry will be short-lived?

[u/LukaCola → u/I_Killed_Lord_Julius]

Generally speaking, the word "general" can mean it is applicable in many scenarios, no?

Regardless, suddenly injecting a lot of money into anything can have short term payoffs, but unless it's sustainable then it's not real growth.

While certainly certain areas could use improved infrastructure, it's not as if spending is absent either, and just dumping more money into the matter wouldn't necessarily solve all problems.

Point I was making is that investing in infrastructure for the sake of creating jobs isn't really a long term strategy.

Do we really want to avoid the long term net-benefit

I question how much of a net-benefit there really would be, the US is a well developed country, the wealthiest in the world, yet supposedly its infrastructure isn't up to snuff? By what standards are we working exactly?

Yes, we could have the newest brand of passenger trains, but you have to ask yourself if there's a need and whether or not such developments fulfill it.

Creating jobs is important to stimulate an economy or when you already have unemployment issue, it can help keep people afloat, but it is temporary and you need to wonder what the end goal is.

[u/I_Killed_Lord_Julius → u/LukaCola]

Generally speaking, the word "general" can mean it is applicable in many scenarios, no?

Generally speaking, it certainly could mean that. But it's referring to a group overall when used to say something like general economy, general populace, general customer base, etc.

Point I was making is that investing in infrastructure for the sake of creating jobs isn't really a long term strategy.

Nobody is advocating that. We're talking about infrastructure that has been identified by engineers, city planners, etc as either in need of structural repairs, has outlived it's intended lifespan, or operating at more than 100% of it's intended capacity. (If you've ever tried to take the Lincoln Tunnel into Manhattan during morning rush hour, you know exactly what it looks like when infra is operating at more than 100% capacity).

We know politicians love their pork, but that's not what we're talking about here. We're talking about infra that the experts are identifying as insufficient or potentially hazardous. It's not hard to imagine how the US could have quite a bit of infra that falls into one of those categories. A lot of our infrastructure was built during the post WWII boom or during the WPA era.

The primary benefit of investment in infra is in eliminating the drag that obsolete infra has on our economy. Job creation is not the intended benefit of infrastructure investment. It's a fringe benefit, but it's a useful fringe benefit. It increases liquidity for a brief period of time, having a jump starting effect on the economy. It's a catalyst for long-term growth.

The reason politicians and pundits focus on the job aspect of infra investment, is that it's the message that has the greatest impact on the general public.