Tom

homes for sale

Tom

homes for sale

Over the past several weeks politicians have been talking about how they will rescue the economy. We have heard ideas ranging from road construction and bridge repair to rebates and tax reductions for the middle class to reducing the rate at which retirees are taxed on 401k withdrawals and reducing the capital gains tax rate. Most of these have been tried before; many with questionable success.

Road and bridge construction was probably the most successful works program during the Great Depression because it provided jobs for many and made important improvements to our national highway system, thereby facilitating stronger interstate commerce. There were other types of jobs created by the WPA that had lasting value to our society, but the road building provided stimulus to more pocketbooks. When money is spent on construction projects it is a generally accepted rule-of-thumb that each dollar passes through seven individuals, increasing the investment effect on a community sevenfold. This is the area where Keynesian Economics can actually yield a return for its investment.

The intent of the WPA jobs program can work today, but must be fine-tuned to the needs of our current economy and society; and we can do this if:

The jobs that are created have intrinsic value in this century.

The reach of this stimulus extends nationally, and provides jobs in all levels of the industry and service sectors.

The stimulus has an immediate and sustained impact for the economy.

The projects undertaken bring greater value to the economy than they cost.

And, the projects are generally recognized by the citizenry as providing that great value.

Construction spending affects at least one third of the economy of this country directly, and it affects most of the remainder of the economy indirectly. It has been the sector most adversely hurt by the latest financial implosion, and the slowdown in this sector has led to the financial sector write-downs and market turmoil. The Construction Industry will need massive support to replace the thousands of jobs it has already lost.

Forms of construction that are technically complex will have a greater impact on more of our economy than roads and bridges. Buildings require complex mechanical and electrical systems, multiple finish materials, furnishings, technological equipment, and many other manufactured items.

To win public support for funding of construction projects the projects must be perceived as unarguably valuable to every community in the country. This tends to reduce the list of possibilities to three areas: Build and renovate public medical facilities, build and renovate public schools and colleges, build public housing. Medical facilities tend to be self-sustaining, and most require a time-consuming process of application called a Certificate of Need (CON). Housing will only affect certain portions of our communities and there exist public-private partnerships that can provide for these needs. The only way school construction can get funded is though issuance of government bonds or with cash. A private financing method has been popular, recently, but it is more expensive and requires a healthy credit market.

Government bonds are issued in two basic ways, upon the vote of an electorate, and though the issuance of Certificates of Participation (COP). Both methods ensure full accountability for the money that is borrowed. Because COPs do not need to wait for an electoral decision they can be applied for and funded in a much shorter period of time, and can get construction underway in a matter of months. In the meantime, design professionals: architects, engineers, surveyors, etc., can be employed and begin the process of putting money back into the communities across the country.

In North Carolina, the first major budget item to be cut was the almost $ 1 billion in repair and renovation spending for the public universities. This makes no sense, as this money can get into the community immediately, and provide a quick stimulus. It should even be increased.

I propose that the Federal Government finance COPs, with little or no interest, to school districts, nationwide, taking care to provide extra assistance to low-wealth districts, perhaps through outright grants to repair, improve, and replace substandard facilities. The Federal Government does not draw a distinction between operating budgets and capital budgets. Most other levels of government do and this makes budgeting for capital projects more time-consuming and subject to reduction and removal from the budgets of state, county and local governments. State budgets are also more sensitive to the need to be balanced; many are required to do so by law.

The State and County Governments must not cut Repair and Renovation money for the same reason. This money will help to reduce energy costs and other operating expenses. In some of the smaller universities and school systems it will eliminate some extremely hazardous conditions that continue to worsen for lack of funds. This money will circulate in the local economy, but also provide jobs for the national building industry.

For decades state departments of education have been aware that many of their schools were in need of repair. Many public schools and public universities operate in buildings that should be condemned, both for structural deficiencies and for toxic air conditions. These buildings also burn fossil fuels much faster than new buildings: lighting is inefficient, heating systems as well, and insulation is often inadequate. The value of repairing or replacing these structures probably exceeds $100 billion, if not much more.

The economic development agencies of our states offer billions in tax incentives and grants to attract industries. This is justified because it will bring jobs that add to the tax base. The Federal Government justifies investing a trillion dollars in the nation’s financial institutions by saying, besides bringing market stability, this investment will eventually yield a return.

Why then can we not say that the investment in school construction will do the same, providing tax revenues from the industries and workers that create these products and buildings for our schools and colleges? Better work places will help to attract and retain better teachers. And in this era of “No Child Left Behind” we will create an even more valuable commodity: children, regardless of social or economic status or region who, by means of a safer, healthier learning environment, are better prepared for their future occupations. If we do this we will accomplish more than simply improve the national economy we will inspire the nation to reach for higher goals.