Signed in as:
filler@godaddy.com
National Infrastructure Bank (NIB)
What is a National Infrastructure Bank?
The National Infrastructure Bank (NIB) is exactly what it says. It is a bank who uses investors' money solely for the purpose of financing infrastructure projects, which have been carefully screened and continuously monitored for their development, implementation, and management.
Why a National Infrastructure Bank?
In recent years, the USA has experienced multiple banking scandals from the 2008 sub-prime mortgage scandal which created many economic stresses, losses for investors, and the closure and consolidation of banks. Likewise with the 2020 COVID-19 pandemic, the U.S. government was compelled to flood the economy with investments and money to it's citizens to support them and the economy from further damages.
There are many examples of how the banks poorly managed these disbursements, and fraud was rampant. It is estimated one such program the Payment Protection Plan had a huge amount of fraud.
The theft of as much as $80 billion — or about 10 percent — of the $800 billion handed out in a Covid relief plan known as the Paycheck Protection Program, or PPP. That’s on top of the $90 billion to $400 billion believed to have been stolen from the $900 billion Covid unemployment relief program — at least half taken by international fraudsters — as NBC News reported last year. And another $80 billion potentially pilfered from a separate Covid disaster relief program.
Add to all of this how it has been shown, and more under DOJ investigation that some banks even engage in the practice of laundering foreign money, notably Russian. This was revealed in the Panama Papers and again after Putin invaded Ukraine on February 24, 2022 and the DOJ (Deputy AG Lisa O. Monaco & President Biden) formed a DOJ task force to seize Russian assets, enforce the economic sanctions against Russia and those who support them, and to investigate and seize all Russian bank accounts, with emphasis to Russian money-laundering. Some banks are now in a situation they may be described as "Putin's nervous comrades".
Given infrastructure projects, notably those domestic to the USA are often national security matters, history has consistently shown and it is abundantly clear the commercial and community banks cannot be trusted to wisely invest, manage, or monitor infrastructure projects.
When adding the fraud and the mismanagement potentials to the existing needs, which are not completely satisfied by the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), signed by President Biden on March 24, 2022, then add the CBO scored the IIJA with a deficit of $256B over 10 years, the creation of a National Infrastructure Bank is a critical necessity, as is the GRIP Plan approach. Also consider that the IIJA only covers about ten percent (10%) of our national infrastructure needs. Therefore a new entity and pool of funds/financing is an imperative.
Have we ever had a National Infrastructure Bank before?
Yes, There were four (4) previous National Infrastructure Banks, the last one was during the FDR Administration. Each of the four (4) NIB in the history of the USA led to periods of prosperity and growth for the years they existed and also for decades after they were disolved. You can learn more about this at https://www.nibcoalition.com and consider https://www.congress.gov/bill/117th-congress/house-bill/3339 but here are some basics.
George Washington's Infrastructure Bank
George Washington’s signing of the bill establishing the Bank of the United States. This action was crucial to establishing a government-backed source of national credit and a uniform currency in the United States, and setting the example of how to turn otherwise crushing debt into credit for building the country.
The draft bill for a National Infrastructure Bank which is posted on this blog follows Hamilton’s example, and would be a crucial step in creating a vibrant U.S. national economy once again. President Washington’s decision to sign the Bank bill was not a foregone conclusion.
He had solicited the opinions of his Attorney General Edmund Randolph and Secretary of State Thomas Jefferson about the bill, which was already controversial. Jefferson was vehement in his opposition. While he put forward “constitutional” arguments about there being no explicit provision for establishing a Bank in the Constitution, his actual reasons had more to do with his commitment to preventing industrialization, and to saving the plantation system.
According to authors Stephen F. Knott and Tony Williams in their book Washington and Hamilton: The Alliance That Forged America, Jefferson went so far as to propose, in a letter to James Madison in October 1792, that all Virginians who collaborated with the Bank of the United States should be executed! Shades of the French Revolution. Fortunately, President Washington commissioned Alexander Hamilton to answer Jefferson and Randolph. The result was the tour de force called the Opinion on the Constitutionality of an Act to Establish a Bank, one of the four most important papers which Hamilton ever wrote.
The opinion is well known as the leading argument for “implied powers” in the Constitution; in fact, it is a well-reasoned exposition on the content of national sovereignty. It reached Washington just in time for him to sign the bill into law. One of my favorite quotes from this document sets forward its broad view of the responsibility of the Federal government, as opposed to Jefferson’s view of “necessity:”
This restrictive interpretation of the word necessary is also contrary to this sound maxim of construction namely, that the powers contained in a constitution of government, especially those which concern the general administration of the affairs of a country, its finances, trade, defence & ought to be construed liberally, in advancement of the public good. [emphasis added] This Hamiltonian view stood behind the actions of both President Lincoln and President Franklin Roosevelt, who saw the absolute necessity to use Federal powers aggressively for the public good. It is a view that we would do well to resurrect today, along with a National Bank.
John Quincy Adams Infrastructure Bank
Pesident John Quincy Adams wholeheartedly supported the role of the federal government in the sponsorship of projects and institutions designed to improve the conditions of society. He had no constitutional doubts about the authority of the President and Congress to construct a system of internal improvements, ranging from roads and canals to harbors, bridges, and other public works. In this, he supported the "American System" first proposed by Henry Clay while Clay was Speaker of the House. The general plan rested upon the notion of a self-sufficient, but regionally specialized, national economy.
Both Adams and Clay believed that a factory-based northern economy would provide markets for southern cotton and western foodstuffs. In exchange, the South and West would purchase northern manufactured goods. Alexander Hamilton had proposed a similar idea in the 1790s, only to be blocked by southern opponents who believed that such a national economic network of interdependent parts would enhance the power of the federal government.
In his first annual message to Congress, President Adams presented an ambitious program for the creation of a national market that included roads, canals, a national university, a national astronomical observatory, and other initiatives. Many congressmen, even his supporters, had trouble with his proposals. His critics challenged the supposed arrogance of a President who had been narrowly elected by the House. In their minds, Adams was not entitled to act as though he had received a national mandate for action.
They mockingly criticized his observatories as Adams's "lighthouses of the skies." Others pointed out that the President's internal improvements would benefit some parts of the nation more than others and bring the federal government into regional affairs. Nevertheless, through the use of military engineers for survey and construction operations, public land grants, and governmental subscription to corporate stock issues, the administration achieved considerable progress in support of harbor improvement and road and canal development.
Some of the specific projects included extending the Cumberland Road into Ohio with surveys for its continuation west to St. Louis, beginning the Chesapeake and Ohio Canal, constructing the Delaware and Chesapeake Canal and the Portland to Louisville Canal around the falls of the Ohio, connecting the Great Lakes to the Ohio River system in Ohio and Indiana, and enlarging and rebuilding the Dismal Swamp Canal in North Carolina.
The Tariff of Abominations Henry Clay's ardor in support of protective tariffs was well known, but there was considerable uncertainty regarding Adams's views. His New England constituency was divided between long-standing concern for promotion of foreign commerce and newly developing interest in protection of domestic industry. A further complication was the fact that administration supporters had lost control of Congress in the election of 1826.
Senator Martin Van Buren had supported William H. Crawford for the presidency in 1824, opposed Adams's election, and remained hostile to the administration throughout Adams's tenure. Recognizing the divisions that marked the Adams administration's position on the tariff, Van Buren led a campaign designed to set high tariffs to protect mid-Atlantic and western agricultural interests—levies on raw wool, flax, molasses, hemp, and distilled spirits.
In the end, Congress forced Adams to accept a stricter tariff than he would have preferred by refusing to consider more moderate proposals. Adams had to choose between a stringently protective tariff or no tariff at all, and Adams accepted the former.
The Tariff of 1828 had new rates that were particularly restrictive of textile imports and damaging to a market of British manufacturers upon whom southern planters were dependent. One southern legislature after another denounced the tariff as unconstitutional, unjust, and oppressive, and the Virginia legislature called it the "Tariff of Abominations." (See Jackson biography, Domestic Affairs section, for a more detailed discussion of this tariff, which required implementation after Adams left office.) Vice President Calhoun's opposition was so strong, he condemned the tariff and drafted the South Carolina Exposition, asserting the right of a state to nullify federal laws that were obviously harmful to state interests.
The Lincoln Infrastructure Bank
President Lincoln needed an National Infrastructure Bank for two (2) primary reasons. The first was to finance the civil war and bolstering manufacturing, and the second reason was to have the resources necessary to rebuild the South, after the Civl War, during the Reconstruction Period. However, Lincoln advocated a National Infrastructure Bank long before becoming president and he had it as part of his political platform.
By promoting a national education infrastructure in the Morrill Act, Lincoln was creating the world’s greatest research network through land-grant colleges. The Pacific Railway bills financed the Transcontinental Railroad.
The National Banking Act created the greenback, a currency backed by Congress. He even instituted an income tax that grew the economy of the states that didn’t secede. He did all of this during the height of the Civil War. Our 16th President was perhaps one of the first Keynesian presidents long before the famous 20th Century economist John Maynard Keynes advocated in the 1930s that government pump money into the economy through public works projects. Lincoln’s Whig-Republican passion for “internal” improvements started in the 1830s, when he first ran for Illinois General Assemblyman. He supported building canals, a national bank and what became the country’s longest railroad in his day – the Illinois Central.
By promoting a national education infrastructure in the Morrill Act, Lincoln was creating the world’s greatest research network through land-grant colleges. The Pacific Railway bills financed the Transcontinental Railroad. The National Banking Act created the greenback, a currency backed by Congress. He even instituted an income tax that grew the economy of the states that didn’t secede. He did all of this during the height of the Civil War.
Our 16th President was perhaps one of the first Keynesian presidents long before the famous 20th Century economist John Maynard Keynes advocated in the 1930s that government pump money into the economy through public works projects. Lincoln’s Whig-Republican passion for “internal” improvements started in the 1830s, when he first ran for Illinois General Assemblyman. He supported building canals, a national bank and what became the country’s longest railroad in his day – the Illinois Central.
FDR Infrastructure Bank
Franklin Delano Roosevelt is probably the best known of the four National Infrastructure Banks. It generally has been called and known as the New Deal. FDR relied heavily on public works proposals and economic investment model proposed by economist John Maynard Keynes. There is so much literature about FDR's "New Deal" and infrastructure bank, that we need not give greater details here, as these are easily and abundantly available online through simple Google searches.
In the New Deal were various programs such as the WPA, TVA, and the CCC. All of these programs enhance and expanded our infrastructure. Notably the electricity grid, water supply, flood control, roads, bridges, and other similar public works.
Although he didn't quite follow FDR's New Deal, President Dwight D. Eisenhower borrowed heavily from FDR and the three (3) previous presidents' National Infrastructure Bank and economic plans with his June, 1956 Federal-Aid Highways Act, where the federal government would invest 90% in the construction of our national highways system.