When President Obama proposed a National Infrastructure Bank recently, it wasn't a surprise -- the president has supported such an entity at least since his presidential campaign. At the time, however, it was not framed as a jobs-creation program but rather an investment in the country's future, which is a much more accurate description of the kind of institution that ought to be created. Over at Citizen Cohn, Alexander Hart delivers a solid breakdown of what that would mean in practice by looking at the analogous European Investment Bank:
The EIB’s record is impressive. Over 50 years after its founding, the bank is still going strong, helping to fund development projects across the continent. A relatively small government investment attracted much larger amounts of private money, and the combination has helped fund high-speed rail in Spain, an expressway in Poland and electrical wires in Hungary, among many other projects. In 2009 alone, the EIB loaned out over $65 billion.
There's also the fact that, depending on how it is organized, an NIB could cut down on the most wasteful earmarks by giving national and regional concerns a bigger part to play in the funding process rather than the district-by-district concerns of members of Congress. One bit of nationalism I don't find offensive is infrastructure competition among nations. If other countries have faster, greener trains, well, we put a man on the moon, didn't we? No reason we can get someone from Boston to Washington in faster than six and a half hours -- or upgrade our broadband infrastructure, or build a smart grid for energy. You get the idea.
So will it get through Congress? You'd think Republicans who make a fuss about earmarks and think there should be more private-sector input into building public infrastructure would be interested in this idea, but the politics don't look promising.
-- Tim Fernholz
