America has a multi-generational opportunity now to build out its national infrastructure with ultra cheap money. And America has a multi-generational need to provide the skeleton on which private industry can grow to offer more jobs for all Americans. And America has a multi-generational need for growth that will hire more Americans for good jobs.
Not since the 1930s and 1950s has America expanded its national infrastructure. Both those investments paid off handsomely. The 1930s saw rural electrification, flood control, and parks construction that brought all America to the modern age and opened up the nation. The 1950s saw highway construction that connected and bound the nation together. After and during those periods, the incomes of the common man and woman all across America increased year after year in real growth for an entire generation.
The second decade of the 21st century should become a similar period of building national strength to support growth for the rest of the 21st century.
Here is the program.
I. Remarkably low interest rates for long term bonds can fund this program. The bonds will be paid from increased revenues that growth will provide. The US Treasury should begin selling $1 Trillion in 10 to 50 year bonds with with maturities distributed from 2022 to 2062 so as to make the cash debt service payments approximately equal every year.
II. Sell both fixed rate and TIPs.
III. Create an infrastructure super committee to choose the projects within guidelines. Committee members swear to have no conflicts of interest and must approve each project personally. Criminal penalties and personal liability will apply to any member who lies about any conflict of interest. An inspector general will review all contracts and performance.
IV. Override ALL environmental laws and prohibit any judicial interference for these projects. Decisions of the super-committee are final.
V. Request the public and private sector to submit proposals for projects, to be considered along with projects from the super committee.
VI. Project sectors: highway buildout, rail buildout, fiber optics buildout, gas and electric transmission line buildout, airport buildout, air traffic control system buildout, cell phone and wireless Internet buildout, port buildout, parks buildout, flood control buildout, etc. (software included).
VII. Objective: connect and bind all America with these systems with special attention to the small cities and rural areas, that great expanse of America that will be the regions of future growth.
VIII. Require all contracts to have fixed prices and fixed completion times. Provide bonuses for coming in on time or early and on or under budget. Put penalties on contracts that are late or over budget.
IX. Require any imported goods or services used therein to bear an excise tax equal to the proportional share of the long term cost of government divided by GDP, currently about 20%. This would be in lieu of the long term job reforms posted yesterday.
X. All projects must commence by year end, 2013. All projects must finish by year end 2021. The entire $1 trillion will be pre-funded by bond sales commencing as soon as possible.
We want a flexible national infrastructure that will work as the world makes the transition from the gasoline engine to other transportation motive forces (likely within 50 years). The infrastructure envisioned would support rail, electricity and natural gas as motive means, and would support alternatives to physical transportation by modern communication technologies and better distributrion networks.
JOBS: that $1 trillion would provide jobs for millions of construction workers and manufacturing and service industries for at least a decade. That will re-start the American economy. As this infrastructure is built-out, private industry will use it and find new needs to be met and new demand for new ideas in new industries.
Revenues from these new industries and jobs will pay for the debt service on the bonds beginning in 2022.
Cost: $1 trillion funded at 3% costs $30 billion per year in interest from 2012 under principal begins to repaid in 2022. Thereafter, the cost is $43 billion per year to pay interst and principal. This amount of debt service is easily achieved from tax revenues of new economic growth in the nation.
Hmmm ... this is rather cheap. Maybe we should consider $2 trillion. $3 trillion sounds letter. Sounds good: costs just $90-120 billion per year.
[Consider the cost of the endless Afghanistan program = about $100 billion per year]
Let's do it - a $3 trillion Build America Program!
Word of the Day
"Euergetism" - noun [$10,000] alt. spelling "Evergetism". From an ancient Greek word meaning "I do good things."
Euergetism means the practice of notables to distribute part of their wealth to the community of 'hoi polloi', rather than to individuals (clientelism).
Sentence: Let's encourage euergetism for today's billionaires: buy the long term Treasury bonds to fund the build-out of America. Do some good by making permanent investments, rather than putting all your money in Philistine hedge funds that simply trade.