Infrastructure 'Bank' Catches Washington's Imagination
Spending to date "has been more aligned with pork and politics" than with national priorities such as "economic growth, environmental health--whatever it is you want to do," Puentes says.
Bill Gross, co-CIO of bond giant Pimco, believes government spending on infrastructure is an important ingredient to an economic recovery.
"You've got to create a demand for labor," Gross told the The New York Times . "The private sector is not going to do it." Even if the government must do it directly, he said, "Putting a shovel in the hands of somebody can be productive."
And Brookings' Puentes believes initial spending by the U.S. government would attract foreign capital."The private sector has capital to spend--whether its sovereign wealth funds or pension funds or private investors, equity investors--whatever it is, that money is out there, we know, but there really isn't a good home for it here in the U.S. so a lot of its going elsewhere. Some kind of national infrastructure bank would help provide a place for those funds and then connect it to the infrastructure projects that are out there," Puentes says. Even Rep. Ron Paul (R., Tex.), godfather of the cost-cut-obsessed Tea Party, acknowledges the need to spend more on infrastructure--even if it means cutting almost everything else. "Before any subsidies or welfare payments are paid out, before social security is handed out to illegal immigrants, or health care is given to everyone, before bridges to nowhere are built at home, or entire countries bombed and rebuilt abroad, before any other myriad of exotic government projects are even considered, infrastructure should be attended to and taken seriously," Paul said in a speech on the House floor. Paul spokesman Jesse Benton says Paul believes some government spending on infrastructure is necessary to pick up the slack for a time, though "ultimately it should be more of a free market approach." The government money would come from "not expanding universal healthcare and by cutting back what we're doing overseas," in terms of fighting foreign wars. Whether infrastructure is more important than health care is a matter for debate. Let's hope we are capable of providing ourselves with both. -- Written by Dan Freed in New York.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV