It seems like foreign governments and corporations are craving U.S. public assets like toll roads, electrical grids and railways. In the case of our largest creditor, the Chinese government, they don’t want any more U.S. Treasuries, but they do want to own the hard assets that comprise our nation’s infrastructure.
Thumbs down on President Obama’s infrastructure bank
The Bond Buyer is reporting that U.S. transporation groups have given the thumbs down to President Obama’s proposed infrastructure bank. The core repayment mechanism for loans guaranteed by the proposed bank would be user fees and tolls. This contrasts to the current methods, which involve state and local governments borrowing in the municipal market to fund projects or the federal government collecting gasoline taxes to fund highway infrastructure. Given the growing opposition globally to the privatization of public assets, the core purpose of the infrastructure bank is bound to create more unease among public players and citizens. From the Bond Buyer:
The first time many heard about the United States creating a infrastructure bank was in President Obama’s Thursday speech, but the idea has actually been floating around Congress for a number of years. Former U.S. Senator Chris Dodd of Connecticut proposed the idea in 2007 with inauspicious timing. From the American Water Works Association:
Paul Krugman at the New York Times has a good graph that shows a substantial withdrawal of government demand from the economy. He attributed this to the decline of federal government stimulus to state and local governments as the American Recovery and Reinvestment Act winds down. There is also another factor that is reducing government demand: state and local governments are issuing less debt, which in turn creates fewer building projects and construction jobs.
Energy is the lifeblood of our economy. Today the U.S. Department of Energy relaunched their website and published a beautiful set of interactive maps that show various dimensions of our energy production and consumption. Unfortunately, DOE did not make what I think would be the best map which would be a mash-up, by state, of production and consumption. It would be interesting to see which states are net importers and exporters. Calling Secretary Chu!
Once the Congress and the Obama administration finish their negotiations on the debt ceiling, attention will turn to plans for reducing unemployment. The lack of jobs for Americans is the most crippling element of the recession. There seems to be a growing bipartisan consensus for the federal government to alleviate this problem through the establishment of an “infrastructure bank.” U.S. Senator Kerry has introduced Senate Resolution 652 to create the American Infrastructure Financing Authority. Here is what the legislation says:
Kathleen Kennedy Townsend, the former lieutenant governor of Maryland, writes passionately in The Atlantic about the need to create jobs in the United States, especially those linked to infrastructure. I welcome her opinion as we need more passionate voices drawing attention to the need to stop outsourcing American jobs. We will never recover if we make economic decisions solely on the the basis of manufacturing costs. Ms. Townsend says:
America’s Interstate Highway System celebrates 55 years
This is the best example of how public infrastructure can really anchor tremendous economic growth. We can learn from history and use this time of economic challenge to conceive of equally profound infrastructure goals. From Fastlane, the blog of U.S. Secretary of Transportation Ray LaHood: