What kind of fraud was President Obama’s ARRA — the “Stimulus Act of 2009” — which was supposed to be focused on helping states and cities recover employment and construction? Infrastructure spending by states and cities in the United States, usually reported as part of “municipal public construction,” has been completely stagnant for 10 years, according to Commerce Department data reported by the Wall Street Journal Oct. 27. And, in fact, it is actually lower now than in 2009 before the ARRA took effect.
The problem there, the newspaper reported, is state and city tax revenues, which have never recovered from the 2008 crash. Inflation-adjusted tax revenues are lower than pre-2008 in 21 states. Nationally, municipal revenues are still falling, standing 0.6% lower than 2015 through the first nine months of the year.
But at the Federal level, construction spending is also falling. In September it was 0.2% below September 2015; public construction, which has been steadily falling, dropped by another 0.9% in September.
What we require for the new water, power, and transport infrastructure the states need, is a Hamiltonian national bank; it can purchase the new infrastructure bonds of the states as they participate in national infrastructure projects like high-speed rail corridors being funded by Hamiltonian national credit.
The “infrastructure bank” proposals of candidates Trump and Clinton do not meet this standard. Clinton’s (actually designed by Sen. Chuck Schumer of New York) simply gives companies which are holding their funds “offshore” to avoid taxes, a huge tax break to bring them back. The very low-ball taxation of these repatriated funds would be used, in this scheme, to fund infrastructure — completely dependent on the companies’ decisions on how much money to repatriate, and when. Trump’s “national infrastructure bank” would not be national at all, but entirely privately capitalized (also with tax breaks) and owned.
Obama’s scattershot and scatterbrained “Stimulus Act” degraded the very process of thinking about the projects most important for the future of the economy, nation, and human race.
A Hamiltonian national credit bank, as called for in Lyndon LaRouche’s “four economic laws to save the nation,” requires national leadership direction of credit into the most technologically advanced “infrastructure missions.”