Program Links
Infrastructure News
- California Switches On To An Electric Future
- Funds for infrastructure would build what U.S. needs most: jobs | Freep.com | Detroit Free Press
- Pressure Builds for Infrastructure Outlays
- Schmidt on Stimulating the Economy Through Infrastructure
- AZ 2030 Forum tackles $3.5 trillion infrastructure need - Phoenix Business Journal:
- Schwenninger and Others Discuss Infrastructure on Capitol Hill
- Momentum Might Be Building To Build Up The U.S. Infrastructure
- Push For Public-Works Projects Expected In San Diego
- Study Urges Funding For AZ Public Works
- USC Keston Institute Panel on CA Infrastructure
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American Infrastructure Initiative
In the Oct. 5 New York Times, Michael Lind explains how reviving the former U.S. postal savings system
can contribute to
infrastructure finance, while in the latest issue of Democracy, he calls for a
new American System. Heidi
Crebo-Rediker and Douglas Rediker suggest ways to channel global capital to American infrastructure
needs and to shore up our financial system by attracting sovereign wealth funds. Bernard Schwartz and Sherle Schwenninger argue that public investment works in Democracy and
Bernard Schwartz makes the case before the House Transportation and Infrastructure
Committee.
Economic growth, global
competitiveness and middle-class prosperity in America
all depend on a national infrastructure that is state-of-the-art, energy
efficient, environmentally sound and secure. The American Infrastructure
Initiative, co-sponsored by the Economic Growth Program and the Next Social Contract Program and directed by Whitehead Senior Fellow Michael Lind, provides informed
commentary about America's infrastructure needs and
analyzes specific proposals for funding and building the next American
infrastructure.
Launch of the Heartland Development Bank
Sept. 12, 2008 -- Opportunities for productive investments in energy, agriculture and manufacturing infrastructure across America's heartland have been squandered. In response to this neglect, the New America Foundation proposes the creation of a Heartland Development Bank (HDB).
The Heartland Development Bank would be funded with $10-25
billion to improve to the railways, highways, and waterways needed to
export agriculture, develop electric lines to move wind and solar energy from
the heartland to the coast, and support infrastructure to make high value added
manufacturing more competitive.
To read the HDB report, click here.
To read the initial proposal, click here.
Articles
| Article | Date |
|---|---|
| Obama and the Dawn of the Fourth Republic | November 7, 2008 |
| Mailing Our Way to Solvency | October 6, 2008 |
| Covered Bonds Can Rebuild America | July 28, 2008 |
| Sustaining an Infrastructure for Success | October 17, 2007 |
| Public Investment Works | September 30, 2007 |
| Left and Right Must Join to Fix Infrastructure | August 28, 2007 |
Policy Papers
| Title | Date |
|---|---|
| An Economic Recovery Program for the Post-Bubble Economy | July 2008 |
| Redressing America's Public Infrastructure Deficit | June 2008 |
| Financing America’s Infrastructure | June 2008 |
| Back to Basics: A Pro-Growth Public Investment Strategy | November 2007 |
Press
| Headline | Date |
|---|---|
| Joel Kotkin in Grand Forks Herald | 'Eide Motors Renovating its Showroom' | October 4, 2008 |
| Financing America’s Infrastructure | June 9, 2008 |
Mailing Our Way to Solvency
by Michael Lind
New York Times
October 6, 2007
AMERICA'S financial landscape is changing before our eyes. The
absorption of major Wall Street investment banks by commercial banks
threatens to create colossal universal banks that are too big to fail
and might need to be bailed out in the future. Meanwhile, the structure
of public and private finance in the United States chronically fails to
address four problems: the almost 10 percent of Americans without a
bank account; the concerns of all Americans about the security of their
savings; the growing indebtedness of the country to foreign governments
and financial institutions; and underinvestment in public assets like
sewer systems and bridges.
These four problems may seem unrelated. But they can be addressed in the United States, as they have been in similar countries, by a single institution that is at once new and old: the postal savings bank.
Britain created the first postal savings bank in 1861, and by the early 20th century many other nations had postal savings bank systems. The details vary among countries, but the idea is simple: use the one government institution that can be found in most neighborhoods and rural areas - the post office - to encourage small savings and a habit of thrift.
Well, we don't do things that way in America, you might object. On the contrary - we did! In 1910, Congress created a postal savings system. The Post Office offered small savings accounts to individual Americans. The system boomed during the Depression and World War II, with a balance of more than $3 billion in 1947 - almost $30 billion in today's dollars.
But F.D.I.C. insurance of private bank accounts removed the advantage of security from the postal savings system, and its fixed 2 percent interest rate was uncompetitive. By 1966, deposits had fallen to $344 million (still more than $2 billion when adjusted for inflation) and Congress voted to abolish the system.
A new postal savings system should be part of America's post-meltdown financial architecture. When Congress created the postal savings system nearly a century ago, one of its goals was to encourage savings among the large number of low-income immigrants. A new system would help today's immigrants as well as the native poor. Banks are not interested in people with so little money, many of whom are preyed upon by payday lenders and credit card companies.
A postal bank could also supply middle-class and affluent Americans with an extra layer of financial security. The accounts would be limited to a small amount per person. They would provide a government-guaranteed, low-risk, low-return investment, even for those who put most of their financial assets in conventional bank accounts and the stock market.
Non-Western countries like Japan and India have used postal savings systems to reduce their economic dependence on foreign investors. What better way to reduce the dependence of the United States on Asian banks and petrostate sovereign wealth funds than a system that pools the modest savings of ordinary Americans to pay down the national debt?
A revived postal savings bank, in addition to holding much of the national debt, could provide a purely domestic source of savings that could be tapped by a national infrastructure bank. There is growing support for such a government-chartered institution, which could borrow money to modernize roads, power grids and sewage systems; according to one estimate, we need $1.6 trillion over five years. That money is unlikely to come from Congress.
Japan's postal savings bank, privatized during the heyday of market fundamentalism a few years ago, was criticized because it encouraged too much saving and too much investment in infrastructure. If only the United States had such problems!
When the financial crisis has passed, Americans will need to rebuild our financial system. A new postal savings system should be part of the plan.
Michael Lind is a fellow at the New America Foundation, where he directs the American Infrastructure Initiative.
