By channeling resources through the right programs, American infrastructure development will attract hundreds of billions of dollars in private investment, create massive economic growth and create millions of good middle-class jobs, all while integrating the newest technological advancements into our infrastructure projects. This will make America a more secure, more efficient, and more cost-effective place to do business.
Infrastructure is the economy’s circulatory system. America’s energy, telecommunications and transportation networks act like veins, moving goods, people, services, energy, and information to where they are needed. The speed and efficiency of these networks dictate the strength of our economy, which cannot grow any faster than the infrastructure system which nourishes it.
Here's what we're doing about it
-CREATE AN AMERICAN NATIONAL INFRASTRUCTURE BANK: We cannot entrust a massive infrastructure overhaul to the politicians in Washington. An independent and nonpartisan National Infrastructure Bank must be created to manage financing operations, identify worthy projects, work with local partners and create a national strategy for overhauling America’s energy, transportation and information networks.
-BRING BACK BUILD AMERICA BONDS: There are massive pools of investment funds sitting around the world just dreaming of a safe investment like American infrastructure projects. Build America Bonds turned dreams into reality, offering attractive rates to investors while reducing the borrowing costs to states and local governments. Under this program, the problem was not attracting investors. The problem was that the program attracted more investor demand than there were bonds available! This program must be reauthorized by Congress.
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CREATE AN AMERICAN NATIONAL INFRASTRUCTURE BANK:
Think of infrastructure as the economy’s circulatory system. America’s energy, telecommunications and transportation networks act like veins moving goods, services, energy and information to where they are needed. The speed and efficiency of these networks dictate the strength of our economy, and that economy cannot grow any faster than the infrastructure system which nourishes it. Congestion in our nation’s critical arteries will obstruct any efforts to propel economic growth if left unattended. Our economy cannot expand if our clogged infrastructure system continues constraining it.
The severity of this situation is very real, but so are the opportunities. The White House Council of Economic Advisors has calculated that every $1 billion in infrastructure investment creates 13,000 jobs. This means that $1 trillion in infrastructure investment would create 13 million jobs. Now $1 trillion is an enormous number, but that obligation is the result of kicking this problem down the road for decades. The bill has come due. In the 21st century, America’s transportation, energy and telecommunications requirements will grow exponentially. Our current system of roads, bridges, airports, seaports, railroads, public transportation, energy grids and internet access, have already fallen far behind what is needed (and far behind our economic rivals throughout the world).
If this issue is not addressed, our infrastructure deficiencies will strangle America’s economy. We are no longer faced with the question of whether or not we should commit to fully funding a nationwide infrastructure overhaul. We are now faced with the question of how best to finance this necessary investment. The best means of maximizing financing opportunities, attracting hundreds of billions of dollars in foreign investment, and ensuring that infrastructure projects are chosen based on merit and not on political backroom deals, is to create an American National Infrastructure Bank.
First, infrastructure spending should be removed from political influence. There must be a separate, independent, nonpartisan institution responsible for judging infrastructure projects based on merit. Otherwise, every representative in Congress will argue that the most important road, bridge or airport in the country happens to be in their district. An independent National Infrastructure Bank can judge projects based on their true benefit to people and businesses.
This would alleviate any fears of another “bridge to nowhere”. Removing the decisions from politicians will remove the possibility of unnecessary projects being financed. The National Infrastructure Bank would also utilize regional expertise as its structure would most likely be a network of regionalized institutions with central governance. A National Infrastructure Bank is possibly the only means of raising the trillions (plural) of dollars that we truly need to bring our infrastructure system to 21st century standards. The bank could provide a number of services, similar to National Infrastructure Banks in Europe and Asia, such as issuing loans, loan guarantees, bonds and helping to facilitate public-private partnerships. These services would allow the bank to leverage a small amount of initial public investment with a significantly larger amount of private funds.
Currently, there are trillions of dollars in pension funds, sovereign wealth funds, endowments and other large investors around the world that are looking for safe places to put their money. The bonds issued by this bank would be ideal investments for such risk-averse entities. Congress could never appropriate the kind of finances that the National Infrastructure Bank could attract from both foreign and domestic investors. Also, the expense associated with financing our infrastructure development through this model would be very reasonable. Facilitating public-private partnerships (where appropriate) would significantly reduce government expenses. Providing loan guarantees could leverage a small initial investment into significant project capital. And selling bonds at current interest rates would not create an unmanageable obligation. In fact, some have calculated that the increased economic activity and increased tax revenue resulting from such a large-scale project could mean that the bank practically pays for itself.
BRING BACK BUILD AMERICA BONDS:
As mentioned earlier, there are vast sums of money both at home and abroad which are looking for safe investments. Build America Bonds (BABs) provided this opportunity by offering infrastructure bonds with attractive interest rates while still carrying relatively little risk. The Treasury Department found that the use of BABs reduced borrowing costs for states and local governments.
Because of their tax structure and interest rates, BABs were far more attractive than typical tax-exempt bonds. They proved to be extremely appealing to the massive pools of investor funds sitting around the world waiting for infrastructure investment opportunities. This money poured into Build America Bonds during the brief window of time in which the program was authorized. Often, the BABs program had to turn away investors as there was more demand than there were bonds available. Sadly, the BABs program only existed briefly during the years immediately following the 2008 economic collapse. Since then, it has been sorely missed. This program has been praised by infrastructure experts, governors, congressional representatives, and more. Its success can be recreated by simply reauthorizing the original program.