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James Sleigh

Economics Essay
The state of the United States economy has shown some signs of improvement, however,
implementing new monetary and fiscal policies can spur the economy further and minimize the
risk of economic recessions in the future, through lowering taxes and interest rates on American
businesses, and finally buying fewer T-bills. Current economic statistics show that the Gross
Domestic Product (GDP) increased 2.2% from last year (bea.gov), a positive but not ideal rate,
while unemployment continues to drop slightly. Increased stock market activity has shown
confidence in corporations and more trust in a stable economy. However with unemployment at
6.7% (bea.gov), there is still much work to be done.However more actions must be taken by both
the Federal Reserve and Congress to further strengthen the economy, while keeping inflation at a
low and steady rate of 2%. In order to bolster the economy, the government must lower corporate
taxes to entice businesses to create more industry and job openings, lower interest rates to
promote business, and continue to slow inflation by continuing to buy fewer T-bills.
The partnership of Congress and the Federal Reserve to create an infrastructure bank
will have a large impact on the annual GDP growth. With the creation of this bank, there will be
greater incentives to pioneer new construction projects and restore older infrastructure, creating
more job growth and more goods produced, which will both lead to economic growth and GDP
growth. The United States ranks 25th in the world for quality of infrastructure (Boggs), and the
incentives created and loans given will be enough to improve the nations infrastructure. A bill
has already been proposed in Congress with bipartisan support by Maryland Senator John
Delaney that links the federal reserve and Congress to adopt the bank in order to fuel greater
economic growth. Delaney said of the bill The bipartisan legislation creates a $50 billion dollar
infrastructure fund that can be leveraged to $750 billion. To encourage U.S. corporations to
purchase these bonds, they will be allowed to repatriate a certain dollar amount determined by
auction - in overseas earnings tax-free for every $1 they invest in the bonds. The fund will then
provide loans or loan guarantees to states and municipalities to finance transportation, energy,
education, communications, and water infrastructure projects. According to the American
Society of Civil Engineers (ASCE) 2013 infrastructure report, a national infrastructure bank will
raise the GDP by $3 trillion dollars (Boggs), or about a 4.3% increase. These incentives of the
Federal Reserve through these loans will only increase the GDP because more goods and
services will be created.
Creating a national infrastructure bank will also maximize employment by providing jobs
from construction to management positions in transportation, energy, education, and other
industrial areas. American bridges, highway systems, national parks and water main pipes are
showing signs of the extended amount of wear and stress induced by a nation that is moving
faster and more efficient, however the nations infrastructure is not keeping up. In fact, a report
compiled by the Government Accountability Office, some 600,000 bridges are structurally
deficient or inadequate to todays traffic needs (Plummer).
The proposed Delaney bill for infrastructure development would cost about $10 billion,
and according to a report compiled by the Department of Transportation, for every $1 billion
spent, 35,000 jobs are created. President Barack Obama said that the new bank would create
nearly three million jobs nationwide. Large business corporations do not want to tackle the
enormous issue of infrastructure redevelopment, which has created a stalled work environment
for construction workers, however, with the amount of loans and incentives provided by the Fed,
more construction jobs will be created. Unlike jobs in many other industries such as
manufacturing and customer service, infrastructure and construction jobs cannot be outsourced to
foreign nations. Representative Rosa DeLaura (D-Conn.) said of the Delaney bill rebuilding our
roads, bridges, ports and other infrastructure creates thousands of jobs that cannot be outsourced.
These are exactly the kind of steps we should be taking to put our economy back on solid
The proposed infrastructure bill would not affect inflation rates because the Federal
Reserve would not be tampering with the money supply to increase inflation. Inflation is at a
historic low, and deflation has become an even bigger issue in todays economy. The
infrastructure bank would not increase inflation because bridges and roads and public works take
a long time to build, and they do not directly relate with consumer money supply. This monetary
and fiscal policy would have little effect on deflation because the cost of construction, whether
through tools and equipment or leases and loans remains relatively constant, thus not causing
Creating a national infrastructure bank with the help of Congress and the Federal Reserve
will increase the United States GDP, maximize employment and keep inflation at a steady and
safe rate. The United States was given a D rating on the quality of its infrastructure by the
American Society of Civil Engineers, and the passage of this bill will restore and maintain the
nations crumbling infrastructure. The bill has bipartisan support because it addresses restoring
highways, bridges, and other infrastructure development, providing jobs for millions of
Americans and greater GDP growth.

Works Cited
Agri-pulse.com. N.p., n.d. Web. 2 Feb. 2014. <http://www.agri-pulse.com/>.
Boggs, Patton, ed. Bloomberglaw.com. Bloomberg Business, n.d. Web. 2 Feb. 2014.
Delaney.house.gov. John Delaney, n.d. Web. 2 Feb. 2014. <http://delaney.house.gov/>.
Plummer, Brad, ed. Washingtonpost.com. Washington Post, n.d. Web. 2 Feb. 2014.

Agri-Pulse Communications. Last modified April 1, 2013. http://www.agri-pulse.com/.

Bloomberg Law. http://about.bloomberglaw.com.

John Delaney. Last modified January 17, 2014. http://delaney.house.gov/.

Washington Post. Last modified January 20, 2014. http://www.washingtonpost.com/.

Washington Post. Last modified September 19, 2011. http://www.washingtonpost.com/.

Web Site Evaluation Form
1. URL of the Website: http.washingtonpost.com/business/economy/how-obamas-plan-for-
infrastructure-bank-would-work2. Website Title: _How Obamas plan for infrastructure bank
would work
3. What organization and/or individual created this website?
__Washington Post_______________________________
4. Can you rely on this information? Yes No Why or why not?
It is a trustworthy source and different facts/statistics are used
6. Is the material: ___Primary/Original _x__Secondary/Derived?
7. When was this page written or last updated?
8. Rate this web page.

use with caution good, basic information excellent for the assignment

1. URL of the Website: http://.washingtonpost.com/local/trafficandcommuting/maryland-
2. Website Title: Maryland congressman Delaney gains bipartisan traction on infrastructure
3. What organization and/or individual created this website?
Washington Post
4. Can you rely on this information? Yes No Why or why not?
_Reliable source uses statistics and facts, news article
6. Is the material: ___Primary/Original __x_Secondary/Derived?
9. When was this page written or last updated? _January 2014
10. Please rate this web page.

use with caution good, basic information excellent for the assignment

1. URL of the Website: http://_about.bloomberglaw.com/practitioner-contributions/a-national-
2. Website Title: A National Infrastructure financing authority
3. What organization and/or individual created this website?
__Bloomber Law
4. Can you rely on this information? Yes No Why or why not?
_Lots of facts and stats professional lawyer and economist and trustworthy news
6. Is the material: __x_Primary/Original __x_Secondary/Derived?
10. Please rate this web page.

use with caution good, basic information excellent for the assignment