By most accounts, our representatives in Washington will find a way of raising the debt ceiling to avert financial crisis. However, our deficit is not going away anytime soon. We can expect many more rounds of this fight over how we meet out shared sacrifice. We must shift our focus toward how this country grows its economic pie while de-levering our public balance sheet.
Senators John Kerry (D-MA), Kay Bailey Hutchison (R-TX), Lindsey Graham (R-SC), and Mark Warner (D-VA) have proposed an American Infrastructure Financing Authority to do just that. We are entering an era which demands that we reduce public debt-taking while still laying freight rail, building water treatment plants, and generating domestic sources of energy. This bipartisan American Authority would shepherd private capital into these much-needed job producing projects.
Every country in the world intent upon growing its economic pie puts private equity to work building infrastructure. What's more, they rely upon infrastructure banks to ensure that this money moves into the economy efficiently, to scale, and with minimized risk to the public. We can see the success of these infrastructure banks by looking at what's been accomplished in countries such as China and Brazil, which each spent decades moving private equity into infrastructure and energy projects, rather than subprime mortgages. Germany, of course, benefited from the post-War period from a version of an infrastructure bank called the Marshall Plan.
American banks and construction firms have played an essential role in these ambitious efforts. Likewise, our government has been an investor in international infrastructure banks. Where there are these banks and a robust portfolio of public-private-partnerships, there are jobs and more likely a healthy public balance sheet.
The TARP program should not be judged based upon the ability of financial institutions to repay the money. Nor should the program be judged based upon bonuses accrued to bankers. The purpose of the program was to resuscitate our large banks so that they could do the big ambitious things necessary to reverse a decades long divestment from our domestic economy. Whether TARP ultimately succeeds will depend upon whether our financial institutions help reverse a decades long divestment from our domestic economy.
Today, enormous sums of private equity sit on the sidelines of our recovery. TARP banks bear a responsibility to match this money with existing needs at home. Plenty of profitable projects exist. America is a fairly stable place, even if we have our jitters. Asian markets are overheating. The Eurozone faces uncertainty. Gulf states are immersed in transitions. The US is increasingly the jurisdiction of opportunity.
America is not only a leader in innovation, but also has vast untapped natural resources including metals, minerals, and natural gas. We have the technological capacity to home-grow our primary commodities and energy in our research labs. Our workforce is highly skilled and our world-class universities capable of retraining citizens for a twenty-first century economy. We simply need to bring these pools of private capital to bear, fueling infrastructure and energy investment. America will be a magnet for manufacturing jobs once it again has plentiful water, transportation, and energy assets to attract businesses.
With more than enough money sitting on the sidelines to fuel our national resurgence, the task at hand is a political one rather than financial. The depth of our municipal bond market can no longer be taken for granted. Moreover, we must focus public debt-taking on essential services as well as infrastructure projects that keep the economy running but do not themselves turn a profit. For almost all else, there is pension funds, private equity, sovereign funds, petrodollar accounts, etc.
We must open the market wide to investment of all sorts so that we can grow the domestic pie at the scale needed and with the velocity achieved by countries such as China. However, this partnership model has only truly succeeded where infrastructure banks have been a vital partner, ensuring that projects aren't road kill. China, Brazil and Germany are each models of infrastructure bank-driven partnership economies that embrace private equity. We need only look to how they each weathered the global crisis to see the value of this approach. We have abandoned homes, they have ample energy reserves and factories busy exporting goods out of their ports.
The infrastructure statesman, Bernard Schwartz, has urged us to reframe the problems raised by public-private-partnerships as challenges. The United States can find ways of using private capital to create public goods. The bipartisan American Infrastructure Financing Authority can make sure that we use this private capital to add more onramps to our economic highway, more lanes, and to reduce roadblocks. If we do this, America can become the first emerging economy of the twenty-first century.