A National Infrastructure Bank?
Is a National Infrastructure Bank the solution for rebuilding our crumbling bridges, water and sanitation systems, national highways and energy systems while, at the same time, helping solve our unemployment problem?
The collapse of the I-35W bridge, the 5th busiest in Minnesota, in Minneapolis in 2007 is the poster child for the poor state of this country’s crumbling infrastructure. 13 people were killed and 145 injured when the bridge, without warning, suddenly tumbled into the Mississippi River.
Bridges, water and sanitation systems, highways and levee systems are crumbling. The national infrastructure system is in such bad shape that educational TV networks have specials about it and there is even a new series explaining just how bad it is.
Infrastructure 2011 – A Strategic Priority – Urban Land Institute/Ernst & Young, 2011
The Perfect Marriage
A report by the American Society of Civil Engineers (ASCE) in April 2010 estimates that it will take a 5-year $2.2 trillion effort to bring the national infrastructure back to a “satisfactory level”.
Ironically, it is also estimated, due to economic uncertainty, that corporations are holding onto about $2 trillion in cash assets and not reinvesting them at the moment.
Furthermore, our jobless recovery from the Great Recession is a huge stumbling block standing in the way of this nation’s economic recovery. If we could increase job growth that would also have a positive impact on our nation’s long term debt problem.
Joblessness is one of the primary driving forces behind the frightening growth in this nation’s deficits and growth in the National Debt. Not enough people are working. Their taxes are needed to help pay for government services. Now government borrowing is putting an added stress on the national economy and saddling future generations of Americans with so much debt that it will lower their quality of life.
If the $2 trillion in corporate cash assets could somehow be directed toward helping pay for our infrastructure repair it would put millions back to work. It could be the perfect solution for economic recovery and debt reduction.
That is a trifecta… a win-win-win all the way around.
The National Infrastructure Bank
That is where a public private partnership(PPP) proposal, such as has been done in other countries, comes into play.
That would provide a place for corporations to invest cash assets into a place that generates jobs and fixes the national infrastructure all at the same time.
The idea of a National Infrastructure Bank is not new. It has been proposed through many bills put before both houses of Congress since 2007.
The idea is to set up, with federal government seed money, a quasi-governmental entity similar to the FDIC that would coordinate identification and funding for large national infrastructure improvements. It would issue and sell bonds and determine the percentage of federal funding that gets kicked in to supplement state and local funding for such projects.
National Infrastructure Act of 2007 – Senate Bill, S.1926
National Infrastructure Act of 2007 – House Bill, H.R. 3401
Don’t we already do something like that?
You might be asking yourself, “Self, don’t we already do that? Am I not always hearing about federal money to pay for big projects like bridges, tunnels or mass transit that will be lost if my state or local government doesn’t put up their share of the cost?”
Yes, we do already have a program for funding infrastructure projects. The new bank expands that program.
Ironically, at this instant in time that particular program is suspended as one of the emergency measures taken by Treasury Secretary Tim Geithner after we reached the legal debt ceiling limit on May 16th, 2011.
At the moment, no new infrastructure projects are being funded by the federal government.
Why a National Infrastructure Bank Won’t Work
- It is managed by political appointees
- It includes funding for green and other exotic technologies
- It adds to government bureaucracy
The bank, as proposed, will be administered by 5 presidential political appointees. The appointees would decide what projects do and don’t get funded.
It is natural that Presidents would only nominate people who will forward their own political agenda. For example, in Obama’s case, it would be initially loaded with appointees that will prioritize Obama’s conversion to exotic green technologies over say – fixing dams, sanitation systems or levees.
Its not just President Obama who would do that. Every President, Republican or Democrat, would do the same thing. It would be just like how Presidents try to influence the Supreme Court through their appointees.
The political pressure always will be to approve sexy projects that makes the administration look good, not necessarily for much needed infrastructure maintenance.
A national infrastructure bank will be used more to extend a political objective than anything else.
All the while the national infrastructure will continue to be allowed to decay under the surface.
It will drain dwindling national resources intended for one purpose and will be redirected by federal bureaucracy toward another.
That should not be allowed to happen.
The national infrastructure is in serious decay. Rebuilding it will require the creation of millions of new jobs in order to refurbish and maintain it properly.
That must be a clearly directed national priority. Without doubt, it will require the federal government, through policy or legislation, to help solve it.
However, creating another mismanaged political bureaucracy is not the answer.
We need a different solution from the proposed national infrastructure bank.