Amid the high drama of fiscal brinkmanship in Washington, it's easy to forget that reducing budget deficits isn't the biggest economic challenge we face. Even more important is kick-starting the great American job machine and reversing our country's slide in global competition.
Critical to both goals is shoring up the decaying physical foundations of national prosperity. Without world-class infrastructure, the United States won't be able to attract private investment, sustain rapid technological innovation and productivity growth, or keep good jobs from going overseas.
According to a new Gallup poll, general economic concerns (35 percent) and unemployment (22 percent) top voters list of worries, with federal deficits and debt a distant third at 12 percent. Fiscal restraint is important, but it must be balanced against the larger imperatives of jobs and global competition. Among other things, this means leaving room for public investment to replenish the nation's stock of physical capital.
America can't build a more dynamic and globally competitive economy on the legacy infrastructure of the 20th Century. Thanks to their parents' far-sighted public investments, baby boomers grew up in a country that set the world standard for modern infrastructure. But after a generation of underinvestment, compounded by politicized spending decisions, we now face a massive infrastructure deficit that exerts a severe drag on U.S. productivity.
Meanwhile, China and other fast-rising countries are building gleaming new airports and bullet trains. To keep from falling farther behind, the United States needs to make large-scale capital investments in repairing decrepit roads and bridges; upgrading air and sea ports; building "intelligent" transportation systems and smart energy grids; modernizing the air traffic control system; speeding up our pokey rail networks; and leading the world in deploying ultra-fast broadband.
But with the government strapped for cash, it's reasonable to ask where the money to rebuild America will come from. The answer is that we need to look more to the private sector. U.S. companies are sitting on $2 trillion in idle cash, and pension funds, overseas investors and sovereign wealth funds also are looking for places to invest. Although the federal government will have to put up seed capital, its main role should be to leverage private investment in state-of-the-art infrastructure.
That's why America needs a National Infrastructure Bank. As proposed by the bipartisan trio of Senators John Kerry, Kay Bailey Hutchison and Mark Warner, the bank would use a modest, one-time appropriation of $10 billion to leverage enormous investments -- $640 billion over 10 years -- for projects with the greatest potential to put Americans to work and enhance U.S. competitiveness.
President Obama has repeatedly endorsed a national infrastructure bank and proposed the idea again in the budget he sent to Congress in February. But the Senate bill (and a separate House proposal championed by Rep. Rosa DeLauro) have decided advantages over President Obama's proposal. The president's approach starts with a smart idea to create programs that work more with the private sector to find financing solutions. But unlike the Kerry proposal, it does not focus enough on the most powerful tools for leveraging private investment: loan programs that include a reasonable cap on the federal share of project costs. Obama's bank would also be housed within the Department of Transportation, whereas the Kerry bill would make the bank an independent, quasi-public entity. That's an important difference, because to attract hard-headed capitalists who expect a real economic return on their investments, the government's financing facility must be genuinely free of political interference.
An independent infrastructure bank would select projects based on their ability to generate real economic returns rather than their influential political patrons. As a self-sustaining entity that would not rely on future appropriations from Congress, the bank would not be subject to the pork barreling and earmarking that distorts federal and state infrastructure spending, especially on transportation.
It's time to get serious about our dilemma: the U.S. economy is creating too few jobs to bring down unemployment to pre-recession levels. For that, we'd need nearly 12 million new jobs, or about 100,000 more on average than the 200,000 the economy is creating each month. Big capital projects would immediately create those jobs where they are most desperately needed--in the hard-hit construction industry, which is still struggling with a 20 percent unemployment rate.
In the short run, a big national push to build modern infrastructure could create high-skill jobs that can't be exported. In the long run, it will ensure America's return to being an engine of production, not just a global center for consumption. That's why, as Congress struggles to contain federal deficits and debt, it needs to make room for a National Infrastructure Bank to rebuild America.
The Lobbyists won't allow to cut spending for their puppet projects and their puppets in Congress/Senate will ALWAYS vote what the Lobbyists ordered them to do!
Republicans WARmongers Crusaders want our TAX Dollars wasted on building "Roman-type Castles" (aka Military Bases) instead of Roads and Bridges in the USA!
and
Democrats want the same as above to a lesser extent so that the remaining meager balance goes to Welfare some or most of which end up with those who need it the least (Corporate Welfare and Farmers with over ONE THOUSAND ACRES of Land!!!!! and NO Mortgage!!!!!!!!!!!!!!!!!!)
Who would not want a guarantee like that.
1. Our problem is not so much that we lack infrastructure but that our policies at all levels of government have encouraged the development of a dispersed spread out wasteful lifestyle that makes excessive infrastructure necessary in the first place. In some American cities as much as 70% of the land area is directly dedicated to car traffic and parking. This pushes things apart and requires use of a car to get around.
2. Our economic problems are not actually attributable to our infrastructure but to other impoortant factors such as our lack of a single payer universal health care model. Jobs in auto manufacturing have been out sourced to Canada because labor costs are lower and labor is more productive, thanks to their national health care.
3. Our economy is sluggish because the unwillingness to tax the rich means that more money continues to be sucked out of the system by the rich instead of remaining in play in the economy.
4. Our jobs keep getting outsourced to other countries because this makes more money for stockholders.
Next, start some bold projects.
For example, recognize global warming is a reality. The Mississippi river will flood more often so make lemonaid out of that lemon moment. Assume the river will overflow its banks so how about laying those big, cement storm drain pipes from the overflow height at the river and route that overflow to the midwest (Texas for example) so that we can grow more crops and feed the world.
Start rebuilding/replacing our crumbling bridges.
Encourage community LANs (Local area networks). I just read that community based LANS offer faster internet connectivity at lower cost and prices then franchised large companies like ATT, Verizon etc.
Give tax breaks to companies who hire additional people and have kept those individuals in their job for at least 1 year. Those jobs must be a predefined baseline salary (we are not talking about minimum wage here), say $70k/yr baseline.
Encourage employer OJT (on the job training) as an option to outsourcing jobs overseas because overseas resources may have the desired skill set
Encourage the Japanese work ethic model where quality is more important then quantity. We need to boost the quality of American made products and that takes a cultural shift.
Global corporations have put the American worker at a disadvantage, and we need to level the playing field. We need to balance capital interests with labor interests.
If we cannot do that from within America, then we will have to form a global alliance of workers to go head to head with the global business leaders who stole our assets and jobs.
The best route is to allow the reduction of the tax burden on transportation. Allow companies to develop the ports as needed. Fed Ex is a key player in moving goods for example, they should be leading. Remove the tax burden of the entitlement state and watch construction and infrastructure boom.
There's virtually no appetite for major infrastructure initiatives in a climate of deficit hysteria.