Unemployment levels are unacceptably high.  In these statistics there are millions of personal tragedies, foreclosures, divorces, etc.  This problem, like so many others, is the result of failed public policy.  In this case the policies included the pursuit of “Free Trade,” over extended credit, and the deregulation of the banking and financial services industry, all policies from which the wealthy benefited while the middle class paid.

The extent to which government should be involved in mitigating this problem should be limited to direct employment of companies and individuals in rebuilding infrastructure and providing direct services to taxpayers.  The use of public money in this way will be effective and have lasting value.

But most of the proposals being advanced, by our corporate sponsored Congress, involve tax cuts.  These proposals assert that tax breaks given to business will encourage them to hire new employees.  My 13 years experience, as owner and CEO of a company manufacturing capital equipment, informs me that the only thing that encourages a business to hire employees is demand for its product or service.  Trying to create jobs with incentives to business is like trying to push a string.  Demand pulling the string is the only thing that gets things moving.

I propose rebuilding our collapsing infrastructure and constructing new infrastructure because it offers the most effective approach to job creation and economic activity, for the following reasons:

1. It employs people (engineers and their support personnel, construction trades-people, employees of heavy equipment and construction materials manufacturers, truckers, etc.) quickly and for and extended period.
2. It creates something of value (better roads, safe bridges, good water, more functional ports and airports, etc.) to both business and individual taxpayers.  There is a long term, positive effect of these assets in their support of additional growth and the more efficient use of resources.
3. The money will be largely spent within our economy, maximizing the “multiplier” effect, because most all of what’s being purchased is manufactured domestically.

The important question is where do we get the money, since we are already broke?  The old answer has been to borrow it, but each man, women and child in the United States now owes $40,990 for our National debt (above everyone’s personal debt), and pretty soon foreign investors will stop lending us money.  The right answer is to take it from expenditures on other items.  55% of our budget (non entitlement, non debt), nearly $800 billion in the coming year, will be spent on the military.  This amount is more than all the rest of the countries in the world combined.  Does that seem reasonable?  Most people don’t realize that we are now operating over 800 military bases, outside the U.S., around the world, many created during the cold war. Expenditures to staff and maintain these bases, and the “nation-building” projects in which we are engaged, benefit the economies of the “host” countries, but do nothing for ours.  We would not diminish our national security if we diverted 25% of that budget (about $200 billion) to employment of our own people and reconstruction of our communities.  The most critical foundation for our national security is a modern infrastructure and a healthy economy, and right now we have neither.

Part of this money would go to acquiring the construction materials and part to creating jobs. These jobs would be both direct (those employed to design and build the roads and bridges, renovate the water treatment plants, etc.) and indirect (those employed to build the heavy equipment and steel and concrete used to build the roads, water treatment plants, etc.).  Assuming half the money would be spent on materials and half on labor, the $100 billion would support 2 million jobs, at an average compensation of $50,000 per year. 

Those 2 million salaries spent in local supermarkets and car dealerships would be the demand that would pull the string, creating more jobs.  That income stream would be available to avoid home foreclosures and pay local and state taxes which, in turn, would save the jobs of state and municipal employees and the services they perform.
 

 It’s a simple plan which involves America investing in itself, without further borrowing to do so.