On a National Infrastructural Bank

On September 21, 2011 the National Committee of the Social Democrats
USA passed the following resolution “On a National Infrastructural Bank”

 

On a National Infrastructural Bank

Whereas in spite of the fact that the economic prosperity and sustainability
of the United States is endangered by its long term deficit problem, the current
economic crisis of ongoing joblessness, low levels of economic growth, and high
budget deficits at the federal and state and local levels is caused by an
ongoing lack of consumer demand caused by high levels of consumer debt and
unemployment.

Whereas this lack of consumer demand in the foreseeable future will continue
to reduce US economic growth and increase national levels of joblessness and
deficits.

Whereas the United States has since 1970 been under-investing by as much as
1% of its annual GDP in needed infrastructure in roads, mass transit, water and
sewage treatment plants, and other forms of national infrastructure.

Whereas at this time the infrastructural quality of the United States has
been ranked as a “D” according the the American Society of Civil Engineers.

Whereas The United States now has an infrastructural deficit of $2 trillion
dollars according to the same American Society of Civil Engineers and this
deficit will have to be made up if the United States is to continue to be an
economical advanced world power and stay competitive to Russia, China and other
developing societies.

Be it resolved that the Social Democrat USA will support the most effective
proposals for a National Infrastructural Bank particularly as presented by such
advocates as Felix Rohatyn, Bernard Schwartz and organizations such as the Third
Way. The Social Democrats USA sees the development of an effective and
politically independent National Infrastructure Bank as being at the center of
the solution to the nation’s current crisis of low economic growth, high rates
of joblessness, and deficits at both federal and state levels and of course this
nation’s currently weakened infrastructure. The National Investment Bank would
have the following powers, purposes and aspects to achieve its goals.

1) The purpose of the National Infrastructure Bank will be to invest in areas
of the nation’s infrastructure i.e. in roads, mass transit, water and waste
treatment plans, and other vital areas of national infrastructure. Such
investments will not replace private, state, and local investment in these areas
but they on the contrary will stimulate and encourage the investment of
governmental and private capital in these projects. According to Bernard
Schwartz an internationally important investment banker and a leader of the
Third Way, a centrist think tank, such investments by a National Investment Bank
should be able to leverage 5 to 6 times its investments in private and other
capital. Thus an investment by the NIB of $100 million should be able to
leverage perhaps $500 or $600 million dollars in private capital.

2) The investments to be made by the National Infrastructure Bank will be
financially sound. All investments will be expected to yield an adequate return
on the capital invested in interest or other incomes. The bank will operate on a
sound economic basis.

3) The National Investment Bank will prioritize its investments based on
criteria such as job creation, economic benefit to nation, region or state,
national energy Independence, environmental sustainability, and other socially
important criteria.

4) The National Investment Bank would be a stand alone organization. The
members of its executive board would be appointed by the President of the United
States and approved by the US Senate.This board would have full authority over
the policies and activities of the Bank subject to presidential and
congressional oversight.

Summery: While the issue of whether President Obama can afford politically to
invest his political capital in the push for a strong National Investment Bank
can be debated, what can not be denied is that citizens groups and organizations
committed to social justice for the people of this nation need to push for the
programs that will support the prosperity of this nation and justice for its
people. That is what a National Infrastructure Bank will do. That is the reason
the Social Democrats USA supports a National Infrastructure Bank.

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