Why It Is Important to Invest In Infrastructure

November 9th, 2010 by admin

President Barak Obama recently announced, to mixed reviews, a commitment to spending $50 billion on infrastructure products. The Republicans consider it waste of taxpayer money because there won’t be an instant creation of jobs and the U.S. will increase its already overloaded debt burden. Many liberal Democrats love the idea because it will create more Union jobs.

“I don’t like running up the nation’s credit anymore than anyone else, but the fact is that if you visit other countries we are competing with to attract new companies, a major part of their decision is the quality of the infrastructure. From my travels to other countries and from talking with business leaders that visit the U.S., I can tell you that education isn’t the only area in which we are falling way behind”, said Obama.

Right now, since we have so many people, especially laborers out of work, this is an excellent time to upgrade our infrastructure. That said, maybe there is a better approach, which many other countries have utilized rather than borrowing money they don’t have. In Panama, private sector companies are given the rights to build roads, bridges and do other improvement projects. These companies then charge tolls to use the roads.

You might think that is a novel approach, but the US used to do this prior to the Civil War. Governments took over because politicians wanted to create jobs that they could use to reward their supporters. We have gotten away from this and maybe its time we took a page out of our old book. It’s an approach that will be controversial similar to Pennsylvania Governor Ed Rendell wanting to privatize the Pennsylvania Turnpike, but it is probably the most cost effective and efficient solution.

Like in Panama, the opportunity to invest in a recurring revenue operation will attract investment, create jobs and save us from increasing debt. More than likely, the private sector can continue to build and/or improve the roads for less and they would be responsible for maintenance.

Posted in Panama Investment

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