The Banker-in-Chief Wants His Own Bank

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The Republicans aren’t serious about “investments,” so say the Democrats. Democrats want “invest and grow” while Republicans want “cut and grow.” Unfortunately, “investments” is the new term for taking more of the taxpayers’ money and using it for what the government believes is worthwhile.

Since “infrastructure” is vital and something most Americans want to see kept up to standard, it is a convenient new crisis. In order to deal with what President Obama sees as a decaying infrastructure, he has been calling for a government bank to finance infrastructure. President Obama wants to call it the “I-Bank.” I hope Steve Jobs is okay with this.

This past March, a proposal for just such a bank was made by Senator John Kerry and it had some bipartisan support from people like Kay Bailey Hutchinson. It is a good idea but it is fraught with danger.

This “bank” would exist to finance the construction of things like roads, bridges, water systems, power grids, and other water and energy projects – which could end up being most anything. The bank would be run by the DOT (Department of Transportation) and would provide loans and loan guarantees for projects of local or national significance. The hope is to attract private sector investment. The start up cash of $10 billion is to increase to $640 billion of infrastructure spending over the next decade. These details came from a NY Times article I read last March.

The first and most serious problem is that the bank takes more power from Congress and passes it to the Executive Branch in yet another power grab. The bank would not be answerable to Congress. Worse yet, we’ll have another bureaucracy to grow our new socialism for America movement.

This bank gives grants and loans which merely funnel taxpayer money from one source to another – there is no “banking” in the sense of loans being paid back. Nothing will be paid back.

The private sector involvement could end up being more corporate welfare.

I’m also concerned about the possible loss of control by state governments in all this.

In the end, it’s another form of deficit spending. “Investments,” is the new buzzword for “spending” and the corresponding “tax hikes” by a government that has not grown jobs despite the expenditure of billions in TARP and Stimulus money.

Since the government has been so successful with the post office, why not a bank? And since we used the Social Security funds so well, why would anyone doubt these funds will go for infrastructure? In fact, wasn’t the Stimulus a lot about infrastructure, but we weren’t shovel-ready? Does anyone really believe the money won’t go into another government black hole?

 

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