Why Not Sell Savings Bonds To Support Infrastructure Spending?

Summary

  • The incoming Trump Administration has big plans to spend about $1 trillion over a few years’ time on bridges, highways, railroads, seaports, airports, and other infrastructure projects.
  • The American Society of Civil Engineers projects a shortfall of $700 billion in infrastructure spending between now and 2025, and a shortfall of about $2.6 trillion by 2040.
  • A key issue will be the source of the funding that must be raised to support such a huge spending program; we could use savings bonds for raising a portion.
  • War bonds were responsible for 73% of all funding used to finance our efforts in World War II; surely we could raise 10% or more for infrastructure spending.
  • Factoring in the emotional appeal of letting almost anyone make a contribution, other programs could even be funded, like NASA; in any case, infrastructure funding would be greatly helped.

Source

The incoming Trump Administration has big plans regarding rejuvenating growth in the US economy. There are tentative plans to spend about $1 trillion over a few years' time on bridges, highways, railroads, seaports, airports, and other infrastructure projects that are sorely needed. The American Society of Civil Engineers (ASCE) estimated in 2013 that the shortfall in infrastructure spending would reach about $1.1 trillion by 2020; this gap has grown substantially in the years since this quadrennial report came out.

Indeed, a recent update by the ASCE (David Harrison, 2016; WSJ) projects a shortfall of $700 billion between now and 2025, and a shortfall of about $2.6 trillion by 2040. The cost to the economy of all the poor quality infrastructure that would result from the funding gap is estimated at about $4 trillion in lost GDP growth, and around 2.5 million potential jobs by 2025. This rises to an astounding $14.2 trillion in lost GDP growth and 5.8 million potential jobs not created by 2040. Clearly, something needs to be done, and in light of the election results, there may be strong support in Congress for passing a major infrastructure bill in the first few months of President-elect Trump's term.

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Disclaimer: This article is intended to provide information to interested parties. As I have no knowledge of individual investor circumstances, goals, and/or portfolio concentration or ...

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