Infrastructure should have its own budget - Robert Reiche

[DougH 270]

I heard this on NPR driving home today. I thought it was a little more interesting than our regularly scheduled beating another dead horse gun control thread.

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http://www.marketplace.org/topics/economy/commentary/infrastructure-should-have-its-own-budget


In his State of the Union address last night, President Obama talked about the economic importance of education and infrastructure. That's all well and good. But how do we fund these investments when discretionary spending is likely to be cut to the bone in order to reduce the budget deficit?

The answer: We need to treat public investments differently from discretionary spending.

No rational family would borrow to pay for a vacation but not borrow to send a kid to college. And no rational business would borrow to pay current salaries but not take out a loan to buy crucial new machinery.

Yet that's, in effect, what our government does because it doesn't distinguish between current spending and public investment needed to ensure future economic growth.

A rational federal budget would allow additional borrowing for public investments whenever the expected return on those investments is higher than the cost of the borrowing. And it wouldn't borrow a penny if the return on the investment is less than the borrowing costs.

Granted, such public returns can be hard to measure. But well-developed tools exist for doing so.

Studies show for every dollar we invest in infrastructure, for example, we can expect a return of nearly $2 in economic gains. Of course we need to make sure these investments are smart. No bridges to nowhere. Still, no one can argue that much of our infrastructure is badly outdated.

Investing in early childhood education gives us an even bigger bang -- a return on investment of between 10 and 16 percent. A better-education workforce means greater productivity. Putting more money into basic R&D yields a similar big return.

Capital markets are now global. Money sloshes across borders in search of the highest return anywhere.

The only way to ensure private investors will continue to invest in America, and support the high living standards we want, is for Americans to be highly productive. This requires public investments.

Which is why we need a public investment budget -- separate from a current spending budget -- that can't fall victim to partisan bickering and will allow us to keep borrowing when the return on public investment -- and the public good -- justifies it.

"The restraining order says you're only allowed to touch me in freefall"
=P

[davjohns 1]

So...a whole new division of government with a budget that would never fall prey to the general budget...sold to us on the basis of a better future for all?

Great idea! Can we call is Social Security?

Sorry. There are some rational arguments there. But the Federal Government has proven itself incompetent to make it work. It's a great topic for discussion. Thanks for bringing it up. But my skeptic meter pegged on this one.

I know it just wouldnt be right to kill all the stupid people that we meet..

But do you think it would be appropriate to just remove all of the warning labels and let nature take its course.

[kallend 1,635]

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So...a whole new division of government with a budget that would never fall prey to the general budget...sold to us on the basis of a better future for all?

Great idea! Can we call is Social Security?

Sorry. There are some rational arguments there. But the Federal Government has proven itself incompetent to make it work. It's a great topic for discussion. Thanks for bringing it up. But my skeptic meter pegged on this one.

Right, Germany, China, Singapore, South Korea and other nations where governments have made targeted investments for the future have clearly shown us how futile this approach is. Their economies are all in the shitter, right?

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The only sure way to survive a canopy collision is not to have one.

[Bertt 0]

Sorry, but I think you missed his point. It's a great idea, but look how many times the analysis posted by the OP uses the word "rational".
How are you going to apply "rational" to Congress?

You don't have to outrun the bear.

[kallend 1,635]

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Sorry, but I think you missed his point. It's a great idea, but look how many times the analysis posted by the OP uses the word "rational".
How are you going to apply "rational" to Congress?

What makes you think the governments of other nations are more rational than ours?

...

The only sure way to survive a canopy collision is not to have one.