The Federal Reserve and the Department of the Treasury want Congress to approve a $700-billion bailout for the collapsing financial firms. But where is this money coming from? Nobody is increasing taxes. The United States currently has approximately $800 billion of national debt and is borrowing over $4 billion each day to satisfy spending habits. We are either borrowing more money, or we are printing it. These two alternatives seem equally dangerous and are likely to lead to another crash or high inflation. By paying the banks not to collapse, we are, in the words of my Columbia University economics professor Moshe Adler, essentially flipping a coin and saying, Heads, you win; tails, we flip again. This is not only unfair, undemocratic and unconstitutionalits also bad economics.
The tremendous growth and subsequent bust that we have experienced as a country in the past years have been largely driven by regular people buying homes they could not afford and lenders giving away mortgages irresponsibly. Then they packaged these mortgages into securities, which were traded at higher prices. They were absorbed into the international stock market, despite being corrupt at the core, which is partly why the crisis in not limited to within U.S. borders. If any other business managed to get so toxic a product so deeply embedded into the market, it would not only go under, it would be in jail.
Surely the $700 billion could be put to better use. Havent we had enough national catastrophes in the past few years to indicate that our national infrastructure needs a complete rehabilitation? This crash has proven that we have to get past our national obsession with the quick buck and the quick fix. We need to plan ahead, thoughtfully and carefullynot hastily pass a bill that gives Henry Paulson absolute power over almost a trillion dollars worth of our economy.
Infrastructure and energy technology are the only real solutions that we have to combat this recession and to create real, sustained growth in our economy. The Eisenhower administration gave us the national highway system as well as one of the strongest periods of economic growth in Americas history. Well, we could use some of that. We are looking at a widening gap between rich and poor, an industry that has left the country for cheaper labor, and an economy that is going downhill at alarming rates. Construction and technology are some of the best-paid jobs in the market.
Not only that, but the bones of this countrythe bridges, roads, levees, rail lines, sewage systems, drinking water, power grids, schools, and so onare literally crumbling, with devastating consequences. Our infrastructure carries and protects billions of people, and we blithely assume that it will continue to do so into the future. It will notit will deteriorate just like everything else. I understand that infrastructure is not considered sexy in politics, but this is America. Anything can become sexy with enough lipstick.
Numerous studies have called for more investment and warned of dire consequences if that doesnt happensome of which have already materialized. In 2007, the National Surface Transportation Policy and Revenue Study Commission released a study calling for a minimum of $240 billion per year until 2020 to be spent on highways, transit, freight rail, and passenger rail. The American Society of Civil Engineers, in a study released in 2005, called for over a trillion and a half dollars over a five-year period to bring the U.S. infrastructure into reasonably decent shape. The Environmental Protection Agency has called for $440 billion dollars a year over the next 20 years to clean and repair our drinking and wastewater systems. I could go on, but the endless listing of agency names and enormous numbers is probably par of the reason for the lukewarm reaction.
Neither presidential candidate has given us any real proposals for relieving the recession in which we seem to be headed. We have Senator McCain, on one hand, who seems to think that earmarks are the source of all evil. Well consider this, Senator: Earmarks are what pave many of our roads, and I will wager that your voters prefer them that way. On the other hand, Senator Obama has mentioned infrastructure for all of three seconds during his interview with Bill OReilly. However, he has also signed a bipartisan bill co-authored by Senators Chris Dodd and Chuck Hagel to create a National Infrastructure Bank. This would be an independent entity, much like the Federal Deposit Insurance Corporation. It would report to Congress but allocate national investment far more comprehensively than is currently being done. It is certainly a step in the right direction.
Of all the people in Congress, Chris Dodd and Chuck Hagel seem to be the only ones with a sound plan. Both McCain and Obama should be paying more attention to them, rather than their puffed up financial advisers. It is not sufficient to vaguely refer to reforms in Washington. What reforms will you make? Spell them out for us. Make infrastructure and energy technology the center of your platform. This should be plastered all over the front page: As president, I will invest in rebuilding this country from the ground up, literally.