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.
This item is cross-posted at the Huffington Post.

Ryan’s budget as president, even though he intends to present his own “ideas”), you might think the
Football, they say, is a game of inches. So too, is Middle East peace making — both figuratively, and in some cases quite literally. President Obama was reminded of that last week when his comments about terms of reference for future Israel-Palestinian peace negotiations provoked a significant public debate, and in some cases, a furious reaction.
In recent weeks Mitt Romney has been seeking to bolster his claim to be the mainstream establishment candidate capable of beating Barack Obama in the general election. It’s a logical enough claim for any candidate to seek to make, except that his most compelling argument has had more to do with dollars than ideas.
Republicans are crying foul over Democrats’ resort to “Mediscare” tactics to win an open House seat in New York. Democrats are chortling because they think the GOP’s heretofore unstoppable austerity offensive may have met its Stalingrad.
It’s happened so quickly that its significance may have been obscured, but one of the biggest recent developments in Wingnut World has been the rapid devolution of conservative opinion on the pending debt limit crisis–from demands for hard-line negotiations to outright rejection of negotiations at all, often supplemented by claims that the government doesn’t need new debt authority anyway.
This week Donald Trump officially announced that he would not run for President in 2012 saying, “business is my greatest passion” and that he was not ready to leave the private sector. A look at Trump’s contributions to political campaigns suggests that he is quite prepared to put his money where his mouth is when it comes to setting priorities: business before politics.
Immigration isn’t a winning issue for either party. Republicans, under the tea party’s spell, are gravitating toward a purely restrictionist stance, which will complicate their party’s efforts to make inroads among Latinos, the fastest-growing segment of the U.S. electorate. President Obama and the Democrats favor “comprehensive reform,” which includes legalizing millions of workers. With joblessness stuck at twice normal levels, and wages stagnant at best for average workers, that’s a hard sell.
The nuttier elements of Wingnut World were on high-profile display last week in Greenville, SC, as Fox News and the South Carolina Republican Party held the
Although the fall of Arab dictators is in general a healthy development for America, it could also pose some tricky, short-term challenges to U.S. interests in the Middle East. Egypt’s post-Mubarak diplomacy is an unsettling case in point.
Conservative reaction to the president’s announcement of the killing of Osama bin Laden has been relatively, perhaps even surprisingly, positive, given the standard view of Obama on the Right as an irresolute multilateralist afraid to use military force and always ready to apologize for American power.
When I started doing this column back in February, I had this to say about the parameters of “wingnuttery” I considered sufficiently legitimate to address:
Friday, April 22 was Earth Day. We put together five great pieces to celebrate: