Don't Give Up on Capitalism, Fix It

What about spending on infrastructure? Can't only the government do that? Doesn't that create a lot of good jobs and necessary public improvements? Yes. Of course it does those things. Although it isn't really true that you need government to have infrastructure projects. Many large projects a re privately financed.

Regardless, government does have a role in this area, but it should be done at the state and local level. The federal government has no business dictating to states and municipalities what infrastructure is or is not needed. Federal money should be made available to the states, which should make a portion of that money available to cities.

Federal infrastructure projects too often become ridiculous "pork barrel" boondoggles, such as the famous "bridge to nowhere." In general, more government spending even beyond infrastructure should be done at the state and local level because states and cities know what they actually need better than politicians and bureaucrats in Washington.

The best way to raise more money for infrastructure is not higher taxes. It is by selling more bonds at the state and local levels. Can we really afford to keep borrowing? Look at interest rates. They are extremely low by historical standards. Why shouldn't we take advantage of that situation to finance projects that will create jobs and make public improvements that will benefit the whole society? Last week was the best week ever for municipal bonds.

With investors fearing stocks and real estate, with cash and Treasuries paying very low yields, it only makes sense that investors would flock to higher yields that are tax exempt.

Municipalities should take advantage of this to move forward with infrastructure projects as well increases in public services. The federal government can help by offering to guarantee municipal bond issues for a certain period of years until we start to come out of this very challenging economic environment.