Fareed Zakaria recently joined a growing group supporting a National Infrastructure Bank. His piece, though, moves the ball forward. Zakaria begins to make the case for Republican and Tea Party support. Let's flesh it out a bit.
Zakaria makes two main arguments:
- An American Infrastructure Bank would make decisions based upon project merits rather than upon formulas or earmarks
- Today, the US infrastructure market is dominated by the government, and an infrastructure bank would introduce greater private participation
I'd like to make five additional points:
- Rather than give projects grants or gifts, an IBank would provide loans and loan guarantees with the expectation of getting repaid
State and local governments, and the private sector would be responsible for spearheading projects, rather than marching to the federal government's orders. The IBank would simply lend a hand
Projects would have to generate a revenue to repay their investors, so they have to provide users with a valued service. If projects don't provide this incentive, then they are simply poorly structured.
An IBank that creates incentives to do water, transportation and clean energy projects -- like the bipartisan American Infrastructure Financing Authority proposed by Senators Kerry, Hutchison, Graham and Warner -- would benefit industrial real estate developers by helping businesses who want to build factories put together packages with private co-investors to make sure that they have enough water, transportation and energy for surge manufacturing
Businesses and labor unions would have incentives to work together to build things cooperatively -- which is why Tom Donohue of the US Chamber of Commerce and Richard Trumka of the AFL-CIO support it.
Now we just have to convince Progressives.