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Advantage 2 is Competitiveness
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- AND, transportation infrastructure is a vital internal link to economic leadership AGC, 11
- Investing in infrastructure is vital to our national economic security. America’s position and power in the world is
- America will surely be eclipsed by other, fast-growing competitors
- NIB sends a signal that the US is committed to rebuilding Tyson 11
- AND, it reduces the trade deficit
- Economic primacy prevents all conflict escalation Freidberg Schonfeld, 8
- Competitiveness prevents great power nuclear war. Khalilzad, ’11
Advantage 2 is CompetitivenessA national infrastructure bank is necessary to maintain economic competitiveness Puentes 11 (Robert, Senior Fellow at the Brookings institution “Infrastructure Investment and U.S. Competitiveness” http://www.cfr.org/united-states/infrastructure-investment-us-competitiveness/p24585) Most experts agree the United States must address the nation's aging network of roads, bridges, airports, railways, power grids, water systems, and other public works to maintain its global economic competitiveness. In 2010, President Barack Obama proposed a national infrastructure bank that would leverage public and private capital to fund improvements, and in April 2011 a bipartisan coalition of senators put forward a similar concept (NYT). Four experts discuss how the United States can best move forward on infrastructure development. Robert Puentes of the Brookings Institution suggests focusing on increasing exports, low-carbon technology, innovation, and opportunity. Renowned financier Felix Rohatyn endorses the concept of a federally owned but independently operated national infrastructure bank that would provide a "guidance-system" for federal dollars. Infrastructure policy authority Richard Little argues that adequate revenue streams are the "first step in addressing this problem," stressing "revenue-based models" as essential. Deputy Mayor of New York City Stephen Goldsmith says that the "most promising ideas" in this policy area involve public-private partnerships. Infrastructure is central to U.S. prosperity and global competitiveness. It matters because state-of-the-art transportation, telecommunications, and energy networks--the connective tissue of the nation--are critical to moving goods, ideas, and workers quickly and efficiently and providing a safe, secure, and competitive climate for business operations. But for too long, the nation's infrastructure policies have been kept separate and apart from the larger conversation about the U.S. economy. The benefits of infrastructure are frequently framed around short-term goals about job creation. While the focus on employment growth is certainly understandable, it is not the best way to target and deploy infrastructure dollars. And it means so-called "shovel ready projects" are all we can do while long-term investments in the smart grid, high-speed rail, and modern ports are stuck at the starting gate. So in addition to the focus on job growth in the short term, we need to rebalance the American economy for the long term on several key elements: higher exports, to take advantage of rising global demand; low-carbon technology, to lead the clean-energy revolution; innovation, to spur growth through ideas and their deployment; and greater opportunity, to reverse the troubling, decades-long rise in inequality. Infrastructure is fundamental to each of those elements. Yet while we know America's infrastructure needs are substantial, we have not been able to pull together the resources to make the requisite investments. And when we do, we often fail to make infrastructure investments in an economy-enhancing way. This is why the proposal for a national infrastructure bank is so important. If designed and implemented appropriately, it would be a targeted mechanism to deal with critical new investments on a merit basis, while adhering to market forces and leveraging the private capital we know is ready to invest here in the United States. AND, transportation infrastructure is a vital internal link to economic leadership AGC, 11 (5/19/2011, The Associated General Contractors of America, “THE CASE FOR INFRASTRUCTURE & REFORM: Why and How the Federal Government Should Continue to Fund Vital Infrastructure in the New Age of Public Austerity,” http://www.agc.org/galleries/news/Case-for-Infrastructure-Reform.pdf, JMP) It also is important to note that the federal programs for investing in highway and transit projects has traditionally been self-funded. Since the 1950s, highway users have, through a mixture of gas taxes and other use-related fees, provided all of the funds that go into the Highway Trust Fund. Until only recently all federal surface transportation investments had come from this self-funded Trust Fund. In other words, structured correctly, the federal surface transportation program does not have to cost anyone that doesn’t use the highway system a single penny. As important, there is a strong argument to be made for the fact that the proper role of the federal government is to create and set conditions favorable to private sector job creation. For example, in an economy where the difference between success and failure is often measured by a company’s ability to deliver goods quickly and efficiently, maintaining transportation infrastructure is as important to the success of the private sector as are stable and low tax rates, minimal red tape and regulations and consistent and stable rule of law. Officials in Washington also need to understand that allowing our transportation infrastructure to deteriorate will serve as an added tax on private citizens and the business community alike. That is because added congestion, shipping delays and transportation uncertainty will raise commuting costs, the price of most retail and grocery goods and the cost of getting supplies and delivering products for most U.S. businesses. Investing in infrastructure is vital to our national economic security. America’s position and power in the world is directly dependent on its economic supremacy. It is, after all, our national wealth that funds the country’s highly skilled Armed Forces, that allows us to direct global trade policy and that allows our currency to dominate global marketplaces. Without continued investments to support and nurture that economic vitality, America will surely be eclipsed by other, fast-growing competitors like China, Brazil and/or India. Given that so much of the U.S. economy has evolved into a just-in-time model where as-needed deliveries are far more efficient than expensive warehousing and storage, maintaining our transportation infrastructure is vitally important to the health of our economy. Traffic congestion and aging roads already cost U.S. businesses $80 billion a year because of deferred infrastructure maintenance and our failure to keep pace with the growth of shipping and other traffic. Allowing our transportation infrastructure to deteriorate will only further undermine our businesses and erode our national economic security. In other cases, the federal government has an obligation to invest in infrastructure to avoid imposing costs on U.S. businesses and imposing unfunded mandates on state and local governments. For example, local governments had long been responsible for paying to maintain and operate water systems. That meant only major cities and wealthy towns had access to modern water systems. Much of that changed when the federal government began mandating quality standards for drinking water and wastewater discharge through legislation like the Clean Water Act and Safe Drinking Water Act. These standards were in the best interest of the nation, ensuring protection of public health and environmental quality. By mandating quality standards, however, the federal government forces local governments to spend billions of dollars to upgrade equipment and comply with regulatory burdens. The federal government must not foist the burden of maintaining national standards onto local ratepayers alone. Given that it is in the federal interest to set water quality standards, then so too must it be in the federal interest to provide – primarily in the form of state revolving loan funds – financing help to operators so they can meet those standards. NIB sends a signal that the US is committed to rebuilding Tyson 11-Professor @ the Haas School of Business of UC-Berkeley, PhD in Economics @ MIT, BA Summa Cum Laude in Economics @ Smith College, former Chair of the US President’s Council of Economic Advisers, served as the Director of the National Economic Council [Laura, Harvard Business Review, “A Better Stimulus Plan for the U.S. Economy,” 2011, http://hbr.org/web/extras/hbr-agenda-2011/laura-d-tyson, DKP] Although stimulus spending is a politically contentious issue, America is now in urgent need of a national infrastructure bank to help finance transformative projects of national importance. During the coming year I will work with the Obama administration; Senator John Kerry, Representative Rosa DeLauro, and other members of Congress; governors; mayors; and business leaders on legislation to establish and provide the capital for such an institution. I will also foster public support for its creation through speeches, interviews, and opinion columns like this one. Unlike most other forms of stimulus, infrastructure spending benefits the economy in two ways: First, it creates jobs—which, because those jobs put money in consumers' pockets, spurs demand. Analysis by the Congressional Budget Office indicates that infrastructure spending is a cost-effective demand stimulus as measured by the number of jobs created per dollar of budgetary expenditure. Second, the resulting infrastructure enhancement supports supply and growth over time. By contrast, underinvestment not only hobbles U.S. competitiveness but also affects America's national security as vulnerabilities go unaddressed. In its 2009 report on the state of the nation's infrastructure, the American Society of Civil Engineers gave the U.S. a near-failing grade of D. Perhaps that should not be surprising, given that real infrastructure spending today is about the same as it was in 1968, when the economy was smaller by a third. A 2008 CBO study concluded, for example, that a 74% increase in annual spending on transportation infrastructure alone would be economically justifiable. That calculation leaves out additional infrastructure spending needed for other key public goals such as water delivery and sanitation. Realizing the highest possible return on infrastructure investments depends on funding the projects with the biggest impact and financing them in the most advantageous way. Properly designed and governed, a national infrastructure bank would overcome weaknesses in the current selection of projects by removing funding decisions from the politically volatile appropriations process. A common complaint today is that projects are often funded on the basis of politics rather than efficiency. Investments would instead be selected after independent and transparent cost-benefit analysis by objective experts. The bank would provide the most appropriate form of financing for each project, drawing on a flexible set of tools such as direct loans, loan guarantees, grants, and interest subsidies for Build America Bonds. It should be given the authority to form partnerships with private investors, which would increase funding for infrastructure investments and foster efficiency in project selection, operation, and maintenance. That would enable the bank to tap into the significant pools of long-term private capital in pension funds and dedicated infrastructure equity funds looking for such investment opportunities. Crafting the law to achieve these goals is a serious and challenging undertaking, particularly in view of large budget deficits and a contentious political atmosphere. But I believe they are worthy of the political and legislative effort required to realize them. The U.S. must invest considerably more in its infrastructure to secure its competitiveness and deliver rising standards of living. This effort would also put millions of Americans to work in meaningful jobs. The time has come to make it happen. AND, it reduces the trade deficit Skidelsky and Martin 11-*Emeritus Professor of Economics @ the University of Warwick, Fellow of the British Academy, Chairmen of the Governors of Brighton College, **PhD in Economics @ Oxford, Senior Investment Analyst @ Thames River Capital, Writes for the Institute for New Economic Thinking [Robert, “For a National Investment Bank,” 3/30/2011, http://www.skidelskyr.com/site/article/for-a-national-investment-bank/, DKP] Rebalancing the economy toward exports is one example of what is needed. The twenty-five-year credit boom that began in the mid-1980s generated an unbalanced economy, in which domestic sectors such as construction and real estate grew at an excessive rate, while exporting industries such as manufacturing lagged behind. America’s foreign trade was roughly in balance in the 1970s; in the two years leading up to the recession, the current account deficit in foreign trade averaged 6.5 percent of GDP. To reverse the trade imbalance, the administration has stated its ambition to double exports by 2015. A National Investment Bank could support the President’s National Export Initiative by giving priority to new export industries because of the real economic benefits they would bring in reducing America’s dependence on borrowing from abroad to pay for foreign products. Another example of the structural economic challenges that a National Investment Bank could help meet is the deterioration of American infrastructure. Investment in America’s transport, energy, and water systems has been allowed to fall to critically low levels over the past four decades. In 2009, the American Society of Civil Engineers estimated investment needs over the next five years alone of $2.2 trillion. Its “Report Card” gave a D or D–rating to the country’s current facilities for aviation, energy, hazardous waste, roads, levees, schools, and transit, among others. But infrastructure is a prime example of a sector in which the benefits of a project to the broader economy are larger than the private financial return to the owner, with the result that private capital markets, left to their own devices, tend to fund less infrastructure investment than is optimal for the economy as a whole. What is more, the current system of allocating public money to such investment is hopelessly politicized, subject to the pressures of state and local governments and the individual demands of congress[persons] men and senators. As Felix Rohatyn and Everett Erlich proposed in these pages before the crisis struck, a National Investment Bank is the ideal vehicle for solving both these problems.3 The traditional arguments for a public development bank strongly apply in the fields of energy and the environment. The development of new technologies in renewable energy production to help meet America’s energy security and environmental challenges is a national priority. Because such energy resources require long lead times, critical levels of volume, and an effective regulatory policy, private capital markets will tend to fall short of America’s needs. A National Investment Bank could take the lead in financing green technologies such as wind and geothermal power by evaluating and incorporating into its appraisals the value of their benefits to the broader economy. Economic primacy prevents all conflict escalation Freidberg & Schonfeld, 8 --- *Professor of Politics and IR at Princeton’s Woodrow Wilson School, AND **senior editor of Commentary and a visiting scholar at the Witherspoon Institute in Princeton (10/21/2008, Aaron and Gabriel, “The Dangers of a Diminished America”, Wall Street Journal, http://online.wsj.com/article/SB122455074012352571.html?mod=googlenews_wsj) With the global financial system in serious trouble, is America's geostrategic dominance likely to diminish? If so, what would that mean? One immediate implication of the crisis that began on Wall Street and spread across the world is that the primary instruments of U.S. foreign policy will be crimped. The next president will face an entirely new and adverse fiscal position. Estimates of this year's federal budget deficit already show that it has jumped $237 billion from last year, to $407 billion. With families and businesses hurting, there will be calls for various and expensive domestic relief programs. In the face of this onrushing river of red ink, both Barack Obama and John McCain have been reluctant to lay out what portions of their programmatic wish list they might defer or delete. Only Joe Biden has suggested a possible reduction -- foreign aid. This would be one of the few popular cuts, but in budgetary terms it is a mere grain of sand. Still, Sen. Biden's comment hints at where we may be headed: toward a major reduction in America's world role, and perhaps even a new era of financially-induced isolationism. Pressures to cut defense spending, and to dodge the cost of waging two wars, already intense before this crisis, are likely to mount. Despite the success of the surge, the war in Iraq remains deeply unpopular. Precipitous withdrawal -- attractive to a sizable swath of the electorate before the financial implosion -- might well become even more popular with annual war bills running in the hundreds of billions. Protectionist sentiments are sure to grow stronger as jobs disappear in the coming slowdown. Even before our current woes, calls to save jobs by restricting imports had begun to gather support among many Democrats and some Republicans. In a prolonged recession, gale-force winds of protectionism will blow. Then there are the dolorous consequences of a potential collapse of the world's financial architecture. For decades now, Americans have enjoyed the advantages of being at the center of that system. The worldwide use of the dollar, and the stability of our economy, among other things, made it easier for us to run huge budget deficits, as we counted on foreigners to pick up the tab by buying dollar-denominated assets as a safe haven. Will this be possible in the future? Meanwhile, traditional foreign-policy challenges are multiplying. The threat from al Qaeda and Islamic terrorist affiliates has not been extinguished. Iran and North Korea are continuing on their bellicose paths, while Pakistan and Afghanistan are progressing smartly down the road to chaos. Russia's new militancy and China's seemingly relentless rise also give cause for concern. If America now tries to pull back from the world stage, it will leave a dangerous power vacuum. The stabilizing effects of our presence in Asia, our continuing commitment to Europe, and our position as defender of last resort for Middle East energy sources and supply lines could all be placed at risk. In such a scenario there are shades of the 1930s, when global trade and finance ground nearly to a halt, the peaceful democracies failed to cooperate, and aggressive powers led by the remorseless fanatics who rose up on the crest of economic disaster exploited their divisions. Today we run the risk that rogue states may choose to become ever more reckless with their nuclear toys, just at our moment of maximum vulnerability. The aftershocks of the financial crisis will almost certainly rock our principal strategic competitors even harder than they will rock us. The dramatic free fall of the Russian stock market has demonstrated the fragility of a state whose economic performance hinges on high oil prices, now driven down by the global slowdown. China is perhaps even more fragile, its economic growth depending heavily on foreign investment and access to foreign markets. Both will now be constricted, inflicting economic pain and perhaps even sparking unrest in a country where political legitimacy rests on progress in the long march to prosperity. None of this is good news if the authoritarian leaders of these countries seek to divert attention from internal travails with external adventures. As for our democratic friends, the present crisis comes when many European nations are struggling to deal with decades of anemic growth, sclerotic governance and an impending demographic crisis. Despite its past dynamism, Japan faces similar challenges. India is still in the early stages of its emergence as a world economic and geopolitical power. What does this all mean? There is no substitute for America on the world stage. The choice we have before us is between the potentially disastrous effects of disengagement and the stiff price tag of continued American leadership. Competitiveness prevents great power nuclear war. Khalilzad, ’11 [Zalmay Khalilzad was the United States ambassador to Afghanistan, Iraq, and the United Nations during the presidency of George W. Bush and the director of policy planning at the Defense Department from 1990 to 1992, “ The Economy and National Security”, 2-8-11, http://www.nationalreview.com/articles/print/259024] We face this domestic challenge while other major powers are experiencing rapid economic growth. Even though countries such as China, India, and Brazil have profound political, social, demographic, and economic problems, their economies are growing faster than ours, and this could alter the global distribution of power. These trends could in the long term produce a multi-polar world. If U.S. policymakers fail to act and other powers continue to grow, it is not a question of whether but when a new international order will emerge. The closing of the gap between the United States and its rivals could intensify geopolitical competition among major powers, increase incentives for local powers to play major powers against one another, and undercut our will to preclude or respond to international crises because of the higher risk of escalation. The stakes are high. In modern history, the longest period of peace among the great powers has been the era of U.S. leadership. By contrast, multi-polar systems have been unstable, with their competitive dynamics resulting in frequent crises and major wars among the great powers. Failures of multi-polar international systems produced both world wars. American retrenchment could have devastating consequences. Without an American security blanket, regional powers could rearm in an attempt to balance against emerging threats. Under this scenario, there would be a heightened possibility of arms races, miscalculation, or other crises spiraling into all-out conflict. Alternatively, in seeking to accommodate the stronger powers, weaker powers may shift their geopolitical posture away from the United States. Either way, hostile states would be emboldened to make aggressive moves in their regions. As rival powers rise, Asia in particular is likely to emerge as a zone of great-power competition. Beijing’s economic rise has enabled a dramatic military buildup focused on acquisitions of naval, cruise, and ballistic missiles, long-range stealth aircraft, and anti-satellite capabilities. China’s strategic modernization is aimed, ultimately, at denying the United States access to the seas around China. Even as cooperative economic ties in the region have grown, China’s expansive territorial claims — and provocative statements and actions following crises in Korea and incidents at sea — have roiled its relations with South Korea, Japan, India, and Southeast Asian states. Still, the United States is the most significant barrier facing Chinese hegemony and aggression. Given the risks, the United States must focus on restoring its economic and fiscal condition while checking and managing the rise of potential adversarial regional powers such as China. While we face significant challenges, the U.S. economy still accounts for over 20 percent of the world’s GDP. American institutions — particularly those providing enforceable rule of law — set it apart from all the rising powers. Social cohesion underwrites political stability. U.S. demographic trends are healthier than those of any other developed country. A culture of innovation, excellent institutions of higher education, and a vital sector of small and medium-sized enterprises propel the U.S. economy in ways difficult to quantify. Historically, Americans have responded pragmatically, and sometimes through trial and error, to work our way through the kind of crisis that we face today. 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