NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's uplifting perspective on world, national, and local politics.

Wednesday, July 27th, 2022

There’s a better way to fight inflation, save jobs, and curb a recession: Create a Hamiltonian National Infrastructure Bank

Edi­tor’s Note: We are pleased to wel­come Alphec­ca Mut­tardy to the Cas­ca­dia Advo­cate to dis­cuss the need for leg­is­la­tion that could strength­en our econ­o­my and reduce our infra­struc­ture deficit: H.R. 3339. Alphec­ca is a macro-econ­o­mist on the Advi­so­ry Board of the Coali­tion for a Nation­al Infra­struc­ture Bank. 

For the past six­ty years, when our gov­ern­ment fought infla­tion, it did so by cut­ting the mon­ey sup­ply and rais­ing inter­est rates, which almost always brought on a reces­sion and loss of jobs. Then, the fed­er­al gov­ern­ment spent more than it earned to bring those jobs back, which raised the nation­al debt. 

Today, our debt stands at $30.6 tril­lion, and the capac­i­ty to extend it fur­ther is exhaust­ed. A recent Con­gres­sion­al Bud­get Office (CBO) fore­cast sug­gests that inter­est pay­ments on the debt will explode over the next ten years – the result of ris­ing inter­est rates. Mean­while, the White House and Democ­rats in Con­gress are try­ing to fig­ure out what kind of fis­cal response the mer­cu­r­ial Sen­a­tor Joe Manchin of West Vir­ginia will agree to vote for. 

We need to replace this proven cycle of failed poli­cies with a proven set of work­able ones. That’s where a prop­er­ly con­struct­ed pub­lic bank comes in.

Leg­is­la­tion cur­rent­ly pend­ing in Con­gress (HR 3339) pro­pos­es to cre­ate a $5 tril­lion Nation­al Infra­struc­ture Bank (NIB) to finance infra­struc­ture projects all across Amer­i­ca. It would be a sep­a­rate insti­tu­tion, set up as a gov­ern­ment-owned lend­ing bank, and cap­i­tal­ized with exist­ing Trea­suries held by the pub­lic sector.

That’s the same mod­el that was used suc­cess­ful­ly four times before in our nation’s past, start­ing with the First Bank of the Unit­ed States, cre­at­ed by Trea­sury Sec­re­tary Alexan­der Hamil­ton, and end­ing with Pres­i­dent Franklin Delano Roo­sevelt’s Recon­struc­tion Finance Cor­po­ra­tion (RFC). 

Except for a very small appro­pri­a­tion from Con­gress to open its doors, the pro­posed NIB will pay its own way. It will not require new fed­er­al out­lays or debt. 

In fact, NIB oper­a­tions will gen­er­ate rev­enue for fed­er­al, state, and local gov­ern­ments by expand­ing the econ­o­my. NIB will also address the eco­nom­ic prob­lems we’re see­ing in the Unit­ed States today by: 

  • Cat­alyz­ing the cre­ation of mil­lions of new, great-pay­ing jobs to raise short- and long-term eco­nom­ic growth
  • Pro­vid­ing financ­ing to deal with the back­log of infra­struc­ture projects that are still unfund­ed, like local roads and bridges, water infra­struc­ture, the elec­tric grid, high speed rail, afford­able hous­ing, broad­band, and more
  • Pro­mot­ing a resur­gence of Amer­i­can manufacturing;
  • Com­bat­ing infla­tion by increas­ing eco­nom­ic pro­duc­tion and mak­ing our econ­o­my more effi­cient (imag­ine trans­porta­tion bot­tle­necks reduced or elim­i­nat­ed, bet­ter con­nec­tiv­i­ty in rur­al areas, few­er “sup­ply chain” prob­lems, greater sup­ply and low­er prices thanks to added manufacturing).

This leg­is­la­tion makes use of a proven mod­el that has served our coun­try well in the past. A nation­wide grass­roots coali­tion has come togeth­er to urge Con­gress and Pres­i­dent Biden to get this done. Our coun­try needs to adopt and pass H.R. 3339 to cre­ate a Hamil­ton­ian Nation­al Infra­struc­ture Bank. For more infor­ma­tion on the NIB, and how you can help, check out the coali­tion’s web­site

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