The beat-up state of America’s last-century infrastructure – trains, roads, bridges, airports, electrical grid, Internet etc. – has become a national embarrassment (who among us isn’t sick of hearing about China’s sleek, gleaming airports and lightning-fast broadband?). It’s also a strait jacket on the economic recovery and drag on long-term growth. Fixing it up will cost about $1 trillion. That money’s not coming out of a deficit-obsessed Congress any time soon; nor is the private sector going to be ponying up, since infrastructure investment tends to be an unattractively large-scale and low-return proposition. So, what to do? Policy thinkers Reed Hundt and Thomas Mann, writing in the Washington Post, have an idea: American businesses have more than a trillion dollars in profits parked in bank accounts overseas, safely out of reach of the IRS but not doing anyone any good. What if Congress let firms bring back their overseas profits tax free – if, and only if, they put the money into an infrastructure bank for a certain period? The bank would then issue low-interest, long-term loans for infrastructure projects. Putting together two problems – neglected infrastructure, corporate tax evasion – might add up to “a solution that works for both sides of the aisle,” Reed and Mann write, hopefully, “even in these sharply polarized times.” Hmm, maybe. To me, it sounds far too sensible to get through Congress.
• ‘Rebuild American infrastructure? Companies’ offshore profits can help’ [Washington Post]