NCPA - National Center for Policy Analysis

When Does an Infrastructure Bank Make Sense?

September 16, 2010

President Obama recently called for a $50 billion investment in the nation's infrastructure, funded in part through a national infrastructure bank.  The president promises that the infrastructure bank will "leverage" federal resources to maximize the productivity of transportation investments, says Samuel Staley, Director of the Urban Futures Program of the Reason Public Policy Institute.  According to the president:

  • The plan will be fully paid for and will not add to the deficit over time. 
  • The infrastructure bank will leverage federal dollars and focus on the smartest investments. 

But, as pointed out in a testimony before the House Ways & Means Select Revenue Measures Subcommittee, how the bank is structured will be fundamental to determining whether these funds will be squandered or productively add to the transportation network.   A key component will be whether it is set up as a true revolving loan program, without ongoing subsidy from general taxes, so that it has to survive on the merits of the programs it funds, says Staley.

Source: Samuel Staley, "When Does an Infrastructure Bank Make Sense?" Reason Foundation, September 9, 2010.

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