By Robert Borosage
President, Institute for America's Future
On May 21, a "sinkhole" suddenly sank in Washington, D.C. three blocks from the White House. Not a metaphor, but a massive hole in the road as "long as a Ford Explorer," double the width of a train car and 17 feet deep. The asphalt eroded around a metal plate covering potholes in the street and collapsed over a sewer line that was laid in 1897. The sinkhole was expected to take at least five days to "repair."
There is an idiocy about our current national politics that is simply stupefying. We are sitting idly, watching, and suffering, as our nation disintegrates into a run-down backwater. Our airports are a global disgrace. Our railroads, broadband, energy grid all outmoded by international standards. A bridge falls every other day. Our sewage systems are overwhelmed by normal use and collapse in the extreme weather that has become the national norm. Sinkholes now are becoming a life-threatening peril.
At the same time, over 20 million people are in need of full-time work. The construction industry has still not recovered from the housing collapse. The federal government can borrow money for interest rates near zero. Yet instead of grabbing this opportunity to rebuild the country, Washington is focused on cutting budgets, an austerity that clearly costs jobs and impedes the recovery.
Any business leader with a whit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future. That's why the head of the Business Roundtable, former Republican Governor John Engler says it. At the top of his wish list for the economy is borrowing money to invest in roads and infrastructure. The resulting growth will more than repay the virtually free money. We'll end up with a more competitive economy, a healthier and modern infrastructure that will make lives easier and safer, more jobs, more income, more taxes and less debt.
This is literally a no-brainer. Yet when president proposes even a modest infrastructure bill, the Republican Congress rules it dead on arrival.
If desired, Congress could even get the investment done without adding to the debt. The Federal Reserve purchases $40 billion of mortgage-backed securities every month. Yes, every month. (It also purchases another $45 billion of Treasury bonds). This is designed to keep interest rates low -- and is part of the multi-trillion dollar rescue of the big banks, helping them slowly shed the garbage in their basements.
This program – known as "quantitative easing" to befuddle observers -- helps to sustain the recovery, despite the counterproductive budget austerity. But flooding the banks with money is a very inefficient way to create jobs and growth. Banks can sit on the dough, or, worse, speculate across the world, gambling with what is literally the “house's money.” Cheap money is more likely to spur mergers and acquisitions rather than new jobs.
A functional Congress would create a national infrastructure bank -- designed to make vital investments in rebuilding the country. It could issue bonds that the Federal Reserve would purchase with interest rates near zero. If the Fed spend $20 billion on infrastructure bonds, it would help insure against blowing up the next bubble, while actually putting people to work doing work that has to be done.
Wall Street, of course, objects to this heretical notion. If the Fed is going to print money, then the big banks make certain they are at the door with their hands out. But there is no reason for Congress not to act – other than the bitter truth, as Senator Dick Durbin exclaimed, that the big banks "own the place."
“Internal improvements” used to have conservative support. Alexander Hamilton championed them. The Whigs under Henry Clay. Republican Abe Lincoln built the transcontinental railroads and the land grant colleges; Eisenhower the interstate highways. A lot of money was wasted. A lot of insiders got rich. But the country benefited from creating a modern, increasingly efficient infrastructure.
Now the need is pressing; the money is cheap – or free. The work is needed. It is simply idiotic that the Congress refuses to act.
We know Republicans scorn aid to the poor. Food stamps, infant nutrition, pre-school, they argue, offer not a safety net, but in Rep. Paul Ryan's words, a "hammock." The Tea Partiers seem intent on sacking sensible regulation of the air, water, public health, and worker safety.
But repairing roads and rail, building modern airports, keeping our broadband and energy grid at world class standards, making sure the sewers don't leak, strengthening the sinews for the extreme weather that is upon us – this isn't an ideological question. It is just common sense.
That this isn't getting done now reveals exactly how extreme, how corrupt, and how destructive our current politics are.
(Borosage’s Institute for America's Future is a left-leaning think tank).