The (Infrastructure) Bank That "Abandons the Bought Congress"
Dylan Ratigan, formerly host of CNBC’s Fast Money and now host of MSNBC’s The Dylan Ratigan Show, created quite the spectacle yesterday… freaking out in a surreal, but sublime, fashion about the failures of the president and Congress. In a tirade where he refers to “10s of billions of dollars being extracted from the USA… an integrated entire system, financial system, trading system, taxing system… created by both parties over a period of two decades at work on the entire country.”
In the unlikely event that you missed the video, you can witness his fury in all its glory in the clip below.
Now, in the video, Ratigan recommends the president give a speech to “abandon the bought Congress,” and then begin the process of investing in solving the problem. How? He suggests that the US “begin an infrastructure bank with 2 percent lending.”
It sounds like an interesting kernel of an idea, so we dug around a bit to for a deeper explanation of what Ratigan may have been specifically proposing.
Here’s the concept, in more detail from Bloomberg:
“Creating a national infrastructure bank presents a harmonized solution to these two problems [US unemployment and failing infrastructure] that should be feasible even in austere times. Airports and transportation networks, levees and dams, water and energy systems are deteriorating. The American Society of Civil Engineers estimates that 25 percent of our bridges are deficient, 7 billion gallons of clean water are wasted each day because of leaking pipes, and a third of our major roads are in poor or mediocre condition. The costs of all this to U.S. businesses — in delays, accidents, lost productivity, red tape — are enormous.
“Yet improving such facilities adequately, the ASCE estimates, would require a five-year investment of $2.2 trillion. If you’ve been within shouting distance of Washington lately, you know that finding anything near such a sum is an impossibility. So a revitalization program that doesn’t rely entirely on federal munificence is crucial.
“Enter the infrastructure bank, which would provide loans or loan guarantees for big projects deemed to be in the public interest — and attract private investment by offering cheap access to capital and a path to profit from tolls, fares and other charges.
The bank could leverage the government’s outlay to lend more. An initial $5 billion a year for five years could result in $50 billion or more in loans. And because these loans would be paid back with interest, the institution could become self-sustaining […] Every dollar spent on public infrastructure yields a $1.59 boost to gross domestic product, estimates Mark Zandi of Moody’s Analytics.”
According to Bloomberg editors, a number of suggestions for how the bank could be set up are already circulating through the halls of Congress. With current US infrastructure failings costing an estimated $2 trillion over a recent two-year period, you can understand the plan’s appeal. For more details see Bloomberg’s article on how a bank can get more Americans bank on the job and on the road.