Tuesday, April 08, 2008

Congress in Search of Another Creative Scheme to Borrow Money

Freshman U.S. Representative John Yarmuth (D-Kentucky) has proposed the creation of a new "federal bank" in order to "leverage money" from private sources for the purpose of financing road projects. In a report in the Louisville Courier Journal, Rep. Yarmuth states:

We have the potential to make a historic investment in the long-term economic growth of this country by establishing a federal bank to accelerate billions of dollars in long-overdue infrastructure projects.

The report describes other Democratic leaders, including House Speaker Nancy Pelosi, as favoring this type of project. However, once one sorts through the rhetoric, this is nothing more than a needlessly complicated scheme for borrowing money to build roads, bridges, and whatever else Congress decides to rename "infrastructure."

The collapse of an interstate bridge in Minneapolis last year highlighted the need for prioritizing federal highway maintenance. However, the term "prioritizing" implies a weighing of choices in order to make difficult choices. Absent any evidence of such a process, Congress, which lards "transportation bills" with all sorts of local projects that have little to do with national transportation needs, should not be given a new revenue stream with which to increase the national debt.

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