This guest post comes from NBBooks), who was a founding (board). This is posted as part of a serious looking at clean energy jobs‘ opportunities for sparking meaningful employment, quickly, in the United States as discussed in Clean Energy Jobs: Stimulate Me
Some men see things as they are and say why. I dream things that never were and say why not.
-Robert F. Kennedy
According to figures compiled by the America Society of Civil Engineers, a multi-year program of just repairing all existing U.S. infrastructure requires an additional $1.134 trillion dollars than already planned funding.
At 27,000 jobs created for every $1 billion, such a program spread over five years would directly create 6.124 million jobs.
I have further identified a greatly expanded infrastructure program, to bring the United States economy into the 21st century. Building the infrastructure required to end our dependence on burning fossil fuels and shift the United States entirely to renewable energy, and also ensuring all drinking water and waste water management needs for future Americans, requires another $4.686 trillion.
As a ten year program, this would directly create another 12.7 million jobs.
There are only two obstacles between the grim reality of gradual economic decline we now face, and the alluring picture of a United States busily and noisily rebuilding itself back into prosperity: one, the financial system, with its insistence on quick returns and profit rates well above single digits; and two, a cowardly political leadership which is terrified that doing what is needed to re-impose the idea of the national good in economic policies would cause panic in the financial markets.
There’s more downstairs.
This diary draws upon two major sources.
- First, the 2009 Report Card on America’s Infrastructure, by the American Society of Civil Engineers. At the beginning of this year, the ASCE hurriedly updated its 2005 Report Card in an attempt to influence the design and debate of the stimulus program. Since then, the ASCE has greatly expanded its 2009 Report Card web site, with additional commentary, and sourced footnotes. ASCE collects a number of sources to tally the funding shortfall for maintaining America’s roads, bridges, schools, waterways, airports, railroads, electricity systems, and other infrastructure. This rapidly growing funding shortfall is a huge hidden cost of our infatuation with Ronald Reagan and “free market” economics, especially the supply-side theory that cutting taxes will lead to a boom in economic growth. (The economy did not grow – only asset prices did.)
- Second, a February 2009 report by theNational Governors Association: Strengthening Our Infrastructure For a Sustainable Future, which is a treasure trove of sourced footnotes.
A National Inventory of Infrastructure
The National Governors Association report notes that
. . . the nation’s infrastructure currently includes approximately 4 million miles of roads, 117,000 miles of rail, 600,000 bridges, 79,000 dams, 26,000 miles of commercially navigable waterways, 11,000 miles of transit (including more than 5,000 miles of rail transit), more than 3,000 transit rail stations, 300 ports, 19,000 airports, 160,000 miles of high-voltage transmission lines, 55,000 community drinking water systems, and 30,000 wastewater treatment and collection facilities.”
Much of this infrastructure was designed and built a full half century ago, and to make matters worse, it has not been properly maintained. Or, to be more precise, the funding needed for proper maintenance has not been forthcoming. It is no exaggeration to assert that crumbling infrastructure, and the fatalities it causes, is one of the most damaging legacies of the 1980s wrong-wing tide and the Reagan Revolution it washed up on our shores.
The National Governors Association report references a May 2007 report by the American Association of State Highway and Transportation Officials, America’s Freight Challenge:
Tons shipped in the United States are expected to rise from 16 billion today to 31.4 billion by 2035.48 The nation’s previous infrastructure investments in the 20th century have continued to pay dividends as economic productivity has risen and U.S. businesses benefited from logistics (procurement, storage, shipment, and delivery of products) gains.
However, underinvestment is now leading to negative consequences, including congestion which reduces the efficiency of the transportation system. Logistics costs had been steadily declining for decades until recently. In 2003, logistics costs were 8.6 percent of GDP but rose to 9.5 percent in 2005, the largest such increase in 30 years. A full one-third of the increase in cost was attributable to inefficiencies in the transportation system. (Emphasis mine.)
A spike in logistics costs is only one artifact of our under-funded physical infrastructure, as the following quick review makes plain. Please note that the money figures you find below may not always jibe with what is in the table summarizing the American Society of Civil Engineers’ 2009 Report Card on America’s Infrastructure. Many of the numbers will be larger, because of sources I found in the National Governors Association report which appear to have more current numbers, or a better understanding of what is required to meet future population growth. In fact, I should note here that the Civil Engineers’ report presents funding requirements only for repairing existing infrastructure. The much higher figures for building new infrastructure are tallied in another table at the end.
| 5-Year Needs | Spending | Shortfall | |
| Aviation | $87.0 | $46.3 | $40.7 |
| Roads and Bridges | $930.0 | $380.5 | $549.5 |
| Dams | $12.5 | $5.05 | $7.45 |
| Drinking Water & Wastewater | $255.0 | $146.4 | $108.6 |
| Energy | $75.0 | $45.5 | $29.5 |
| Solid & Hazardous Waste | $77.0 | $33.6 | $43.4 |
| Inland Waterways | $50.0 | $29.5 | $20.5 |
| Levees | $50.0 | $1.13 | $48.87 |
| Public Parks and Recreation | $85.0 | $36.84 | $48.17 |
| Rail | $63.0 | $51.30 | $11.70 |
| Schools | $160.0 | $125.0 | $35.0 |
| Transit | $265.0 | $74.9 | $190.1 |
| Total | $2,109.5 | $976.0 | $1,133.5 |
(Unless otherwise noted, most of the numbers and excerpts below come from the Civil Engineers’ Report Card.)
Aviation
The Airports Council International calculates that U.S. airports need $17.5 billion per year in maintenance and improvements. But since 1990, capital funding for airports in the U.S. has never exceeded $7.3 billion annually.
Roads
The current spending level of $70.3 billion per year for highway capital improvements is well below the estimated $186 billion needed annually to substantially improve the nation’s highways.
Bridges
Bridges in the United States are usually designed and built to last 50 years. By the beginning of 2009, the average age of the 600,905 bridges in the U.S. was 43 years. The U.S. Department of Transportation categorize over a quarter of those bridges as either structurally deficient or functionally obsolete. The situation is worse in urban areas, where the Department of Transportation finds that one in three bridges require immediate attention.
The American Association of State Highway and Transportation Officials (AASHTO), calculates that all levels of government spend an annual total of $10.5 billion on bridge improvements. But, AASHTO believes that $17.0 billion a year is required.
Dams
Under the Bush administration, the number of dams in the U.S. rated “high hazard potential dams” by the U.S. Army Corps of Engineers jumped nearly four fold, from 488 in 2001 to 1,826 in 2007. But the number of these “high hazard potential dams” that were repaired fell from 124 in 2001 to 83 in 2007.
In 2009, the Association of State Dam Safety Officials (ASDSO) estimated that the total cost to repair the nation’s dams totaled $50 billion and the needed investment to repair high hazard potential dams totaled $16 billion. These estimates have increased significantly since ASDSO’s 2003 report, when the needed investment for all dams was $36 billion and the needed investment for high hazard potential dams was $10.1 billion.4
The 2009 report noted an additional investment of $12 billion over 10 years will be needed to eliminate the existing backlog of 4,095 deficient dams. That means the number of high hazard potential dams repaired must be increased by 270 dams per year above the number now being repaired, at an additional annual cost of $850 million a year. To address the additional 2,276 deficient-but not high hazard-dams, an additional $335 million per year is required, totaling $3.4 billion over the next 10 years.
Drinking Water
Drinking water systems in the United States face an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful life and to comply with existing and future federal water regulations. Taking into consideration future improvements in water standards, the EPA has estimated that the U.S. requires one trillion dollars over the next 20 years for drinking water systems . This is nearly five times more than the $110 billion per year figure given by ASCE
A February 2002 report by researchers at Harvard School of Public Health, Harvard Medical School, Resources for the Future, Natural Resources Defense Council, and U.S. Geological Survey, U.S. Drinking Water Challenges in the Twenty-First Century, states that
Investment by the United States in maintenance and repair of public water infrastructure has generally been inadequate over the past half century. The 1996 amendments to the Safe Drinking Water Act required the U.S. Environmental Protection Agency (U.S. EPA) to regularly conduct a survey of the infrastructure needs of public water supplies. In its recent survey on these needs, the U.S. EPA estimated that the nation’s water utilities must increase investments at least $151 billion over the next two decades to maintain our public water infrastructure and to ensure safe and healthful community water supplies. Of this total, about $38 billion is for water treatment, $83 billion to repair and/or replace components of the distribution system, and $28 billion to protect watersheds and maintain storage reservoirs. Only a small part of the total–20.7%–is for investments required by the SDWA.
Two other studies support these estimates. The Water Information Network (WIN), a coalition of engineering and construction firms, an environmental group, and water utilities, recently estimated that total annual spending for capital investments and operations by U.S. community water supply systems, currently about $36 billion, must increase by $15 billion. The estimated needs for wastewater infrastructure are even larger: an increase of $19 billion over the current annual expenditure of $25 billion.
Wastewater
The Environmental Protection Agency estimates that the nation must invest $390 billion over the next 20 years to update or replace existing systems and build new ones to meet increasing demand.
Inland Waterways
The present system of locks is now near or beyond the end of their design life and have become a serious constraint to increased river traffic, which is even more fuel efficient than rail. Replacement cost is estimated at more than $125 billion.
Levees
A preliminary estimate by the National Committee on Levee Safety, established after Katrina, put the cost at more than $100 billion to repair and rehabilitate the nation’s levees.
National Parks
For its 2016 centennial, the National Park Service estimates the agency’s facilities will face a $7 billion maintenance backlog. Further studies to identify needed improvements and their cost have not yet been undertaken.
Public Parks and Recreation
According to ASCE, states in fiscal 2007 “spent more than $463 million on new construction of state park improvements to accommodate growing populations. States and territories received nearly $28 million in federal funds in 2007 through the Land and Water Conservation Fund Program. However, they reported more than $15 billion in unmet needs, a significant increase over the amount reported in 2006.”
Freight Rail
More than $200 billion is needed through 2035 to accommodate anticipated growth. The ASCE figure of only $63 billion is for immediate maintenance and repair needs. [NOTE: This does not address the need and value for electrification of the rails, which is a serious Silver BB for our economic, energy, and environmental challenges.]
Transit (repair only)
The Federal Transit Administration estimates $15.8 billion is needed annually to maintain conditions and $21.6 billion is needed to improve to good conditions. In 2008, federal capital outlays for transit were only $9.8 billion.
Energy
Projected electric utility investment needs could be as much as $1.5 trillion by 2030. The ASCE report card notes:
The U.S. generation and transmission system is at a critical point requiring substantial investment in new generation, investment to improve efficiencies in existing generation, and investment in transmission and distribution systems. The transmission and distribution system has become congested because growth in electricity demand and investment in new generation facilities have not been matched by investment in new transmission facilities. This congestion virtually prohibits outages required for proper maintenance and can lead to system wide failures in the event of unplanned outages. Electricity demand has increased by about 25% since 1990 while construction of transmission facilities decreased by about 30 percent. While annual investment in new transmission facilities has generally declined or been stagnant during the last 30 years, there has been an increase in investment during the past 5 years. Substantial investment in generation, transmission, and distribution are expected over the next two decades and it has been projected that electric utility investment needs could be as much as $1.5 to $2 trillion by 2030. Some progress in grid reinforcement has been made since 2005, but public and government opposition, difficult permitting processes, and environmental requirements are often restricting the much-needed modernization.
In September 2008, a report by NextGen Energy Council and Management Information Services, Inc. warned that
Electricity baseload generation capacity reserve margins have declined to 17 percent as of 2007, down from 30 to 40 percent in the early 1990s, and near the 12 to 15 percent that is considered the minimum for a reliable electricity system.
Schools (repair only)
The funding needs just to repair schools was assessed in 1999 at $127 billion, ASCE now estimates $268 billion. The National Education Association’s best estimate to bring the nation’s schools into good repair is $322 billion.
In September 2008, the Economic Policy Institute reported that
School infrastructure spending, after being adjusted for increased construction costs, has decreased dramatically since 2001. While student enrollment has increased 3% since 2001, adjusted spending on school maintenance and construction has dropped by 42%, from $34.9 billion in 2001 to $20.3 billion in 2007. Inadequate facilities can have a negative effect on academic achievement and student health.
One thing I learned that surprised me is that America’s school buildings are in such bad shape, especially in major cities, that groups of parents have filed lawsuits in 31 states, with the physical conditions of their local schools a major part of the complaint. This flood of lawsuits has forced local and state governments to significantly increase capital spending on schools, but a quarter trillion dollar gap still remains.
Hazardous Waste and “Brownfields”
ASCE estimates total funding needs are $77 billion, more than double the $33.6 billion actually spent. In 2006, the National Solid Wastes Management Association estimated that states have disposal capacity for only another 20 years.
Infrastructure for the Future
Thus far, we have reviewed only the areas of infrastructure identified in the Civil Engineers’ report as requiring more funding just to achieve an acceptable level of repair and maintenance. Next, we will look at other areas of infrastructure where a national commitment is required to move our economy off its dependence on fossil fuels, or in which the Civil Engineers’ were simply unable to account for future needs.
| Drinking Water (EPA) | $300.0 |
| Freight Rail | $200.0 |
| Urban Rail Transit | $3,195.0 |
| Hi Speed Passenger Rail | $450.0 |
| Wind Energy | $350.0 |
| Electricity Transmission Grid | $66.0 |
| Energy Efficiency of Buildings | $125.0 |
| Ports | unknown |
| Infrastructure Security | unknown |
| Communications | unknown |
| Total | $4,686.0 |
Urban Rail Transit
$3.195 trillion is my own estimate, which is fully explained in a diary I wrote last year. Basically, this is for building rail mass transit in the 38 largest urban areas in the U.S. to the same density of route miles and stations as is found in New York City. My estimate is only for costs of actual construction, and does not include equipment such as train sets, and communications and signaling systems.
Robert Pollin, co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts, wrote in his January 2009 article in The Nation, Doing the Recovery Right
Public transportation accounts for an abysmally low share of travel in the United States, even though ridership rose over the past two years, following the oil price spike. As of 2007, automobile travel accounted for 99 percent of transportation spending even for the least well-off 20 percent of households, despite the fact that public transportation is about 60 percent cheaper per mile. The reasons most Americans, including those with less money, do not use public transportation are straightforward: access is bad, off-peak service is limited and transferring is difficult. If the average lower-income household were to increase its public transportation use to just 25 percent of its transportation budget, it would save nearly $500 a year, raising its living standard about 2.4 percent.
Hi Speed Passenger Rail
According to blogs by Bruce McF I reviewed, $250 billion would build a national network supporting 79 mph rail traffic. That is miserable performance, compared to what Europe, Japan, and China have already achieved. To support 110 mph rail in the United States is going to require $450 billion.
Wind Energy
In May 2008, the Department of Energy released a report, 20 Percent Wind Energy by 2030, which is one of the best, industrially detailed economic reports any government agfency has put out in a very long time. Approximately 100,000 turbines will be required to produce 20% of the nation’s electricity in 2030. Most of the commercial-scale turbines installed today are 2 MW in size and cost roughly $3.5 million each installed. Hence, $350 billion for 20% Wind Energy by 2030. Scaling up this program to, say, 50% by wind energy by 2020, would of course increase the funding needed accordingly.
One of the pioneers, and leading expert, of wind energy in the United States is Paul Gipe. In a presentation to Al Gore’s January, 2008 Solutions Summit, Gipe unveiled One Million Megawatts of Wind Capacity for the USA: A Target Worthy of a Great Nation.
Gipe’s website point out that Spain has already achieved wind energy providing a full one half of national electricity consumption on very windy days. A November 2009 London Times article Gipe links to notes:
High winds across Spain on Sunday meant that for over five hours, over 53 per cent of the country’s power came from wind energy. .
Most of the wind power was used immediately, 6 per cent was stored and 7.7 per cent was exported to France, Portugal and Morocco. . .
Spain began its wind power push in 1997, but five years ago critics believed it could not produce more than 14 per cent of the country’s electricity.
Wind farms have produced 17,700 megawatt-hours (mWh) of electricity so far this year, but renewable energy industry figures believe this figure could rise to 40,000mWh by 2020.
Spain’s Government invested E991 million (£890 million) in wind power in 2007. Already it has reaped a return on its investment; in 2007 it saved E1 billion on fossil fuels, according to the Spanish Environment Ministry.
Electricity Transmission Grid
The Department of Energy released a report, 20 Percent Wind Energy by 2030, found that in order to transmit electricity from the wind-rich central plain states (the Dakotas and Iowa down to Texas) to urban areas in other regions of the country, “An investment of approximately $60 billion (in undiscounted terms) in transmission between now and 2030, as suggested by the NREL analysis, amounts to an expenditure of approximately $3 billion per year over the next 22 years.” (See also the American Electric Power report.)
Energy efficiency of buildings
Robert Pollin, co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts, wrote in his January 2009 article in The Nation, Doing the Recovery Right
In terms of residential energy efficiency, for the average individual family residence, a one-time $2,500 investment in retrofitting–caulking air leaks and windows, improving insulation and buying more efficient appliances–can reduce annual energy consumption by 30 percent. This would produce an average saving in home energy costs of about $900 a year. Of course, low-income families are much more likely to be renters than homeowners.
Figure around half the housing stock, or 50 million units, being retrofitted, and you need $125 billion. This is a good figure to use by which to judge any proposed “cash for caulkers” program.
Ports
I could not find much on funding requirements for the nation’s seaports. However, a January 2009 report from the U.S. Maritime Commission notes,
Almost every one of the Nation’s top 50 ports handling foreign commerce requires regular maintenance dredging. Together, these ports move nearly 99 percent of U.S. overseas trade by weight and 61 percent by value.11 Without routine dredging, sections of the navigation channels can quickly become shallow, reducing the draft and size of vessels accessing these ports. In addition, as the size of ships continues to grow, approach and alongside depths in several key ports must be increased to as much as 45 to 50 feet. If we do nothing more than merely maintain existing channels at project depth, the Nation’s competitive edge ultimately will erode. The Nation has to do more than maintain, it must deepen channel depths to accommodate the largest vessel sizes. But meeting this challenge requires a significant investment by both the Federal government and private industry.
The Army Corps of Engineers is responsible for maintaining 300 commercial harbors and more than 600 smaller ones. Each port area is made up of a number of different channels all of which have different depths and their own set of dredging needs. For example, there are 31 different channels alone that make up the Baltimore port area, with depths ranging from 22 to 50 feet. A recent Army Corps of Engineers Study reports that almost 30 percent of vessel calls at U.S. ports are constrained due to inadequate channel depths. If ignored, America’s waterways will be unable to support future growth in trade.
Where do the job numbers come from?
The Alliance for American Manufacturing funded a team of researchers at the University of Massachusetts-Amherst’s Political Economy Research Institute (PERI), who found that every one billion dollars in new infrastructure spending produces 18,000 jobs. A February 2009 news release by the Democratic Senate Caucus, intended to promote passage of the stimulus package, cited a number of experts and studies, with a range of 27,000 to 37,000 jobs created for every one billion in transportation infrastructure; about 10,000 jobs for every one billion dollars in new energy infrastructure; and 22,500 jobs for every one billion dollars in new information technology infrastructure. For the sake of making calculations as easy as possible, I used 27,000 jobs for every one billion dollars in infrastructure spending.
The key idea here is that if we were doing what we are supposed to be doing – taking care of our infrastructure properly and building what is required for our children and their children to be safe and prosperous, we would have a massive shortage of labor in this country. The 15.7 million unemployed and the approximately 13 million underemployed would have multiple job opportunities. Bidding wars for labor would break out, rapidly driving up earnings and wages, and obliterating the income and wealth gaps in much less than a generation. Illegal immigration would become a non-problem, as the nation’s employers scrambled to find the workers they needed. The collapse of retail and income tax revenues would end, and the coffers of state and local government would be brimming with revenues, making it easy to fund and even expand social programs. In short, the country would look much, much different than it does now.
How do we pay for it?
Unfortunately, economic neo-liberalism has become such an overwhelmingly dominant ideology that many readers are dismayed at the prospect of spending $5.820 trillion on building new infrastructure. But the $1.134 trillion of needed infrastructure repairs identified in the Civil Engineers’ Report Card is for a five-year program, or $227 billion per annum. The $4.686 trillion program for new infrastructure I propose is for a ten-year program, or $467 billion per annum. The total of annual spending proposed is $694 billion, much less than the $841.2 billion stimulus program passed earlier this year (of which 34.8% went to tax cuts, which have a nearly negligible stimulative effect when compared to direct spending on infrastructure).
Not all this funding need come from government spending. However, a number of federal laws and regulations need to be changed so that the financial system no longer finds it profitable to engage in speculation, usury, and economic rent, but instead finds profitable investment opportunities in funding these new infrastructure programs. Jerome A Paris’ November 9, 2009 diary, The stimulus and green jobs, explains an excellent example of how government incentives work: in the case of wind power, production tax credits have been the key to attracting large amounts of private capital for the building of new wind turbines. When the production tax credits were allowed to lapse by Congress, the private funding stopped, and the construction of new wind energy capacity collapsed as a result.
There is, in fact, a huge amount of private capital out there, sloshing around the hot money centers of the world, desperately seeking for the highest return. In fact, the dollar equivalent of the entire annual U.S. Gross Domestic Product, about $15 trillion, is traded on the various financial markets in the U.S. – stocks, government bonds, corporate bonds, corporate paper, futures markets, and foreign exchange markets – about once every three days. (Back in the 1960s, it took almost nine months for the financial markets to trade the dollar equivalent of U.S. GDP.)
The great economic theory of the past four decades has been that this massive flow of funds would generate the greatest wealth for society if left to its own devices, with minimum interference and oversight by governments. In other words, that the rich know better how to invest society’s wealth than anyone else. The result has been the creation of a financial oligarchy, the slow collapse of the real economy under the burden of supporting the speculation, usury, and economic rent imposed by that oligarchy, and the “regulatory capture” of government by that oligarchy. In a perverse sense, the rich did know how best to invest those funds; what was not admitted was that the rich would invest almost solely for their own benefit, and not that of society at large. In other words, the great economic theory of the past four decades has been proven wrong. Not just by the financial crises that erupted with the collapse of Bear Sterns in April 2008, but more importantly by the increasing inability of the society to ensure its own survival, as evidenced by the difficulty in funding just proper maintenance of existing infrastructure, not to mention a nearly complete lack of effective response to the approaching environmental disasters of climate change caused by a dependence on burning fossil fuels.
Proper laws and regulations, such a financial markets transactions tax, most recently endorsed by economist Paul Krugman would penalize and discourage much of the speculation, usury, and economic rent, that makes up so much of financial trading today, and force investment flows back into the real economy, rebuilding and retooling factories and entire industries to supply the goods, materials, and services needed to build – and maintain – the infrastructure American needs to move into the future.
Higher taxes are simply part and parcel of this, but not merely for the reason of “make the rich pay.” The fact is that high marginal tax rates strongly correlate with economic growth. If you look under the hood of the industrial economy, you easily see why. With high taxes, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business — in plants, equipment, staff, research and development, new products and all the rest. But if tax rates are low, then there is more incentive to pull the wealth created out, by declaring it as profits that are taxed at what turns out to be too low a rate. In other words, low taxes create so strong an incentive for profit taking, it devolves into asset stripping. Essentially, the low tax rates of the past three to four decades allowed a bunch of financiers and banksters to literally asset-strip most of the U.S. industrial base, one company, one labor contract, and one pension fund at a time.
Tariffs are also needed to prevent the massive daily flow of capital moving to countries with “lower costs” resulting from inadequate workplace safety and environmental safeguards, as well as countries that maintain artificially low currencies. Part of the answer is to re-impose cross-border capital controls. After all, if we’re going to be creating a policy regime that favors investment in the building of new infrastructure over the next decade or two, why does anyone need to transfer huge flows of capitals overseas? In short, we need to return to the type of strictly managed international monetary system that characterized the post-war quarter century, before Nixon – on the advice of an Undersecretary of the Treasury named Paul Volcker – destroyed the Bretton Woods agreements by abandoning managed exchange rates for the dollar.
Of course, the political power of the financial oligarchy makes it difficult to envision actually achieving the types far-reaching financial reforms required to force financial flows back in alignment with the needs of the real economy. Does that mean that we will be forced to borrow, on the banksters’ terms, the trillions of dollars needed to build tomorrow’s infrastructure?
This is almost the same problem Abraham Lincoln faced in financing the Civil War. Confronted with the immediate need to arm, equip, feed, and transport new armies tens of times larger than the pre-war U.S. Army, Lincoln sent emissaries to the big financial centers of Boston, Philadelphia, and New York, and was disturbed to be offered loans with staggering interest rates of 24 to 36 percent. What Lincoln finally did was to direct the Treasury to issue its own notes, usable as legal tender, in direct payment to soldiers and military contractors. These Treasury notes became known as “Lincoln greenbacks,” and the banksters absolutely hated them.
The same can be done today. Say a construction company gets a $10 million contract to help build a high speed rail line. The Treasury simply issues $10 million in new notes directly to that company, to pay its workers and vendors. Since the Treasury Notes are legal tender, workers and vendors can use the Notes to buy food, clothing, pay bills, and so on.
Because these new Treasury notes issued as legal tender would be directly linked to the building of new infrastructure, there is no danger of creating hyper-inflation. The new infrastructure is new national wealth, and as long as new wealth is being created, there is no problem with an increase of new money.
This is the big secret the banksters fear you will learn – there is no need to borrow from them, ever, at all, for anything that the national government does.
Conclusion
A massive program of building new infrastructure would not be all that different from what Franklin Roosevelt and the New Deal — and the industrial mobilization for World War Two — did. Very simply, we would have to put people back to work producing real goods again. Building infrastructure requires a lot of steel, concrete, wood, fasteners, insulation, pipes, valves, gaskets, wiring, electronic controls and all types of other material, not to mention lots of construction equipment And the money to do it will come from forcing the financial system to stop gambling and arbitraging. The issue is to create and implement policies, regulations, and laws that discourage and penalize financial speculation, usury, and economic rent, thereby forcing the flow of credit back into big construction projects and the industries that support them. In other words, we need to change the rules of the game, so that nation building is the order of the day, not speculation, gambling, greed, and big bonuses.
We can create 20 million new jobs if we want to. So, I want to end with this quote again,
Some men see things as they are and say why. I dream things that never were and say why not.
-Robert F. Kennedy
Are you asking why? Or why not?
Clean Energy Jobs series posts:
- Clean Energy Jobs Fill Labs
- Clean Energy Jobs Go To The Cleaners
- Clean Energy Jobs Blow In (not Blow Up) Coal River Mountain
- Clean Energy Takes the PHE School Bus
- Clean Energy Jobs Go to the Market
- Clean Energy Jobs Go to School
- Tips for the Job Summit: Can we say Clean Energy Jobs?
- Clean Energy Jobs: Stimulate Me