09-28-2016, 03:22 PM
(09-28-2016, 03:17 PM)jamincan Wrote:(09-28-2016, 12:49 PM)tomh009 Wrote: Present value of that $1 is less than $1 if spent five years from now. You could invest the $1 now in something that pays more than 0%, and five years from now you'll have more than $1. Or to look at it the other way, you could invest maybe $0.90 to get to $1 five years from now, so the present value is $0.90.
I don't think this is considering the full picture. First, there is inflation to contend with, so while that dollar could grow if invested, it will likely be worth less too in real terms. Secondly, spending it now on infrastructure is just as much an investment as using it in the stock market or where ever else. It's harder to quantify the value of investments in infrastructure, but the cost of congestion to the economy is enormous, so investing to infrastructure to alleviate that can have much larger dividends in the long run.
Sure, that's all true. This was just a simplified explanation of NPV (Net Present Value). Infrastructure investments make the equation certainly more complex.