Modern American Bank™
“The great difficulty with politics is that there are no established principles.”
- Napoleon Bonaparte (1769-1821)
Oh, America! It’s time to reinvent you. You are mired in a deep and prolonged slump. Economic activity keeps slowing. Our political class has been viciously testing the boundaries of their adversaries. We are faced with a lot of bills coming due and we are broke. What can be done?
I’ve been advocating a new type of effort involving the government and the private sector to rebuild and recharge America by creating a federal infrastructure bank funded by U.S. corporate offshore profits. These corporate profits would be repatriated at a 0% tax rate (current law requires their taxation at 35% if brought back to America).
There is approximately $1 trillion of corporate profits held offshore that companies have been parking there since the last tax repatriation in 2004. In simple terms we would pay corporations to bring this cash back onshore and loan it to a federal corporation (structured like the Tennessee Valley Authority) for a term of five to twenty years. We would pay them interest on the loan. How the interest rate on the loan would be set will surely be a matter of intense discussion. And retail and institutional investors must be allowed to invest in the new America by investing in the bank too. It’s a similar idea to “war bonds” but towards a peaceful purpose. In fact, it’s a higher purpose to build a new and revitalized America consciously.
More important than the interest rate paid on these loaned profits is who will own the infrastructure that our new Modern American Bank™ builds? It’s critical that we build publicly-owned infrastructure.
The massive disparity in wealth in our country begs for an increase in our public infrastructure. Our shared infrastructure is the foundation for all economic activity. Think of the Hoover Dam, water systems, roads, highways, ports and harbors. By investing in publicly-owned offshore wind power, solar power arrays and new energy transmission grids, for example, we begin to address our expensive reliance on imported energy. Our infrastructure can shape our future and deserves careful analysis and our strongest and most forceful efforts.
There is already legislation filed in the U.S. Senate that will bring the Modern American Bank™ to life. Senator Kerry introduced Senate Resolution 652 to create the American Infrastructure Financing Authority. With some small amendments America’s new future will be realized. Here is legislation with my amendments in [ ]:
- Establishment of AIFA- The American Infrastructure Financing Authority [Modern American Bank™] is established as a wholly owned Government corporation.
- General Authority of AIFA- AIFA shall provide direct loans and loan guarantees to facilitate infrastructure projects that are both economically viable and of regional or national significance, and shall have such other authority, as provided in this Act.
America is ready to move forward, and the idea of a new Modern American Bank™ is gaining supporters. Former New Jersey Governor Jon Corzine was on MSNBC this morning and endorsed a new bank funded with repatriated corporate profits (approximately at the one-minute mark of the video above). Mr. Corzine said the idea is gaining ground among Democrats in Congress who have previously resisted-tax repatriation proposals.
Our president, Barack Obama, has also begun to include it in his speeches. America is ready if our politicians can bring the Modern American Bank™ to life. We ask one thing only: that it be openly and transparently administered and that all Americans have the opportunity to invest their life savings in the country’s future. We love our nation and we want it to grow and become stronger.