***NIB NEG – case***
***Top-level problem/solution***
MAP-21 – sq solves 1/3
Status Quo solves- MAP-21 creates safer more efficient transportation
Federal Highway Administration, 12, (Moving Ahead for Progress in the 21st Century Act (MAP21) A Summary of Highway Provisions http://www.fhwa.dot.gov/map21/summaryinfo.cfm)
Setting the course for transportation investment in highways, MAP-21 – Strengthens America’s
highways MAP-21 expands the National Highway System (NHS) to incorporate principal arterials not
previously included. Investment targets the enhanced NHS, with more than half of highway funding
going to the new program devoted to preserving and improving the most important highways -- the
National Highway Performance Program. Establishes a performance-based program. Under MAP-21,
performance management will transform Federal highway programs and provide a means to more
efficient investment of Federal transportation funds by focusing on national transportation goals,
increasing the accountability and transparency of the Federal highway programs, and improving
transportation investment decisionmaking through performance-based planning and programming.
Creates jobs and supports economic growth MAP-21 authorizes $82 billion in Federal funding for FYs
2013 and 2014 for road, bridge, bicycling, and walking improvements. In addition, MAP-21enhances
innovative financing and encourages private sector investment through a substantial increase in
funding for the TIFIA program. It alsoincludes a number of provisions designed to improve freight
movement in support of national goals. Supports the Department of Transportation’s (DOT) aggressive
safety agenda MAP-21 continues the successful Highway Safety Improvement Program, doubling
funding for infrastructure safety, strengthening the linkage among modal safety programs, and creating
a positive agenda to make significant progress in reducing highway fatalities. It also continues to build
on other aggressive safety efforts, including the Department’s fight against distracted driving and its
push to improve transit and motor carrier safety. Streamlines Federal highway transportation
programs. The complex array of existing programs is simplified, substantially consolidating the program
structure into a smaller number of broader core programs. Many smaller programs are eliminated,
including most discretionary programs, with the eligibilities generally continuing under core programs.
Accelerates project delivery and promotes innovation. MAP-21 incorporates a host of changes aimed at
ensuring the timely delivery of transportation projects. Changes will improve innovation and efficiency
in the development of projects, through the planning and environmental review process, to project
delivery.
MAP-21 – sq solves 2/3
Transportation Infrastructure is getting fixed now with MAP-21
CDR, 12 (Transportation Reform Bill Signed into Law, http://www.cdrecycler.com/transportation-billreform-passage.aspx)
Highlights of the measure’s transportation program reforms include: Streamlining the Project Delivery
Process – Completing a major highway project can take 15 years, but only a fraction of that time involves actual construction. While projects
navigate the approval process, construction costs escalate. This measure streamlines the project approval process,
adding much needed common sense and efficiency. Specifically, the measure: Sets Deadlines: For slowmoving projects, the Secretary must set deadlines to make sure all approvals occur within 4 years, or
agencies lose funding through an automatic rescission. Sets NEPA Funding Threshold: Mandates a rulemaking to classify
projects with a small amount of federal funding ($5 million) as a categorical exclusion. Expedites Projects in the Right of Way:
Mandates a rulemaking for classifying projects within an existing “operational right of way” as a
categorical exclusion. Expedites Projects Destroyed by Disaster: Mandates a rulemaking to classify projects being
rebuilt after a disaster as a categorical exclusion. State Law Standing in for Federal Law: Requires a study on which state
laws provide the same level of protection as federal law. Program Reform & Consolidation – Since the creation of the
Highway Trust Fund and the core highway and bridge programs, numerous additional federal
programs have been created, diluting the focus of the Trust Fund. Currently there are more than 100 programs. In the
last four years, $35 billion in general fund transfers have been necessary to maintain Highway Trust Fund solvency. The measure also
consolidates and eliminates programs, and better focuses limited gas tax revenues on critical needs:
Consolidates the number of surface transportation programs by two-thirds. Eliminates dozens of programs and
makes more resources available with flexibility to states and metropolitan areas. Lowers total transportation enhancements program funding
by $200 million and gives states the flexibility to use 50 percent of this money on construction projects. Incentivizes, rather than penalizes,
states to partner with the private sector to finance and operate transportation projects. No Earmarks – While the previous surface
transportation law contained more than 6,300 earmarks, this is the first surface transportation bill in decades that does not contain any
earmarks. The Associated General Contractors of America (AGC) says it is grateful to the efforts its members made in responding to the
association’s legislative alerts and contacting local senators and representatives at key points in the legislative process. AGC provides a
summary of Provisions in MAP-21 that Impact the highway and transportation construction industry included below:
Funding Provides
funding certainty through fiscal year (FY) 2014 (Sept. 30, 2014) The bill provides current funding levels
plus inflation. Obligation limit for the federal-aid highway program is $39.7 billion in FY 2013 and $40.25 billion in FY 2014. Federal transit
programs are provided $10.6 billion in FY2013 and $10.7 billion in FY 2014. Funding Distribution Eliminates equity bonus program and, instead,
distributes highway formula funds to states based on each state’s share of total highway funds distributed in FY 2012. Every
state is
guaranteed a minimum return of 95 percent of its payments into the HTF. Financing/Supplemental
Revenue Increases funding for and expands the Transportation Infrastructure Finance & Innovation
Act (TIFIA) program. Increases available TIFIA resources from $122 million per year ($244 million total for two years) to $1.75 billion for
this two year period – an amount more than 14 times larger than previous amounts. Enables TIFIA loans to be applied to related groups of
projects, rather than a single project. Allows TIFIA to pay for a larger share of project costs (increased from 33 percent to 49 percent) Expands
opportunities for rural projects Does not penalize states pursuing public-private partnerships (PPPs) involving leasing of road facilities to private
companies. New capacity can be tolled on all existing federal-aid (road, bridge) facilities (this eliminates the cap on slots in the interstate tolling
and value pricing pilot programs). No existing untolled lanes can be tolled, and there have to be as many toll-free lanes as tolled lanes on the
facility. Supports
PPPs for public transportation projects, requiring FTA to provide technical assistance
and best practice information to federal transit grant recipients on PPP models and methods to use
private providers for public transit. Consolidation of Federal Highway Programs Reduces the number
of highway programs by two-thirds Four “core” programs are: National Highway Performance Program – to improve condition
and performance of the National Highway System (NHS). Consolidation of NHS and IM, and aspects of the Bridge program. Surface
Transportation Program – with broad eligibility for any public road suballocated to local governments based on population. Can also be used for
bridges off of the federal-aid system. Highway Safety Improvement Program – for road infrastructure safety, Includes a set-aside for rail grade
crossings.
Congestion Mitigation and Air Quality Program Transportation Enhancements Renames
enhancements as transportation alternatives and lifts the requirement that a state must spend 10
percent of their Surface Transportation Program funding for these types of projects. Sets aside 2 percent of
MAP-21 – sq solves 3/3
CDR ’12 cont’d
each state’s apportionments to be used on eligible transportation alternative projects Transportation alternative funding will be split, with 50
percent provided to local governments and 50 percent to states States
cannot opt out of the transportation alternative
set-aside entirely and use funds for transportation improvements Freight Provides incentives for
states to create freight plans If a project is on the state freight plan, the federal share would go from 80 percent to 90 percent for
non-Interstate projects on the plan, and from 90 to 95 percent for projects on the Interstate system, in order to give states incentives to
prioritize freight mobility projects. Does not create a separate category or program for freight with formula funding. Establishes a national
freight policy and requires development of a national freight strategic plan and designation of a primary freight network. Authorizes a Projects
of Regional and National Significance program (general funded, requires appropriations). Performance Measures Integrates performance
measures for Metropolitan Planning Organizations and States that will be developed with the U.S. Department of Transportation (DOT) to
assess the condition of the facilities and operation of roads and bridges and establish performance targets. Environmental
Streamlining Contains significant reforms in the environmental review and planning process designed
to reduce project delivery time and costs, including: Expands the number and types of projects that
can be excluded from the federal environmental review process. Encourages early coordination
between relevant agencies to avoid delays later in the review process and directs DOT to develop
specific review deadlines. Designates the U.S. DOT as the lead agency for the review and approval of transportation projects. DOT to
encourage deadlines for actions by other federal agencies. Allows for programmatic decisions instead of project by project decisions. Limits
federal National Environmental Policy Act review requirements for projects that are less than $5
million or where Federal funds are less than 15 percent of the project costing more than $30 million.
Expands the category of projects that are automatically excluded from the federal environmental review process, including emergency projects,
many maintenance projects and reconstruction projects. Provides expedited procedures for approval of projects with minimal environmental
impact. Allows for the purchase of right-of-way and for design to begin prior to final environmental clearance. Project
Delivery Allows
states to use the Construction Management General Contracting (CMGC). CMGC uses a two-step
procurement process where the CMGC is selected using price and best value. Creates incentives for
states to use innovative contracting practices and use of new technologies. Work Zone Safety Calls for the use of
positive barriers where workers are exposed to high-volume, high-speed traffic and calls for unit price bidding in most cases. Buy America
Applies Buy America requirements to any project and project segments that are funded in part with Federal funds. Clean Construction For
states with PM 2.5 non-attainment areas, requires that 25 percent of state’s Construction Mitigation & Air Quality Improvement funds be used
for projects in those areas that reduce PM. Projects can include diesel retrofit programs for on and off-road diesel powered equipment
operating on a highway construction project in the non-attainment area. Passenger Rail Does not include the Senate provision creating a new
regulatory regime within the Surface Transportation Board that had the potential to stifle the growing passenger rail market.
MAP-21 – sq solves ppp
Status Quo solves- MAP-21 promotes PPP
Kessler, Lane, 12 (Fredric W. ,Mari R., MAP-21: Treatment of Public-Private Partnerships Under
Surface Transportation Reauthorization, http://www.nossaman.com/MAP_21_PPP)
Private Sector Participation. MAP-21 requires the Secretary to develop policies and procedures to (1)
promote public understanding of the role of private investment in public transportation projects and
(2) better coordinate the public and private sectors with respect to public transportation services. To
that end, the bill further requires the Secretary to identify impediments to the greater use of publicprivate partnerships and to address them by developing and implementing procedures similar to those
used in FHWA's "SEP-15" process. The SEP-15 process allows the Secretary to waive statutory and
regulatory requirements on a case by case basis in order to increase project delivery flexibility and
promote public-private partnerships.
Best Practices and Model Contracts. The bill attempts to improve the use and effectiveness of publicprivate partnerships by directing the Secretary to develop best practices and "standard public-private
partnership transaction model contracts" for the "most popular" types of PPPs for the development,
financing, construction and operation of transportation facilities. States are encouraged to use those
model contracts as a base template. The bill also requires the Secretary to provide technical assistance
on public-private partnership practices and methods upon request of the federal-aid recipient. It
remains to be seen whether the considerable differences in state law that directly affect the type,
structure, terms and provisions of public-private partnership agreements will render such standard
agreements less useful than envisioned. There is some concern that these provisions may presage a
greater future federal regulatory role over public-private partnerships. State and local government
sponsors of PPP projects will need to be vigilant for any signs of such intrusion, and persistently
advocate for a supportive vs. regulatory federal role.
MAP-21 – solves ports
Status Quo solves- MAP-21 creates better more efficient ports and trade
Dredging Today, 12,( America’s Seaports Recognized in MAP-21 Surface Transportation Bill
Reauthorization, http://www.dredgingtoday.com/2012/07/02/americas-seaports-recognized-in-map21-surface-transportation-bill-reauthorization )
Among the provisions in the bill of most interest to ports and the freight community is establishment
of a National Freight Policy that includes development of a National Freight Strategic Plan. The National
Freight Strategic Plan, along with state freight plans and advisory committees, will enable freight
projects that improve cargo movement, reduce congestion, increase productivity and improve the
safety, security and resilience of freight transportation. Among the types of projects being addressed
are freight intermodal connectors, railway/highway grade separations and geometric improvements
to interchanges and ramps – all of which are often sought by the seaport industry. Also, by continuing
the Projects of National and Regional Significance (PNRS) program, the bill authorizes funds for large,
multimodal projects that bolster freight mobility in locations that generate national or regional
economic benefits. AAPA has supported this program since its inception. For the first time in a surface
transportation bill, Congress acknowledges the need for and economic importance of maintaining
federal navigation channels to their constructed dimensions. This legislation points out the disparity
between the money collected from shippers through the federal Harbor Maintenance Tax (HMT) and
the funds requested and appropriated for the purpose of maintaining America’s federal navigation
channels. In “Sense of Congress” language, the bill acknowledges the shortfall in spending for federal
channel maintenance and calls on the administration to request full funding consistent with revenue
collected from harbor users for the purpose of maintenance dredging and associated projects.
Fed fails
Bureaucrats gut federal solvency
Bratland 09
[John Brätland, Economist with the US Department of the Interior, Ph. D. “Capital Concepts As Insights
Into Neglect of Public Infrastructure”, 7/3/2009, mises.org/journals/scholar/bratland9.pdf]
The idea that public infrastructure represents a form ‘public capital’ is shown to be no more than
an inapt metaphor by the fact that there is no calculational foundation for its maintenance. But
other forms of essentially metaphorical ‘capital’ distract from maintenance of public
infrastructure. Legislators and bureaucrats maintain of ‘political and bureaucratic capital.’ These
capital metaphors refer to the time-structured strategies employed by public officials in pursuing their
public and political careers.21
For both legislators and bureaucrats, careers become the capital that is maintained or enhanced by
the time structured strategies that they pursue. Maintenance, in this context of career, refers to the
actions undertaken by legislators and bureaucrats to maintain their power, influence and job
satisfaction. A focus on career as a form of ‘capital’ should not necessarily be inferred as an absence of
humanitarian aspirations in the chosen actions of legislators and bureaucrats. The point is that the
maintenance of this metaphorical capital means that action is directed toward objectives that may
be largely or totally divorced from concerns focused on public-infrastructure maintenance. In their
pursuit of personally chosen ends, they must husband tools or ‘metaphorical capital goods’ to implement
their plans. But what capital goods are employed in the capital maintenance process? The metaphorical
capital goods (as distinct from metaphorical capital) that must be employed by legislators and bureaucrats
depend directly on the constituencies that must be ‘served’ to maintain or enhance career prospects.
These capital goods may be intangibles involving subjective judgments about the future and the
actions required to achieve career ends. The argument offered here is that these actions are frequently
perverse to the interests of maintaining public infrastructure.
Government financing and ownership of transit bad
O’Toole 10
[Randal O’Toole, policy analyst, “Fixing Transit: The Case for Privatization”, 11/10/2010,
www.cato.org/pubs/pas/PA670.pdf]
America’s experiment with government ownership of urban transit systems has proven to be a disaster. Since
Congress began giving states and cities incentives to take over private transit systems in 1964, worker
productivity—the number of transit riders carried per worker—has declined by more than 50 percent; the amount of
energy required to carry one bus rider one mile has increased by more than 75 percent; the inflation-adjusted cost
per transit trip has nearly tripled, even as fares per trip slightly declined; and, despite hundreds of billions of dollars
of subsidies, the number of transit trips per urban resident declined from more than 60 trips per year in 1964 to 45 in
2008.
Largely because of government ownership, the transit industry today is beset by a series of interminable
crises. Recent declines in the tax revenues used to support transit have forced major cuts in transit services in
the vast majority of urban areas. Transit infrastructure—especially rail infrastructure—is steadily deteriorating,
and the money transit agencies spend on maintenance is not even enough to keep it in its current state of poor repair.
And transit agencies have agreed to employee pension and health care plans that impose billions of dollars of
unfunded liabilities on taxpayers. Transit advocates propose to solve these problems with even more subsidies.
A better solution is to privatize transit. Private transit providers will provide efficient transit services that go
where people want to go. In order for privatization to take place, Congress and the states must stop giving
transit agencies incentives to waste money on high-cost transit technologies.
Investment fails
Public investment in infrastructure doesn’t solve anything
Harding 11
[Jeff Harding, writing for The Daily Capitalist, “The Hoax That is the Infrastructure Bank”, 9/18/2011,
http://dailycapitalist.com/2011/09/18/the-hoax-that-is-the-infrastructure-bank/]
Let me be clear: not one new job will be created by this infrastructure bank.
The truth is, we don’t need it. Our freeways, trucks, railroads, and aircraft do just fine getting around
delivering people and goods. I’m not arguing that some things need repair, but that is minor compared to
what this Infrastructure Bank envisions. As we all know, like all things run by government, they have let
some of our bridges, roads, and schools go into disrepair because they manage it incompetently.
While I am sure some kids go to run-down government schools, it’s not the buildings that are the problem, it’s the unions. I haven’t heard that our
water supply is unsafe or that anyone has been poisoned by drinking out of the tap (spare me the occasional example, please). Our
ports
are fine despite the longshoremen’s union. We don’t need high speed trains because they are
expensive and inefficient and people will fly instead. Please see Bob Poole’s work at the Reason Foundation if you need
confirmation of this fact or on any matter dealing with public transportation. ¶ Here are some things to think about when the politicians spout this
nonsense:¶ 1. Jobs
aren’t created by government. That is not to say that government employees or contractors do not work; they
do. What it means is that government does not create wealth-creating jobs that are self-sustaining as would
a private business. This should be fairly simple to understand. Taxes fund government operations.
Only the private sector creates wealth that pay taxes. We can have an argument about whether or not government should
provide much of the services that they do. For example, we know that private schools do a far better job at providing an education because they
are not controlled by unions who control politicians. But, that is not the topic here. ¶ 2. Government spending known as fiscal stimulus, or
Keynesian stimulus, as a cure for unemployment is another matter. The idea here is that since consumers aren’t spending all we need to do to
revive the economy is to start spending somewhere in the economy and magically things will revive and take off. Unfortunately such stimulus
never works to “jump start” the economy. It never has and never will. The American Recovery and
Reinvestment Act of 2009 pushed $840 billion into the economy under this theory and it failed.¶ No
one (especially our politicians) asks where the money comes from to stimulate the economy. It comes from
us, whether through taxes today or taxes tomorrow. And, the more you take out of the private
economy, the less capital is available for businesses to create real jobs. Politicians never seem to see this.¶ Right
now the Keynesians are pushing on a string with this idea. Until we clean up all the excess houses, commercial real estate and related debt, no
amount of spending or tax cuts will work. ¶ 3. Then there is the “quality” issue. Assuming that such infrastructure spending
worked, the projects chosen are those favored by government politicians and bureaucrats and we know how well they do competing with the
private sector. Need I mention the $535 million government loan guarantee to the soon to be bankrupt Solyndra? These
folks shouldn’t
be handing out your money; they don’t know what they are doing.¶ Solyndra may be the tip of the ice berg. This
selection below is just the first four contracts on the Recovery Act web site that you can bid for. (If you wish to see all of them, go here or here.)¶
As you can see, as with most of these Recovery Act contracts, it is just another way to pay for things the government needs or want. Nothing here
will create real jobs, the kind that will be market-based taxpaying jobs. It’s a waste of your money.¶ 4. Union workers will be employed for these
construction projects since they are all federal contracts and that requires union workers. No big issue here; we all understand this is a payoff to
the Democratic Party base.¶ 5. Then there is Japan. They spent
trillions on fiscal stimulus for much of the same
things that are proposed by the Infrastructure Bank. It was all a huge waste of money there and the
result was 20 years of sluggishness and the highest debt to GDP of any industrialized nation (225%; we
are at 100%). Their economy is still in the doldrums and they stupidly push for even more such stimulus
spending. We are going Japanese with all this spending but with a twist: we have inflation and we
will have more inflation from quantitative easing and more spending.¶ The Infrastructure Bank is a
hoax. Kill it now before it grows.
A2 profit
You’re confused – NIB gives grants – it doesn’t get money back
Utt 11, Victor Utt is a senior research fellow at Heritage, Infrastructure “Bank” Doomed to Fail,
http://www.heritage.org/research/commentary/2011/09/infrastructure-bank-doomed-tofail?query=Infrastructure+%2525E2%252580%252598Bank%2525E2%252580%252599+Doomed+to+Fail
Why is an
infrastructure bank doomed to fail? For starters, it’s not really a bank in the common meaning
of the term. The infrastructure bank proposed in the president’s 2011 highway reauthorization
request, for example, would provide loans, loan guarantees and grants to eligible transportation
infrastructure projects. Its funds would come from annual appropriations of $5 billion in each of
the next six years. Normally, a bank acts as a financial intermediary, borrowing money at one
interest rate and lending it to creditworthy borrowers at a somewhat higher rate to cover the costs incurred in
the act of financial intermediation. That would not be the case here. Grants are not paid back. As a former
member of the National Infrastructure Financing Commission observed, “Institutions that give
away money without requiring repayment are properly called foundations, not banks.”
A2 statistics
Their ev is falsified
Edwards 11 Chris Edwards is the director of tax studies at CATO, Infrastructure Projects to fix the Economy?
Don’t Bank on it,
http://www.cato.org/publications/commentary/infrastructure-projects-fix-economy-dont-bank-it
Looking at the Corps and Reclamation, the first lesson about federal infrastructure projects is that you can't trust the cost-benefit
analyses. Both agencies have a history of fudging their studies to make proposed projects look better,
understating the costs and overstating the benefits. And we've known it, too. In the 1950s, Sen. Paul Douglas (D-Ill.), lambasted the distorted
analyses of the Corps and Reclamation. According to Reisner, Reclamation's chief analyst admitted that in the 1960s he had to "jerk around"
the numbers to make one major project look sound and that others were "pure trash" from an economics perspective. In the 1970s, Jimmy
Carter ripped into the "computational manipulation" of the Corps. And in 2006, the Government
Accountability Office found
that the Corps' analyses were "fraught with errors, mistakes, and miscalculations, and used invalid assumptions
and outdated data." Even if federal agencies calculate the numbers properly, members of Congress often push
ahead with "trash" projects anyway. Then-senator Christopher Bond of Missouri vowed to make sure that the Corps' projects in his
state were funded, no matter what the economic studies concluded, according to extensive Washington Post reporting on the Corps in 2000.
And the onetime head of the Senate committee overseeing the Corps, George Voinovich of Ohio, blurted out at a hearing: "We don't care what
the Corps cost-benefit is. We're going to build it anyhow because Congress says it's going to be built."
***Econ answers***
A2 economy – high already 1/3
U.S. economy expanding at a rapid pace
Gross 12
(Daniel
Gross, American journalist and author and former Senior Editor at Newsweek, “Myth Of Decline:
U.S. Is Stronger and Faster Than Anywhere Else,” April 30, 2012,
http://www.thedailybeast.com/newsweek/2012/04/29/myth-of-decline-u-s-is-stronger-and-fasterthan-anywhere-else.html)
On Aug. 5, 2011, when Standard & Poor’s stripped the United States of its AAA credit rating, it was the latest in a string of economic
humiliations for the U.S. After the failure of Lehman Brothers in the fall of 2008, the globe’s longtime economic leader suffered its deepest and
longest economic contraction in 80 years. Its markets were scythed in half, and Washington’s political paralysis spooked investors. Most
distressing were the numbers: annual deficits over $1 trillion, 8.75 million jobs lost, $4-per-gallon gasoline. Given the magnitude of the
economic fall, it’s no surprise that declinism quickly emerged as the time’s chic intellectual pose. Left and right, highbrow and lowbrow,
ideological and pragmatic, historians and futurists—all came to an agreement: the U.S. had a very slim hope of recovering from its self-inflicted
blows. The lion was now a lamb, shorn of aggression and vitality, unable to compete with rivals like China. Much like Japan, which has endured
two decades of stagnation and misery since its real-estate bubble popped in the late 1980s, the U.S. had fallen and couldn’t get up.
As is
frequently the case, however, the conventional wisdom is wrong. The U.S. economy suffered a
wipeout in the Great Recession of 2008–09, much like 1970s icon Steve Austin. Austin, played by Lee Majors, was an astronaut who crashed to
Earth and then was rebuilt with typical American optimism. “We can rebuild him,” the voice-over for the opening of The Six Million Dollar Man
Like the world’s first bionic man, the U.S.
economy has come back—better, stronger, and faster than most analysts expected, and
than most of its peers. In fact, the lows of March 2009 marked the beginning of an unexpected
recovery—not the beginning of an era of irreversible stagnation. The U.S. economy
went from shrinking at a 6.7 percent annual rate in the first quarter of 2009 to
expanding at a 3.8 percent annual rate in the fourth quarter of that year—a
turnaround unprecedented in modern history. The stock market has doubled since
March 2009, while corporate profits and exports have surged to records. The U.S.
economy has regained its 2007 peak, and is now growing at a 3 percent annual clip—a
more rapid pace than any other developed economy. The crucible of the recession forged an economic
intoned. “Better than he was before. Better, stronger, faster.”
structure that is more resistant to shocks than the brittle vessel that shattered in 2008. Meanwhile, Europe continues to grapple with insoluble
the
story of America’s recovery—unsatisfying and problematic as it has been—isn’t a Hollywood tale. Rather, it rests on an
understanding of its core competencies and competitive advantages: attitudes and capabilities
banking and sovereign debt crises, and developing-economy juggernauts like China and Brazil are showing signs of cracking. It’s clear that
that, even in this age of globalization, remain unique. Contrary to the declinists’ view, global growth has not been a zero-sum game for
America’s economy. A rapid, decisive, and sufficiently effective policy response was the precondition for a return to growth. It took the U.S. just
18 months to conduct the aggressive fiscal and monetary actions that Japan waited 12 years to carry out after its credit bubble burst. But
America’s recovery since then has been fueled by a resilient and nimble private sector.
Rather than sit around and wait for salvation, U.S. companies quickly moved to restructure operations and debt. Business bankruptcy filings
spiked from 28,322 in 2007 to 60,837 in 2009—an increase of 115 percent in two years. In 2009 a record 191 U.S. companies, with a combined
financial failure in the U.S. gets worked out much more
quickly than it does elsewhere. GM and Chrysler each spent a mere 40 days in Chapter 11 after filing for bankruptcy in the
$516 billion in debt, defaulted on their bonds. But
spring of 2009. In their brief sojourns in Chapter 11, they ripped up contracts, shucked benefits, lopped off $109 billion in liabilities, and
established new, profitable business models. The third member of the Big Three, Ford, was more impressive—and exemplary. Eschewing a
bailout, Ford ground out a recovery by embracing foreign markets, aggressively cutting costs, investing for growth, and paying down billions of
dollars in debt. After hitting a nadir of $1.59 in February 2009, its stock rallied to $18 in January 2011—an 11-fold rise. By the end of 2011, Ford
had reinstituted its dividend and stood on the cusp of regaining an investment-grade rating. Rather than sink deeper into a financial morass, the
American private sector emerged better: better equipped to meet obligations, to save, to invest, to spend, and, ultimately, to grow. Pretax
A2 Economy – high already 2/3
Gross ’12 cont’d
corporate profits rose from $1.25 trillion in 2008 to $1.8 trillion in 2010, and to $1.94 trillion in 2011. And rather than throw in the towel and
surrender to Chinese competitors, U.S. companies figured out how to get more out of existing resources. From the fourth quarter of 2008 to
the fourth quarter of 2009, productivity rose 5.4 percent. And it rose an impressive 4.1 percent in 2010. At businesses big and small, memos
went out about using fewer paper clips, printing on both sides of the paper, and canceling newspaper subscriptions. Thanks to the work of
efficiency-seeking engineers, UPS squeezed more deliveries out of existing resources by eliminating left turns from trucking routes. The typical
passenger car sold in 2010 averaged 33.9 miles per gallon, up from 30.1 in 2006. Companies that made a business of helping other people save
money thrived during the recession. BigBelly Solar, a startup in Newton, Mass., manufactures solar-powered trash compactors that send text
messages when they’re full. They enable cities and colleges to cut costs on garbage collection by up to 75 percent. Sales of the $4,000 units,
which are made in the U.S., doubled every year between 2008 and 2010.For U.S. companies, focusing on efficiency and productivity has been
the equivalent of a runner strengthening her core. But companies now run farther and faster because of their ability to engage external forces.
the structural forces transforming the global economy are arrayed
against us. But in fact, many of them work in America’s favor. The U.S. remains the
largest, richest, most secure market in the world, full of valuable resources.
Declinists believe that
U.S. economy not in decline
Yetiv 12
(Steve Yetiv, political science professor at Old Dominion University, “8 reasons America is not
in decline,” 2012, http://www.csmonitor.com/Commentary/Opinion/2012/0306/8-reasonsAmerica-is-not-in-decline/US-still-has-most-competitive-major-economy-in-the-world)
1. US still has most competitive major economy in the world. The stakes in the debate on
American decline are big. Exaggerated views of demise can create a self-fulfilling prophecy at
home, encourage global troublemakers, and produce world economic and strategic instability.
Let’s set the record straight. America has had the most competitive major economy in the
world over the past several years, according to the World Economic Forum. Only the small
states of Switzerland, Sweden, Finland, and Singapore sometimes eclipse it. Even the European
Union countries are now looking to America to help them out of their debt crisis, as ironic
as that may sound. 2. US has world’s best entrepreneurs and most Fortune 500 companies. It has
the world’s best entrepreneurs and by far the highest number of Fortune 500 companies. It
remains at the forefront of the technologies of the future, such as biotechnology and
nanotechnology, and has the advantage in cyberspace, even though it has fallen behind in some
other areas, like green technologies.
A2 Economy – high already 3/3
U.S. economy gaining sustenance
Rugaber 12
(Christopher S. Rugaber, AP Economics Writer, “Economy Recovering More Strongly
Than Economists Expected: AP Survey,” March 6, 2012,
http://www.huffingtonpost.com/2012/03/06/economy-recovering-more-stronglyeconomists-expected_n_1323425.html)
WASHINGTON -- The
U.S. economy is improving faster than economists had expected. They now
foresee slightly stronger growth and hiring than they did two months earlier – trends that would help President Barack
Obama's re-election hopes. Those are among the findings of an Associated Press survey late last month of leading economists. The economists
think the unemployment rate will fall from its current 8.3 percent to 8 percent by Election Day. That's better than their 8.4 percent estimate when
surveyed in late December. By
the end of 2013, they predict unemployment will drop to 7.4 percent,
down from their earlier estimate of 7.8 percent, according to the AP Economy Survey. The U.S. economy has
been improving steadily for months. Industrial output jumped in January after surging in December by
the most in five years. Auto sales are booming. Consumer confidence has reached its highest point in a year. Even the housing
market is showing signs of turning around. "The economy is finally starting to gain some steam, with consumers and businesses more optimistic
about prospects in 2012," said Chad Moutray, chief economist at the National Association of Manufacturers. On Friday, the government will
issue the jobs report for February. Economists expect it to show that employers added a net 210,000 jobs and that the unemployment rate
remained 8.3 percent. The AP survey collected the views of two dozen private, corporate and academic economists on a range of indicators.
Among their forecasts: _ Americans will save gradually less and borrow more, reversing a shift toward frugality that followed the financial crisis
and the start of the Great Recession. _ Obama deserves little or no credit for declining unemployment. Only one of the 19 economists who
answered the question said Obama should get "a lot" of credit. They give most of the credit to U.S. consumers, who account for about 70 percent
of economic growth, and businesses. _ The
economy has begun a self-sustaining period in which job
growth is fueling more consumer spending, which should lead to further hiring. _ European
leaders will manage to defuse their continent's debt crisis and prevent a global recession. But the economists think Europe's economy will shrink
for all of 2012. _ The
economy will grow 2.5 percent this year, up from the economists' earlier
forecast of 2.4 percent. In 2011, the economy grew 1.7 percent. The brighter outlook for jobs follows five
straight months of declining unemployment. Employers added more than 200,000 net jobs in both December and January. The
unemployment rate is at its lowest level in nearly three years. One reason the rate has fallen so fast is that
fewer out-of-work Americans have started looking for jobs. People out of work aren't counted by the Labor Department as unemployed unless
they're actively seeking jobs. Many economists have been surprised that the stronger economy hasn't led more people without jobs to start
looking for work. If many more were looking, the unemployment rate would likely be higher. Manufacturers have been hiring more consistently
than other employers. Moutray expects factory output to rise 4 percent this year, better than in 2011. Manufacturers will have to continue hiring
to keep up with demand, he said. That will help lower the unemployment rate to 8 percent by Election Day, he predicts. "Manufacturers are
relatively upbeat about production this year," Moutray said. That will require expanding factories and buying more machinery. "All that plays
into a better year than some people might have been expecting," he added. The
economists forecast that employers will
add nearly 1.9 million jobs by Election Day, up from their December projection of nearly 1.8 million. But Mike
Englund of Action Economics is among those who noted that the declining unemployment is due, in part, to fewer people seeking work. Millions
of those out of work remain too discouraged to start looking again, or, in the case of many young adults, haven't begun to do so. "Most of this
recent drop in the unemployment rate is due to a mass exodus" from the work force, Englund said. The economy still has about 5.5 million fewer
jobs than it did before the recession began in December 2007. Still, the falling unemployment rate appears to be raising the public's view of
Obama's economic stewardship. In an Associated Press-GfK poll last month, 48 percent said they approved of how Obama was handling the
economy, up 9 points from December. And 30 percent of Americans described the economy as "good" – a 15-point jump from December and the
highest level since the AP-GfK poll first asked the question in 2009. The U.S. economy remains under threat from Europe's debt crisis. But those
concerns have eased, the AP survey showed. Several economists credited the European Central Bank's move to provide unlimited low-interest
loans to banks with helping prevent an international crisis "Time fixes all wounds," said Marty Regalia, chief economist at the U.S Chamber of
Commerce. "Europe didn't come apart at the seams, and we
little less likely that it will happen."
haven't fallen into the abyss. Every day ... it becomes a
A2 economy – resilient 1/2
U.S. economy resilient
Robb 2012
(Gregory Robb, Senior Washington Correspondent at MarketWatch, “Geithner: U.S. economy improving,
more resilient,” May 15, 2012, http://articles.marketwatch.com/2012-0515/economy/31706090_1_financial-reform-volcker-rule-treasury-secretary-timothy-geithner)
WASHINGTON (MarketWatch) -- Treasury Secretary Timothy Geithner on Tuesday said the
U.S. economy is gradually getting stronger, with areas of strength broadening. "We are doing a lot
of the really tough work you need to...dig our way out of the mess that caused the crisis
and I think growth now looks more broad-based and resilient," Geithner said at a conference
sponsored by the Peter G. Peterson Foundation. Geithner said J.P. Morgan's $2 billion
trading loss was a failure of risk management. He said it made a "very powerful case for
financial reform - the reforms we have ahead and the reforms we have already put in
place." Geithner said he has not talked to Jamie Dimon since the J.P. Morgan Chase &
Co's (US:jpm) CEO announced the loss late last week. The test of financial reform is to make
sure bank mistakes don't put the economy at risk, Geithner said. "We are going to work very hard
to ensure that these reforms are tough and effective - not just the Volcker rule - but the
broader complement of reforms on capital and liquidity and derivatives markets," he
said.
Economy is resilient—recent disasters prove
Ottawa Citizen 3/29 (Ottawa Citizen, a division of CanWest MediaWorks Publication Inc. March 29,
2011“A resilient economy” l/n)
The world economy has been tested severely recently but it shows amazing resilience. That bodes well
for the future. Revolutions and war in Arab nations, rising oil prices, an earthquake, tsunami and
nuclear woes in Japan, and debt crises in some European nations could easily have collapsed stock
markets and sparked a recession. But, instead, world economies withstood that buffeting, with global
stock markets recovering. The recession that came out of the Debt Crisis of 2007-'08, for all the pain it
caused, had a cleansing effect on the economy, particularly in the U.S. Highflying consumers capped
decades of debt-accumulation with a rush to buy homes at unrealistically high prices. Too much of the
West's capital was being spent on housing, artificially driven up in price by wrongheaded lending
practices. Now the recession has cleared much of that up, at great and rightful cost to the foolish
lenders, but also to borrowers. Fortunately, many of these disasters have worked their way through
the system. U.S. gross domestic product growth is likely to run between three to four per cent, albeit
from a very low place. Sadly, the giant U.S. housing market continues to decline as foreclosures drag
down the sector. Even with problems in housing, the U.S. economy, the largest in the world, continues
to recover. If housing prices reach bottom, and normal growth in that sector returns, that could take a
terrible drag off the U.S. economy and help the world recover. That will happen -it just depends on how
far the decline has yet to go and how long that will take.
A2 economy – resilient 2/2
Even if we hit a recession, fed and treasury policy would check – Functionally
unlimited funds.
Isidore – 9/30/08 (Chris, CNN Money, “No bailout? Here's Plan B”,
http://money.cnn.com/2008/09/30/news/economy/plan_b/?postversion=2008093016)
after the
defeat of a $700 billion financial rescue bill, talk is growing about alternative
steps
Among the proposals
are
ease the capital burdens
on banks; make more FDIC insurance available to bank customers; and cut short-term interest rates
the first changes came
SEC] and Federal Accounting Standards Board issued new
guidance to companies about how to value securities when the market for them vanish
Banks and securities firms have written down $500 billion worth of mortgagebacked securities as home prices fell and foreclosures rose
when the market for
such securities dries up, companies can value them based on their estimated future cash flow
A day
House's surprise
louder
that could help battered credit markets and stave off broader problems in the economy.
policymakers
government
discussing: Change rules to
. "Every
little bit helps," said Lyle Gramley, a former Federal Reserve governor who is now with policy research firm Stanford Group. "When you're in a situation we're in now, you use any tools that might work." In fact,
Tuesday afternoon in announcements by two principal agencies. The Securities and Exchange Commission [
late
the
. The issue - how to put a value on assets
that nobody wanted to buy - is central to the credit crisis.
. According to the new guidance issued Tuesday,
. Some experts blame
the previous rules, known as mark-to-market, for the credit crisis. "The SEC has destroyed about $500 billion of capital by their continued insistence that mortg age-backed securities be valued at market value when there is no market," said William Isaac, a former chairman of the
FDIC. "It's way below their economic value. And because banks essentially lend $10 for every dollar of capital they have, the y've essentially destroyed $5 trillion in lending capacity." But others argue the accounting change will come at a cost. They say without those strict rules,
investors would be more reluctant to invest in banks - and make it even tougher for the banks to attract new capital. "Does that make you less attractive as a public company? Abso lutely," said Art Hogan, chief market analyst at Jefferies & Co. The SEC wasn't the only regulator
A temporary broadening of the FDIC's guarantee will
busy taking action on Tuesday. The Federal Deposit Insurance Corp. proposed raising the cap on bank deposits insured by the FDIC. "
provide
some additional needed
confidence
in the marketplace," said Sheila Bair, FDIC chairman. Presidential candidates Barack Obama and John McCain had called for raising the limits earlier in the day. The current limit - $100,000 in most
Raising the cap could stem a potential run on
deposits by
businesses, who fear losing their money. Such fears led to the collapse of
Washington Mutual
and Wachovia Bank
Some others: Change federal requirements that force banks to keep a certain level
of cash on hand for every dollar they lend out. Give banks the chance to exchange loan notes for FDIC
notes
allowing the banks more flexibility
Purchase
mortgage-backed securities
issued by finance giants Fannie Mae and Freddie Mac. Extend limits on short sales of financial sector
stocks. Cut the fed funds rate
Clearly, the
bailout package
is not the only way to unfreeze troubled credit
markets.
instances - has been unchanged since 1980 despite inflation. It protected as much as 82% of deposits in 1991 but today it only covers 63%.
bank customers, particularly
(WM, Fortune 500)
(WB, Fortune 500) in the past week. Kicking the tires on other fixes The SEC and FDIC changes announced Tuesday are not the only ideas being
discussed in Washington and among economists.
, which be more valuable and
to make loans.
on a massive scale
- the Federal Reserve's target for short-term lending - perhaps all the way to zero, or in coordination with rate cuts by other central banks around the globe.
controversial $700 billion
- which would give the Treasury Secretary authority to buy distressed assets -
A2 economy – no war
Economic decline doesn’t cause war – Their chain of causation is backwards.
Ferguson 06 (Niall, prof. of history, Foreign Affairs, “The Next War of the World”, lexis)
modern historiography links the Great Depression to
World War II that simple story leaves too much out. Nazi Germany started the war in Europe only
after its economy had recovered. Not all the countries affected by the Great Depression were taken
over by fascist regimes, nor did all such regimes start wars
no general relationship between
economics and conflict is discernible
Some wars came after
growth, others were the
causes rather than the consequences of economic catastrophe, and some severe economic crises were
not followed by wars.
Nor can economic crises explain the bloodshed. What may be the most familiar causal chain in
the rise of fascism and the outbreak of
. But
of aggression. In fact,
for the century as a whole.
periods of
***spending answers***
A2 spending good – faulty economics 1/2
Government spending fails, hurts the economy in trying to help
Barron 10
[Patrick Barron, teaches Austrian economics at University of Iowa, “C + I + G = Baloney”, 6/29/2010,
https://mises.org/daily/4482]
The key fallacy embedded in Keynesian economics and the GNP equation is the idea that government spending adds
to an economy's health. In reality, the opposite is true: government spending subtracts from an economy's health.
The real economy is the private economy — there is no other. Government spending must come out of the
private economy.¶ In olden days, no one would have accepted the argument that the king could help his
nation's economy by increasing his spending. The king's spending was funded by taxes from the people. It is the
same today, notwithstanding the eyewash of central bank manipulations of its manufactured paper money.¶
All government spending is parasitical. The less government we have the better off we are. No one would claim
that an increase in crime (thus making more police necessary) or an increase in international tensions
(making a larger military necessary) would be good for an economy. We are all better off when people are
honest and other nations are friendly so that we do not need to provide resources for more police and a larger army.
We would much prefer that our sons and daughters produce goods and services that improve the quality of our lives
rather than standing sentry on America's frontiers at our expense. ¶ Government programs that do not provide
essential security services are especially illogical. For example, paying people not to work, which is the consequence
of unemployment insurance, must come out of funds that would have otherwise employed people. Indeed, all
government welfare programs are funded by the private sector and do not, as the Keynesian equation might
imply, add to the nation's wealth. The funds for these programs come out of the private economy and further
stifle its ability to increase the nation's wealth by reducing capital formation.
White House Keynesian stimulus fails – highway spending trades off with
other jobs
Foster, PhD, 5/6/12
J.D.-; “Wapo Admitting Keynesian Stimulus Failed?”; Heritage;
http://blog.heritage.org/2012/03/06/wapo-admitting-keynesian-stimulus-failed/. DS
Does unprecedented d0eficit-spending such as on highways stimulate the economy? For the last few years, some have argued it
could. Some have argued it might. Some have argued it would if done right. We have consistently argued that deficit spending on
highways or anything else intended to lift aggregate demand, and therefore jobs, must and would fail. The economic evidence that
we were right has now been joined by the illustrious trio of The Washington Post, the Associated Press, and the esteemed Alice Rivlin,
former director of the Congressional Budget Office and the Office of Management and Budget. Monday’s edition of the Post carries a
story sourced to the Associated Press entitled, “Highway bills pitched as by lawmakers as job creators, but are they really? Economists
say no.” Notice especially the subject of the piece: federal highway spending. If ever there was a sympathetic topic for stimulus, it is
infrastructure spending, especially highway funding. Remember, these were some of President Obama’s “shovel-ready” projects that
turned out to be not so shovel ready, as he later admitted. So what went wrong? Why is this not short-term stimulus? The widely
respected Rivlin explained it clearly and succinctly: “Investments in infrastructure, if well designed, should be viewed as investments in
future productivity growth.” Exactly right—future productivity growth. She went on to say that if investments in infrastructure “speed
the delivery of goods and people, they will certainly do that. They will also create jobs, but not necessarily more jobs than the same
money spent in other ways.” Exactly right—a dollar spent is a dollar spent. A job gained here, a job lost there. This speaks to a
longstanding flaw of highway spending arguments. Proponents argue that this spending creates tens of thousands of jobs, and they
are half right. The other half is the tens of thousands of jobs not created (or saved) by shifting spending to highways from other
areas in the economy. The valid argument about infrastructure spending is: If done right, it will lift future productivity growth,
not current job growth. The central failing—the essential fiscal alchemy of Keynesian stimulus—is the belief that government can
increase total spending in the economy by borrowing and spending. What Keynesians ignore is that we have financial markets
whose job in good times and bad is first and foremost to shift funds from savers to investors, from those who have money they do
not wish to spend today to those who have a need to borrow to spend as much as they’d like, whether on new business
equipment, a home, or a car. There are no vast sums of “excess funds” just sitting around in bank tellers’ drawers waiting for
government to borrow and spend them. Government borrowing means less money available to the private sector to spend. So
government deficit spending goes up, and dollar-for-dollar private spending goes down. America’s resources are generally
speaking spent less wisely, and the federal debt is unequivocally higher. If past is prologue, the current infatuation with
Keynesian deficit spending as stimulus will fade, just as it always has in the past, in this country as elsewhere. Perhaps this simple
WaPo article marks the beginning of the end for the latest incarnation of this fiscal folly.
A2 spending good – faulty economics 2/2
The NIB is useless – wasteful spending, jobs, Obama strategy, state manipulation
Yost, staff columnist for The Tech 9/20/11
Keith-;“Opinion: No national infrastructure investment bank: Infrastructure investment is a state
responsibility; STAFF COLUMNIST; September 20, 2011; http://tech.mit.edu/V131/N38/yost.html
Last week, President Obama unveiled a $447 billion spending plan. Notice I say “spending plan,” rather than “stimulus plan” or “jobs
plan,” because there is a difference. None of the plan’s components, which consist of roughly $250 billion in payroll tax cuts, $60
billion in unemployment insurance, and $140 billion to fund infrastructure (most of it going to a national infrastructure
investment bank), can be considered significantly stimulative, and without stimulus, we’re unlikely to see many new jobs. The
plan’s unemployment benefits and tax cuts are largely extensions of existing measures — our economic situation would be much
worse if the cuts and benefits were allowed to expire, but these half-measures are not going to push us out of our current,
miserable trajectory. And the infrastructure bank promises very little spending in the short term; it’s not an institution tasked
with finding shovel-ready, stimulative projects, even if such things existed. This is quite plainly a spending plan in which Obama
has tied a pet project that he thinks deserves money (the infrastructure bank) to something that Republicans find fairly
unobjectionable. As a political matter, the future of the plan seems pretty straightforward: Republicans will strip out the infrastructure
bits and pass the rest, judging (correctly) that the American public isn’t going to assign blame for the whole economy to the GOP just
because they blocked one of Obama’s minor economic proposals. The president probably even prefers it this way because an actual
infrastructure bank wouldn’t do much in the short term to help Obama keep his job, but the idea of an infrastructure bank
could prove useful on the campaign trail. That leaves just one question: who is right here? Is an infrastructure bank an idea whose
time has come, or is it a dud? At first glance, a national campaign to invest in infrastructure isn’t a bad proposition. The returns to
investment on infrastructure aren’t very impressive, but with the government able to borrow money at two percent interest, and
with labor and materials costs at extreme lows, it doesn’t take a very high return to justify infrastructure spending. On deeper
inspection however, a national infrastructure bank is a fatally flawed idea, for one simple reason: forcing the citizens of Texas to
pay for a high speed rail line from San Diego to Sacramento is bad government. It invites corruption, pork barrel politics, and
misallocation of our society’s resources. The citizens of, say, Ohio are and will always be in a better position to decide whether it is
worth the money to repair a bridge or school in their state. Offering to let them pay for their projects with someone else’s money is
not going to lead to better decision-making— instead, it will lead states to cut their own infrastructure spending and turn their
beggars cup to the federal government. It will incentivize states to represent their infrastructure as worse than it actually is, and
pretend that solutions are cheaper than they actually are. And because it isn’t their money at stake, states will have even less
inclination than usual to make sure that the projects are managed correctly. The real key to a state’s economic success won’t be the
wise decision-making of its leaders, it will be its ability to lobby the federal government for special treatment and trade favors with the
party in power. Perhaps in a few instances, investment in infrastructure at the national level makes sense. Air traffic control, or
an interstate network make sense as matters for the national government to manage. But bridges, schools, high speed rail lines,
and the vast majority of the projects Obama touts as within the purview of his national infrastructure campaign are best
managed at the state or local level. It’s a conclusion so obvious that the idea of national control raises immediate suspicion. Does
Obama plan to use the bank to bestow patronage on his supporters (particularly labor unions)? Or did he really manage to forget that
state governments already have the power to levy taxes and make repairs? Democratic activists are thrilled with Obama’s supposedly
new “toughness.” But getting tough is only a good strategy if you’ve got an idea that’s actually worth fighting for. Two weeks from
now, every leading Republican is going to have worked out the obvious counter-argument to a national infrastructure bank, and two
weeks after that they’re going to have integrated the bank into their stump speeches as yet another example of intellectually bankrupt
federal overreach.
Won’t solve short term economy
Mallet et al. 11 (William J. Mallet, Specialist in Transportation Policy, Steven Maguire a specialist in
Public Finance, Kevin R. Kosar is an analyst in American Government for the CRS, December 14 2011,
Congressional Research Service, “National Infrastructure Bank: Overview and Current Legislation”,
http://www.fas.org/sgp/crs/misc/R42115.pdf)
Although a national infrastructure bank might help accelerate projects over the long term, it is unlikely
to be able to provide financial assistance immediately upon enactment. In several infrastructure bank
proposals (e.g., S. 652 and S. 936), officials must be nominated by the President and approved by the
Senate. The bank will also need time to hire staff, write regulations, send out requests for financing
proposals, and complete the necessary tasks that a new organization must accomplish. This period is
likely to be measured in years, not months. The example of the TIFIA program may be instructive. TIFIA
was enacted in June 1998. TIFIA regulations were published June 2000, and the first TIFIA loans were
made the same month.45 However, according to DOT, it was not until FY2010 that demand for TIFIA
assistance exceeded its budgetary authority.46
A2 Spending now – already high
Transportation spending levels are already high
O’Toole 10
[Randal O’Toole, policy analyst, “Fixing Transit: The Case for Privatization”, 11/10/2010,
www.cato.org/pubs/pas/PA670.pdf]
Ironically, the real problem with public transit is that it has too much money. The addition of tax
dollars to transit operations led transit agencies to buy buses and other equipment that are bigger
than they need, to build rail lines and other high-cost forms of transit when lower-cost systems
would work as well, to extend service to remote areas where there is little demand for transit, and
to offer overly generous contracts to politically powerful unions.
Privatizing transit would solve these problems. Private transit operators would have powerful
incentives to increase productivity, maintain transit equipment, and avoid transit systems that
require expensive infrastructure and heavy debts. While private transit systems would not be immune
to recessions, they would respond to recessions by cutting the least-necessary expenses. In contrast,
public agencies often employ the “Washington Monument Syndrome” strategy: they threaten to cut
highly visible programs as a tactic to persuade legislators to increase appropriations or dedicate
more taxes to the agency, such as New York MTA’s proposal to eliminate dis- counted fares for
students.
***infrastructure answers***
A2 infrastructure – red tape turn
The NIB takes away from existing projects
Duncan 11 (John Duncan, Tennessee Congressman, “National Infrastructure Bank Would Create More Red Tape & Federal Bureaucracy”,
October 12, 2011, http://transportation.house.gov/news/PRArticle.aspx?NewsID=1421, PS)
“I, for one, do
not support setting up a new bureaucracy in Washington where political appointees would decide which
Rep. John J. Duncan, Jr. (R-TN), Chairman of
the Highways and Transit Subcommittee. “That is why Congress already established the State Infrastructure Bank
program. Current law allows a state to use their Federal-aid funding to capitalize a State Infrastructure Bank and provide loans and loan
guarantees to appropriate transportation projects that the state deems most important. The Transportation Infrastructure Finance and Innovation
Act program, or TIFIA, was established in 1998 to provide loans and loan guarantees to surface transportation projects. In
transportation projects are the most worthy to receive a Federal loan,” said U.S.
fact, the TIFIA program is so popular it received 14 times the amount of project funding requests in FY11 than the program has available to
distribute. Why not give these established programs more funding in order for them to reach their full
potential? This proposal is simply just another distraction as Congress pushes for a long-term surface transportation
reauthorization bill. The Administration should be focused on helping Congress pass this much overdue legislation and give the states some longterm funding certainty that a National Infrastructure Bank would most certainly not accomplish.”
NIB causes bureaucratic redundancy with current financing mechanisms
causing backlog and uncertainty
Utt 11, Ronald Utt is a Senior Fellow at Heritage, The Limited Benefits of a National Infrastructure Bank,
http://www.heritage.org/research/testimony/2011/10/the-limited-beneftis-of-a-nationalinfrastructure-bank
The Checkered History of Federal Finance Facilities Would It Improve Overall Federal Transportation Policy? Senator Inhofe makes a very good
point by wondering about what the value added would be of creating another federal transportation program (independent of the current one
under some proposals) when you already have one that has been up and running for more than half a century and, for the most part, has
served the nation well. More specific to some of the infrastructure bank proposals is the emphasis on loans and loan guarantees as opposed to
grants, suggesting that the bank will somehow be paid back—a notion about which, as we have seen, we have reason to be skeptical.
Nonetheless, if credit availability is at issue, then a quick review of existing transportation infrastructure
federal credit programs reveals that there are plenty of attractive credit programs including the U.S.
Department of Transportation (USDOT) Transportation Infrastructure Finance and Innovation loan
program (TIFIA), Private Activity Bonds, and State/Municipal/public authority Revenue Bonds.[3] For
passenger and freight rail projects, there is also the USDOT’s Rail Rehabilitation and Improvement
Financing (RFFI) program. For these concerns, there are questions but not yet any answers. If grants
were to be provided by the new bank, how would they be different from—or better than—those already
provided through the existing mechanisms in USDOT and the highway program ? If current levels of credit availability for
existing federal transportation credit programs are deemed to be insufficient by some, why not propose that these existing channels be
improved and/or expanded? If spending is thought to be deficient, why not simply provide more grants through the existing mechanism rather
than going through the costly and complicated process of setting up and operating a new federal transportation entity, which President
Obama’s budget estimates would cost upwards of $270 million to create and staff?[4] In this era of fiscal austerity and yawning budget deficits,
wouldn’t there be better uses for this money than a redundant bureaucracy? Are the banks’ independent
status, separate board, funding, and approval process designed to circumvent the existing role that state
DOTs and governors have in the allocation of transportation resources? Would its independent status and separate
board of directors thwart congressional oversight? I don’t think a satisfactory answer has been provided to any of these questions, and
certainly none of the existing proposals have addressed them. But they are certainly valid concerns, and Congress should seek answers to them
as Members contemplate these many infrastructure bank proposals.
Red tape extensions
The NIB only adds red tape and all of its functions are covered already.
Mica 11 (John Mica, Florida Congressman, Chairman of the Transportation and Infrastructure Committee in the U.S. House of
Representatives, “National Infrastructure Bank Would Create More Red Tape & Federal Bureaucracy”, October 12, 2011,
http://transportation.house.gov/news/PRArticle.aspx?NewsID=1421, PS)
“We must use every responsible mechanism possible to move projects and expand our capacity to finance infrastructure maintenance and
improvements, but a National Infrastructure Bank is dead on arrival in Congress,” said U.S. Rep. John L. Mica (R-FL), Chairman of the
Transportation and Infrastructure Committee. “ There are several reasons for this. One is that we
do not need to create more
federal bureaucracy. In fact, with over 100 separate federal surface transportation programs, we need
less bureaucracy. The federal government also has existing financing programs that serve the same
purpose as a National Infrastructure Bank, such as TIFIA, RRIF and others, that we can improve and strengthen.
Another reason a national bank is DOA is because there is already such a bank structure in place at the state level. Thirty-three state
infrastructure banks already exist, and we can ensure financing and build upon this foundation without creating a new level of federal
bureaucracy.
If the Administration’s goal is to get people to work immediately, a National Infrastructure
Bank that will require more than a year to create and $270 million to run is not the answer. That is funding
that should be used for infrastructure, but would instead be used to create more red tape. Unfortunately, the
Administration still hasn’t learned that ‘shovel ready’ has become a national joke. Yesterday, the President announced he would expedite 14
infrastructure projects, but this plan only pushes these projects to the front of the line with current red tape and rules, while it pushes back or
stalls hundreds of other projects pending federal approval. We must expedite the review process for all projects, not just a handful.”
It’ll be mismanaged
Utt 11, Ronald Utt is a Senior Fellow at Heritage, The Limited Benefits of a National Infrastructure Bank,
http://www.heritage.org/research/testimony/2011/10/the-limited-beneftis-of-a-nationalinfrastructure-bank
The Checkered History of Federal Finance Facilities Previous sections have already touched on the
management challenges confronting any of these banks. If these banks are allowed to borrow on their
own, or if they are funded by a large, one-time appropriation that can be leveraged into more debt and
loan guarantees, it seems that Congress and the President would have little say in what they did and
how they did it. Indeed, the nation has already experienced a couple of such incidents, and they are
commonly referred to as Fannie Mae and Freddie Mac. All of the bills to create infrastructure banks
include many pages of exhaustive detail on the prospective management structure, a pseudo-corporate
board, and its duties. Degrees of independence vary from one proposal to another, but the greater the
independence, the more likely it is that the bank may wander away from the changed priorities of future
Congresses and Presidents and instead pursue opportunities that are not necessarily in the public
interest. In a democratic society where voters periodically get to pick the people and policies that
govern them, it might not be appropriate to have entities supported by taxpayers that are not
responsive to the voters. There is also the question of the extent to which some of these infrastructure
bank proposals may be designed also to circumvent existing budget controls and spending caps, as well
as ongoing oversight. How each of these proposals might be scored is beyond the scope of this
testimony, but it is certainly an issue that Congress should carefully review.
Red tape extensions
NIB structurally guarantees delays
Utt 11, Ronald Utt is a Senior Fellow at Heritage, The Limited Benefits of a National Infrastructure Bank,
http://www.heritage.org/research/testimony/2011/10/the-limited-beneftis-of-a-nationalinfrastructure-bank
The Checkered History of Federal Finance Facilities
For some advocates—especially the President—these banks are seen as mechanisms to propel the economy forward
out of the lingering recession into an era of greater prosperity and more jobs. Sadly, all evidence
indicates that this just isn’t so. As far back as 1983, the General Accounting Office (now the Government
Accountability Office) reviewed an earlier infrastructure-based stimulus program and observed that
although the program was enacted during the worst of the recession, “implementation of the act was
not effective and timely in relieving the high unemployment caused by the recession.” Specifically, the GAO
found that: Funds were spent slowly and relatively few jobs were created when most needed in the
economy. Also, from its review of projects and available data, the GAO found that (1) unemployed persons received a relatively small
proportion of the jobs provided, and (2) project officials’ efforts to provide employment opportunities to the unemployed ranged from no
effort being made to working closely with state employment agencies to locate unemployed persons.[5] Infrastructure-based stimulus
programs have been a disappointment, in large part because of time delays in getting programs underway, projects identified and approved,
and money spent. More recently, supporters of the American Recovery and Reinvestment Act (ARRA)
claimed that it would focus
on shovel-ready projects, but USDOT recently reported to this committee that as of July 2011—two and
a half years after the enactment of the ARRA—just 61 percent of the authorized transportation funds
had been spent. Perhaps contributing to this is the fact that the Federal Railroad Administration required 12 months to set up a
mechanism to receive, review, and approve rail infrastructure projects authorized by the ARRA. In both of these cases, the stimulus funds were
being spent through existing federal, state, and local channels by departments, managers, and employees with many years of experience in the
project approval business. In large part, these delays are not due to any particular institutional failing but simply to the time it takes to establish
guidelines and rules for project submission, for outside parties to complete the request, and for USDOT to review the many requests submitted
and pick the most promising, perhaps with modifications, and fulfill the contractual details of awarding the contract. Once the award is made to
state and local entities, they in turn must draw up the RFP (and perhaps produce detailed engineering plans as appropriate), put the contract
out for bid, allow sufficient time for contractors to prepare bids, review submitted bids, and finally accept the winning contract. It is at this
point that money can be spent on the project, and the time that elapses from the beginning to the end of the beginning can easily exceed a
year or more. In the case of an infrastructure bank, such delays will be much longer—perhaps even double that described above. In the case of
the above example, the assumption is that the newly authorized stimulus money would flow through an institutional “infrastructure” of wellestablished channels staffed by experienced people. In the case of the proposed infrastructure banks, no such administrative structure exists,
and one will have to be created from scratch once the enabling legislation is enacted. In the case of some of the proposals, this creation
process could take a while. President Obama’s most recent plan, for example, first requires the selection, recommendation, and Senate
confirmation of a seven-person bipartisan board appointed by the President. The President will also appoint, and the Senate confirm, a Chief
Executive Officer who in turn will select the bank’s senior officers—Chief Financial Officer, Chief Risk Officer, Chief Compliance Officer, General
Counsel, Chief Operation Officer, and Chief Lending Officer—subject to board approval. The Chief Lending Officer will be responsible “for all
functions relating to the development of project pipelines, the financial structuring of projects, the selection of infrastructure projects to be
reviewed by the board, and related functions.” So once all of this administrative effort is completed and the bank is ready to go, then the
process of fulfillment, as described in the paragraph just prior to the preceding paragraph, would then be in effect. As is obvious, dependence
upon this prospective bank will further delay the time in which the project money would be spent, but in the process, it would also incur
substantial administrative expenses that might better be used for actual infrastructure repair and investment.
Red tape extensions
Every empiric goes neg
Powell 10, Jim Powell is a senior Fellow at the Cato Institute and author of the forthcoming What's
Likely To Happen When Government Goes Broke, http://www.cato.org/publications/commentary/justanother-government-pyramid
Now Obama wants to spend another $50 billion of taxpayers' money, so that even more people will be on public payrolls. That's his idea of
Obama envisions a government-run "infrastructure bank" to overhaul America's transportation
networks. This sounds like the kind of grandiose project politicians love to brag about — the modern equivalent of pyramids.
They cost a fortune, they look great, they increase the number of government employees but do little if
anything for living standards. When Obama visited Egypt last year, he said the pyramids were "awe-inspiring." Apparently he liked
the idea of having laborers move millions of tons of rocks and arrange them in big piles to honor their rulers, the pharaohs. We can get an
idea what to expect from Obama's latest scheme by pondering more recent pyramid-type projects.
During the stagflation of the 1970s, New York City's economy tanked, and state development officials
approved a new 675,000 square foot facility that became the Javits Convention Center. The New York
Times reported on "the shoddy work and high bills of politically connected consultants and contractors.
Complicated by a bid-rigging scandal and structural problems, the project fell two years behind schedule
and was $111 million over budget." Since then, notorious work rules have required Javits exhibitors to pay 40 union members
when only three or four might be needed for a job. Many convention organizers have taken their business elsewhere. In 1985, Boston's
"Big Dig" was estimated to cost $2.6 billion, and it was scheduled to be finished by 1998. Taxpayers
around the country picked up most of the tab. The project, that re-routed eight-lane Interstate 93
through a 3.5-mile long tunnel in an effort to reduce traffic congestion, was years late. The project
ended up costing $14.6 billion, and interest on debt reportedly will push the total to $22 billion.
According to the Boston Globe, the project improved downtown traffic flows and induced people to
drive more. Unintended consequence: "Many motorists going to and from the suburbs at peak rush
hours are spending more time stuck in traffic, not less." Although Denver has a population of only about 2 million, local
"stimulus."
politicians convinced themselves they needed to build the country's largest commercial airport, and it covers 53 square miles of land — twice
the size of Manhattan. Financed by federal megabucks, Denver International Airport opened on February 28, 1995, 16 months behind
schedule. The tab turned out to be $5.3 billion — 250 percent more than officials projected. It was intended to serve as a hub for three airlines,
but it ended up serving mainly one, and there have been about 40 percent fewer passengers than officials projected. How has government
done with something more modest like a mail sorting facility? In the early 1990s, the U.S. Postal Service authorized spending $199.7 million for
a new Main Post Office in Chicago. Because of poor planning and other problems, the project eventually cost $332.9 million. The Postal Service
subsequently acknowledged that despite all the money spent on the Main Post Office, Chicago suffers from the slowest mail delivery of any
major U.S. city. Or how about something really simple such as a visitor center? Members of Congress caught grandiose fever and approved a
proposal for the Capitol Visitors Center. Initially budgeted at $71 million, this became a $621 million, 580,000 square foot shrine to spending three-quarters the size of the U.S. Capitol itself. It opened in December 2008 and will appeal to everyone who enjoys what the Washington Post
calls "slick pomposity." The latest case of political pyramid-building is the Robert F. Kennedy Community schools complex in Los Angeles, the
most costly public school in U.S. history. Los Angeles officials authorized the $578 million cost that undoubtedly contributed to the school
district's $640 million budget deficit, forcing the district to lay off 3,000 teachers. Don't expect all the money to improve education, though,
since the district has some of the worst test scores and lowest graduation rates in the United States. By now, we ought to know that when a
politician starts touting yet another grandiose spending scheme, we must grab our wallets and run away as fast as we can.
A2 pick good projects 1/2
Bureaucratic capital accumulation means no maintenance, focus is on what
gets them promoted not what helps the public, decision just as political as if it
were done through congress
Bratland 09
[John Brätland, Economist with the US Department of the Interior, Ph. D. “Capital Concepts As Insights
Into Neglect of Public Infrastructure”, 7/3/2009, mises.org/journals/scholar/bratland9.pdf]
In light of the disparate interests of the respective constituencies with whom the bureaucrat must
deal, the bureaucrat must be aware of tradeoffs in terms of how these metaphorical capital goods can
be employed. These tradeoffs are essentially subjective in the bureaucrats mind and necessarily
reflect genuine subjective uncertainty as his understanding of the future evolves. However, at any
particular moment in time, larger budgets can serve several complementary longer-term purposes
in terms of dealing with these respective constituencies. Larger budgets accommodate the ambitions
of subordinate bureau personnel by offering the prospect of greater opportunities for promotion
and for career enhancements.31
Also, larger budgets may serve the aspirations of both the appointing official to whom the
bureaucrat reports and sponsoring legislators that may want the bureau to embark upon projects
with higher public profiles than what may be seen as the more mundane concerns of infrastructure
maintenance.
To the extent that the bureaucrat is able to be instrumental in providing the bureau with larger budgets,
appointing superiors, sponsoring legislators and bureau personnel are more likely to applaud the
bureaucrat’s performance. In a political sense, achieving a larger budget for the bureau may, in some
cases, be more important than the way in which funds are actually spent. The effort expended to
enhance this capital good (budget) would generally augur well for the bureaucrat’s reputation and may increase the
control (degree of latitude) that he may enjoy in future undertakings.32
If successful in such endeavors, the bureaucrat should be able to maintain or enhance his ‘capital’ as represented by
his longer terms career objectives. But, one must ask, with such success, what is the likelihood that infrastructure
maintenance will be a prominent concern as the bureaucrat plans his action? The bureaucrat must be sensitive
to the general public in considering programs of infrastructure maintenance that could be undertaken
by the bureau. Infrastructure neglect could conceivably draw unfavorable press affecting the bureaucrat’s
reputation among the general public. However, unless the affected infrastructure involves roads or bridges, public
reaction to neglect is likely to be tepid or nonexistent.
Clearly larger government and expanding public budgets do not necessarily imply the availability of
more resources for maintenance of depreciating infrastructure. If the relative neglect of infrastructure
occurs without significant negative feedback from the public, the bureaucrat may be better served by
pursuing ventures that are more likely to draw favorable reaction from appointing officials and sponsoring
legislators. For example, to the extent that the bureaucrat is successful in achieving larger budgets for a
bureau, it is not unlikely that the additional resources will be allocated to the building of some type
of new infrastructure facilities as opposed to maintenance of existing facilities. Hence, the actions
and goals of a public official in employing the metaphorical capital goods of reputation and control
may well be at odds with maintenance of existing public infrastructure. In other words, new
infrastructure may offer the bureaucrat more reputation-enhancing ways of dealing with the respective
constituencies mentioned. Projects aimed at the maintenance of existing public infrastructure may be
less ‘newsworthy’ meaning that there is less political leverage than would be the case with new
projects. If the bureaucrat were to throw his support behind the new project, he is more likely to be cast
A2 pick good projects 2/2
Bratland ‘9 cont’d
in a more prominent and more favorable public light. This attention most generally translates into
enhanced reputation and possibly greater control.
Moreover, bureaucrats who rank projects will not necessarily be making these decisions in the name
of the benefits that may accrue to the affected public. While new infrastructure projects find favor with
the constituencies that the bureaucrat must please, these projects tend to crowd out the possibility of
funding for maintenance of existing infrastructure. Moreover, in their planning, public officials are likely
to employ a planning horizon that may not be congruent with the realization of any benefits afforded by
publicly supported maintenance projects. More generally, the money spent for these projects will not
necessarily reflect any attempt at what some may view as a ‘rational reckoning’ of collective need.33
In undertaking actions with respect to infrastructure expenditures, ‘efficiency in resource
allocation.’ may not be a prominent consideration. The bureaucrat may not necessarily be particularly
concerned with the net social benefits of one project as opposed to another competing project.
Opportunity cost will not be reckoned in terms of foregone or relinquished ‘social benefits’ that may be
associated with committing to one project infrastructure project as opposed to another. Rather, the
bureaucrat will focus on the way in which his reputation and control appear to be affected by
choosing to support one infrastructure project over a competing alternative. He will reckon benefits
in terms of his own gain as may be reflected in his future career prospects, both in or out of government.
For example, he may quantify the ‘benefits’ in terms of the likelihood of winning a sought-after
promotion. Or, the bureaucrat may have longer-term aspirations to a particular position out of government
service. But whatever the nature of the bureaucrat’s decision, he will always attempt to explain his
actions in terms of the project’s greater benefit to the community.34 However his real unspoken
motives will be centered upon the advancement of his professional career.
***competitiveness answers***
A2 Competitiveness – NIB fails
NIB will fail, will kill competitiveness through outsourcing
John Ellis, July 12, 2011 “The Problem With Obama’s National Infrastructure Bank,”Business Insider
http://articles.businessinsider.com/2011-07-12/politics/30008222_1_chinese-steel-nationalinfrastructure-bank-bridges
The idea of stimulus incorporated in the standard economic models is that it will create demand for
goods and services produced in America and thereby drive investment in new factories and jobs to
produce more of those goods and services. The difficulty is that we do not want to stimulate a lot more
construction or finance (those were the bubbles that collapsed after all), and greater stimulus to create
demand for things we largely import does not drive new investment or creation of new jobs in America. It only
increases our debt. What is needed is not just demand in the American economy, but demand that results in
domestic production and that does not increase domestic or international debt.
Think about this in the wake of the recent New York Times article reporting on the new Oakland Bay Bridge being made
in and imported from China. Building infrastructure like bridges is a time-honored way of creating demand in the economy
that creates jobs. Indeed, just this past weekend President Obama called for creation of an Infrastructure Bank that would enable a
dramatic ratcheting up of U.S. investment in critical infrastructure. It's a good idea and one that I, along with others, have long
promoted. But if the decision of the state of California to have the main structural elements of the Oakland
Bay Bridge made in China is a harbinger of things to come, then an Infrastructure Bank is likely to
create more jobs in Asia than in the United States.
No doubt former Governor Arnold Schwarzenegger and his cabinet thought they would save about $400
million on steel by buying the bridge in China because Chinese steel production has been heavily
subsidized and China's government manages its yuan to be artificially undervalued versus the dollar. But
what they didn't consider was that those subsidies tend to make U.S.-based production uncompetitive
and not only put American workers out of jobs but exert downward pressure on wages generally while
eroding critical investments in equipment and human skills, reducing state, municipal, and federal tax
revenues, and contributing to the shrinkage of the national educational base. No one in California took a look
at even the whole state picture, let alone the national picture, to determine whether buying a bridge in China was really going to be a
net gain for the state (as it turns out, in the past two years the price of Chinese steel has risen much faster than that of U.S. steel so
that even the initially projected savings are unlikely to be realized). Even worse, no one at the federal level of the U.S.
government has any responsibility for evaluating the net impact of these kinds of deals or for reducing
the leakage of stimulus spending abroad and maximizing the domestic production impact of
government spending.
A2 Competitiveness – false theory
Competitiveness is a myth – it has no bearing on a country’s leadership ability
or economic growth***
Paul Krugman, Professor of Economics and International Affairs Woodrow Wilson School, Princeton
University, June 1994. http://www.pkarchive.org/trade/MythCompetitiveness.html
The rhetoric of competitiveness--the view that, in the words of President Clinton, each nation is "like a big
corporation competing in the global marketplace"—has become pervasive among opinion leaders throughout
the world. People who believe themselves to be sophisticated about the subject take it for granted that the
economic problem facing any modern nation is essentially our struggle to compete in world markets--that the United States and Japan are
competitors in the same way that Coca-Cola and Pepsi are. Every few months a new bestseller warns the American public of the dire
consequences of losing the "race" for the twenty-first century. A whole industry of councils on competitiveness, "geo-economists," and
managed-trade theorists has sprung up in Washington. Many of these people—including health-policy guru Ira Magaziner, Council of Economic
Advisors Chair Laura D' Andrea Tyson, and Labor Secretary Robert Reich--are now in the highest reaches of the Clinton Administration
formulating economic and trade policy for the United States.
But the idea that a country's economic fortunes are
largely determined by its success on world markets is a hypothesis, not a necessary truth; and as a
practical, empirical matter, the hypothesis is flatly wrong. That is, it is simply not the case that the
world's leading nations are to any important degree in economic competition with one another, or
that any of their major economic problems can be attributed to failures to compete in world markets.
A2 Competitiveness – rail turn
US rail is the best in the world
Economist, 10 (High-speed railroading America’s system of rail freight is the world’s best. High-speed
passenger trains could ruin it, http://www.economist.com/node/16636101)
Amtrak's passenger services are sparse compared with Europe's. But America's freight railways are one
of the unsung transport successes of the past 30 years. They are universally recognised in the industry
as the best in the world.
US rail loses edge if there is new rail laws
Economist, 10 (High-speed railroading America’s system of rail freight is the world’s best. High-speed
passenger trains could ruin it, http://www.economist.com/node/16636101)
But the problem with America's plans for high-speed rail is not their modesty. It is that even this
limited ambition risks messing up the successful freight railways. Their owners worry that the plans
will demand expensive train-control technology that freight traffic could do without. They fear a
reduction in the capacity available to freight. Most of all they fret that the spending of federal money
on upgrading their tracks will lead the Federal Railroad Administration (FRA), the industry watchdog,
to impose tough conditions on them and, in effect, to reintroduce regulation of their operations.
Attempts at re-regulation have been made in Congress in recent years, in response to rising freight
rates. “The freight railroads feel they are under attack,” says Don Phillips, a rail expert in Virginia.
A2 hegemony impacts 1/2
U.S. involvement does not solve the bigges threats to insecurity – withdrawal
would not be a disaster.
Barbara Conry is a foreign policy analyst at the Cato Institute, hottest woman evar, 1997 [U.S. "Global
Leadership": A Euphemism for World Policeman, February 5, Policy Analysis no. 267,
http://www.cato.org/pub_display.php?pub_id=1126&full=1]
In other words, if America abdicates its role as world leader, we are condemned to repeat the biggest
mistakes of the 20th century--or perhaps do something even worse. Such thinking is seriously flawed,
however. First, to assert that U.S. leadership can stave off otherwise inevitable global
chaos vastly overestimates the power of any single country to influence world
events. The United States is powerful, but it still can claim only 5 percent of the world's population and
20 percent of world economic output. Moreover, regardless of the resources Americans
might be willing to devote to leading the world, today's problems often do not lend
themselves well to external solutions. As Maynes has pointed out, Today, the greatest fear
of most states is not external aggression but internal disorder. The United States
can do little about the latter, whereas it used to be able to do a great deal about the former. In other
words, the coinage of U.S. power in the world has been devalued by the change in
the international agenda. [58] Indeed, many of the foreign policy problems that have
confounded Washington since the demise of the Soviet Union are the kinds of problems that are
likely to trouble the world well into the next century. "Failed states," such as Somalia, may
not be uncommon. But, as the ill-fated U.S. and UN operations in that country showed,
there is very little that outside powers can do about such problems. External
powers usually lack the means to prevent or end civil wars, such as those in
Rwanda and the former Yugoslavia, unless they are willing to make a tremendous effort to do so.
Yet those types of internecine conflicts are likely to be one of the primary sources of
international disorder for the foreseeable future. Despite the doomsayers who
prophesy global chaos in the absence of U.S. leadership, however, Washington's
limited ability to dampen such conflicts is not cause for panic. Instability is a normal
feature of an international system of sovereign states, which the United States can
tolerate and has tolerated for more than two centuries. If vital American interests are not
at stake, instability itself becomes a serious problem only if the United States
blunders into it, as it did in Somalia and Bosnia.
A2 hegemony impacts 2/2
Their impact is silly – U.S. engagement actually increases the likelihood of war
in Asia and Europe – these areas can easily secure themselves.
Gholz and Daryl G. Press (doctoral candidates in the Department of Political Science at the Massachusetts Institute of
and Harvey M. Sapolsky (Professor of Public Policy and Organization in the Department of Political Science at M.I.T. and
Director of the M.I.T. Defense and Arms Control Studies (DACS) Program Spring 1997 “come home America – the strategy of restraint in the
Eugene
Technology)
face of temptation” International Security, Vol. 21, No. 4
The selective engagers’ strategy is wrong for two reasons. First, selective engagers overstate the effect
of U.S. military presence as a positive force for great power peace. In today’s world,
disengagement will not cause great power war, and continued engagement will not reliably prevent it.
In some circumstances, engagement may actually increase the likelihood of conflict.
Second, selective engagers overstate the costs of distant wars and seriously understate the costs and
risks of their strategies. Overseas deployments require a large force structure. Even worse, selective
engagement will ensure that when a future great power war erupts, the United States will be in the
thick of things. Although distant great power wars are bad for America, the only sure
path to ruin is to step in the middle of a faraway fight. Selective engagers overstate
America’s effect on the likelihood of future great power wars. There is little reason to
believe that withdrawal from Europe or Asia would lead to deterrence failures. With or without a
forward U.S. presence, America’s major allies have sufficient military strength to deter any
potential aggressors. Conflict is far more likely to erupt from a sequence described in the spiral model.
The danger of spirals leading to war in East Asia is remote. Spirals happen when states,
seeking security, frighten their neighbors. The risk of spirals is great when offense is easier than defense,
because any country’s attempt to achieve security will give it an offensive capability against its
neighbors. The neighbors’ attempts to eliminate the vulnerability give them fleeting offensive
capabilities and tempt them to launch preventive war.71 But Asia, as discussed earlier, is blessed with
inherent defensive advantages. Japan and Taiwan are islands, which makes them very
difficult to invade. China has a long land border with Russia, but enjoys the
protection of the East China Sea, which stands between it and Japan. The expanse of Siberia gives
Russia, its ever- trusted ally, strategic depth. South Korea benefits from mountainous
terrain which would channel an attacking force from the north. Offense is difficult in East Asia, so
spirals should not be acute. In fact, no other region in which great powers interact offers more defensive
advantage than East Asia. The prospect for spirals is greater in Europe, but continued U.S.
engagement does not reduce that danger; rather, it exacerbates the risk. A West European
military union, controlling more than 21 percent of the world’s GDP, may worry Russia. But NATO, with
44 percent of the world’s GDP, is far more threatening, especially if it expands eastward. The more
NATO frightens Russia, the more likely it is that Russia will turn dangerously nationalist, redirect its
economy toward the military, and try to re-absorb its old buffer states.72 But if the U.S. military were to
withdraw from Europe, even Germany, Europe’s strongest advocate for NATO expansion, might become
less enthusiastic, because it would be German rather than American troops standing guard on the new
borders.
***jobs answers***
A2 jobs – overrated 1/2
“Creating jobs” does not solve unemployment-does not raise a demand.
Chanel 4 News 04-06-12(“Job creation alone 'will not solve unemployment'”, Chanel 4 News,
http://www.channel4.com/news/job-creation-alone-will-not-solve-unemployment)
The UK creates over five million jobs every year, but only boosting demand for labour will get the unemployed into jobs, economist Jonathan
Portes tells the Channel 4 Jobs Report. News There are about 2.7 million unemployed people in the UK. But there are only about 480,000 job
vacancies. So we’re missing more than two million jobs, right? If we could only create those two million more jobs, the problem would be
solved. Wrong. In
fact, in an average year - even in a recession - more than three million people who
previously didn't have a job get one. Almost as many change jobs. So although the number of job vacancies at any one time may
be less than half a million, over the year probably five to six million people start a "new" job. The UK labour market is very dynamic – people are
moving in and out of jobs all the time, even in the middle of a recession. Almost 300,000 people left Jobseekers' Allowance last month, most of
them to start a job; of course, at the same time, slightly more than that signed on. Reducing
unemployment by a million is not
so much about "creating" an extra million jobs; it is about ensuring that an extra million people are in
jobs that they are qualified to do and that employers want to pay them to do. So what the problem? Why is
unemployment more than a million higher than it was four years ago? The best way to think about this is in terms of
demand and supply. The number of people in jobs – and hence the number of unemployed people – is
determined by both labour supply (the skills, qualifications, and motivation of workers and potential
workers, and the operation of the benefit system) and labour demand (whether employers need
workers with particular skills, qualifications, and motivation at the market wage).
Jobs wont help Economy- Lesson from Depression
Glastris, Longman, 12 (P.P, Introduction: Jobs Not Enough,
http://www.washingtonmonthly.com/magazine/julyaugust_2012/features/introduction_jobs_are_not_
enou038416.php)
By 2007, the average consumer was so tapped out that even many people with jobs were no longer
able to make their mortgage payments. That was the spark that set off the financial crisis. The ensuing
recession further ravaged family balance sheets. The Federal Reserve made front-page news in June
when it reported that median family net wealth had decreased by nearly 40 percent from 2007 to 2010,
with younger families being particularly hard hit. With household asset levels so depleted, it’s folly to
think that the economy can be set right merely by adding more jobs , however much they’re needed.
That’s the lesson of the Great Depression and World War II. As James K. Galbraith has pointed out in
these pages (“No Return to Normal,” March/April 2009), the New Deal built infrastructure and put
Americans back to work, but failed to spark self-sustaining economic growth. It was “the war, and
only the war that restored (or, more accurately, created for the first time) the financial wealth of the
American middle class.” Not only did the war boost production to levels never before seen, just as
importantly it increased household savings. Faced with rationing and price controls, and inspired by
patriotic zeal, Americans poured their incomes into war bonds. After the war, these savings boosted the
balance sheets and creditworthiness of millions of Americans, thereby making the great postwar boom
possible. The obvious lesson for our own time is that whatever we might do to stimulate the
economy—through direct federal spending, as Democrats want, or tax cuts, as Republicans demand—
won’t be enough to put us back on a path to healthy growth. We’ll also need policies that specifically
and directly help ordinary Americans both to avoid ruinous debt and to accumulate productive assets.
A2 jobs – overrated 2/2
Unemployment numbers not a good indication of economy- more to do with
people actually looking for jobs
Gandel 10 (Stephen Gandel, September 3, 2010, is a senior writer for TIME, covering real estate,
economics and Wall Street. He joined TIME from Time Inc. sister publication Money, where he was a
senior writer for several years. Prior to that, Gandel was the senior Wall Street reporter for Crain's New
York Business. He has held positions at Individual Investor and the Riverfront Times in St. Louis.
Additionally, his work has appeared in Fortune and Esquire, NY Times,
http://business.time.com/2010/09/03/unemployment-rises-hurray/)
The Department of Labor reported August job numbers on Friday, and the numbers appeared to be
another bad sign for the recovery. The economy lost 54,000 positions in the last full month of summer.
Worse, the unemployment rate rose for the first time in four months to 9.6%, from a rate of 9.5% the
month before. So is this jobs report the latest sign that we are headed for a double dip? Probably not.
Actually it’s the opposite. Despite what it looks like, today’s jobs numbers are good news for the
economy. Mark Zandi, a closely watched economist, had this to say on CNBC when the job report was
announced, “It solidifies the idea the economic recovery is going to remain intact.” What’s going on
here? First of all, a good part of the job losses came from the government. If you just look at the private
sector, the economy actually added 67,000 positions. People getting off government payrolls and being
hired by corporations or small businesses is a good sign. That’s the handoff hopefully between the
stimulus and economic growth kicking in. But the bigger point may be this: The unemployment rate,
probably the most famous of economic gauges, may actually be a very bad indicator of how healthy
the economy is. What economists know very well, but most of the rest of us do not is that the
unemployment rate never hits 0%. It never even gets close. In fact, even in good times, the
unemployment rate has been creeping up over time. During the 1960s, the unemployment rate was
below 4% for nearly four years, going as low as 3.5%. During the amazing late-1990s-early-2000s
economic boom, though, never got as low as that. The unemployment rate touched 4%, dipping below
that only briefly for just a few months. In 2008, the rate dropped to around 4.5% and that was the best
it got. In fact, for most of the time during the housing market and credit boom that was the late
2000s, the unemployment rate stood at 5%-7%. The unemployment rate peaked in late 2009 at just
above 10% and has been mostly falling ever since. But the hiring numbers, or less firing numbers, have
only been improving recently. So what was going on? The unemployment rate tracks not just how
many people have jobs, but how many people are looking for jobs. And, up until August, the number
of people looking for jobs was dropping rapidly. When people give up looking for work, essentially
giving up on the economy, that indicates a really bad drop in confidence, something a recovery feeds
on. So the reason the unemployment rate was rising dropping has less to do with more people getting
jobs, and more to do with fewer people looking.
A2 jobs – NIB fails 1/2
The creation of government entities stunts employment-self destructive.
Glassman 12 (James K., Forbes.com contributor, executive director of the George W. Bush Institute,
journalist, author on investing, articles appear in New York Times, Wall Street Journal, Los Angeles
Times, Kiplinger’s Personal Finance, Forbes, on the Investor Advisory Committee of the U.S. Securities
and Exchange Commission, “As Unemployment Predictably Rises, the Solution Couldn't Be Simpler”,
Forbes.com, http://www.forbes.com/sites/jamesglassman/2012/06/01/as-unemployment-predictablyrises-the-solution-couldnt-be-simpler/ )
The news this morning that employment gains were scant in May should hardly come as a shock. In January, the Congressional Budget Office
projected that the jobless rate would rise to 8.9 percent by the end of this year – today’s report bumped it up from 8.1 to 8.2 – and that Gross
Domestic Product would increase a mere 2 percent for 2012 and just 1.1 percent for 2013. First quarter GDP, as of yesterday’s revision, was 1.9
percent, so we’re following the forecast. This is the worst recovery since the Great Depression – and maybe even including the Great
Depression. Typically, after a sharp downturn, the economy bounces back enough so that it gets right back on its 3 percent GDP trendline
within a couple years. That hasn’t happened. As a result, writes Edward Lazear of Stanford, “At this point, the economy is 12 percent smaller
than it would have been had we stayed on trend growth since 2007.” Another way of saying this is that income per household would be about
$15,000 more if this were a typical recovery. Think of what the economy would be like if every family had an extra $15,000 to spend. So why
such a terrible recovery? Certainly, mistakes were made: the bullying of business, the advent of a massive and expensive new health care
system, the stimulus itself. But put those aside as well. Also, forget the excuse du jour – gasoline prices, the European debt crisis, sluggishness
in China and India, intransigence in Congress, etc., etc. The hard truth is that the United States has been on a low-growth trajectory ever since
the recession officially ended three years ago (!), and the problem is endogenous. As Cassius put it: “The fault, dear Brutus, is not in our stars,
but in ourselves.” What we truly lack, to continue Shakespeare’s metaphor, is a lodestar, a guide, a goal. That goal is growth. Strong growth, in
the range of 4 percent on a sustainable, consistent basis, cures all economic ills. It dramatically lowers unemployment. It cuts the deficit. It
boosts consumer demand, housing prices, and business investment. Like anything else, if you want growth, you have to make it the only
economic goal and do everything you can to achieve it. Only recently are we hearing that from U.S. policymakers. Instead, they have fixed on
possible tactics as if they were ends in themselves. If
your goal is “creating jobs,” for example, then you will be tempted
to have the government extract tax dollars (or borrowings) and shower the money on projects that
will hire people. In the very short run, such a policy might actually create a few jobs, but it won’t take
long for the effect of the extraction of those dollars to be felt by the people from whom they were
extracted. Even worse, as Milton Friedman explained in his “permanent income hypothesis” more than a half-century ago, taxpayers aren’t
as dumb as politicians think. When they see the federal government spending lots of money, they know that they will have to foot the bill
eventually, so they constrain their spending so they’ll have enough to pay taxes in the future. Stimulus
of the job-creation sort
simply does not work. The way to get more Americans working is to adopt policies that will increase economic growth – not the other
way around. Lately, talk of growth has been tainted by a false dichotomy: The Europeans are saying that you can have growth or you can have
austerity, and their preference is for growth. Well, duh! Given that choice, whose preference wouldn’t be? But, in fact, austerity – that is,
reductions in wasteful government spending – is one of the key factors that produces growth. A bloated bureaucracy of the sort that
characterizes such nations as Greece, Spain, and France puts a damper on growth for the simple reason that it is supported by taxes and
borrowing that discourage private sector investment and hiring. As my colleague Amity Shlaes has written, “Growth happens more easily when
people believe that government is, and will remain, small. Austerity makes government smaller.” Government Spending Government Spending
(Photo credit: Tax Credits) Cutting government spending is one way to get growth. And there are many others. Probably
the fastest is reforming the tax code so that rates at the margin (that is, the next dollar) are reduced, loopholes and preferences are ended, and
taxes are applied on consumption rather than on income and investment. We can also get more growth by adopting policies that bring the best
and brightest immigrants to America, that improve our school systems, that increase free trade and remove constraints on developing energy
resource. In fact, constraints throughout the economy are what we need to remove. Government’s
to help foster an environment where the private sector can flourish.
role is not to create jobs but
A2 jobs – NIB fails 2/2
NIB will not create jobs – Japan proves it is an inefficient investment model
The Daily Bail 8/22/11
“Japan's Experience Shows That A National Infrastructure Bank Can Have Very Bad Consequences”
http://dailybail.com/home/japans-experience-shows-that-a-national-infrastructure-bank.html. DS
A state infrastructure bank will be at the core of President Obama's "jobs program" that he plans to unveil after his vacation.
He will argue we desperately need a new government entity to repair our crumbling infrastructure and create jobs. The
president will spin seductive images of high speed trains, highways without traffic jams, and clockwork subways in every city.
With an infrastructure bank, the sky is the limit. He will roll out respected moderate Republicans and even the Chamber of Commerce to
vouch for his bank. His explain that his miserly opponents, like the kooky Tea Party, favor collapsing bridges, traffic jams, and the loss
of international competitiveness. Past generations gave us the interstate highway system and the Hoover Dam. What will we leave
behind, he will ask? Under normal circumstances, the president could sell his infrastructure bank (It only costs $30 billion at the
start). But 2010 and the Tea Party will make it a tough sell even to "reasonable" Republicans. A president who preaches
internationalism must look to the experiences of other countries. Japan is a mega model for state infrastructure banks. Its
Japanese Postal Bank (JPB), with its 25,000 branches, is the world's largest bank. JPB attracts about one out of every three yen of
household savings. It is the world's largest holder of personal savings with household deposits of some $3.3 trillion. Japan has the JPB. It
also has high speed trains. The model looks like a good fit for us. Right? It so happens that JPN is also the world's largest political
slush fund. Politicians at all levels direct its funds to voters, constituents, friends, and relatives for infrastructure, construction,
and business loans. They basically use it to buy votes, curry favor, and get rich. They waste depositor money for political gain. If there
are losses, we have enough reserves to cover them. The result: Japan's economy has one of the world's highest investment rates and
one of the world's slowest growth rates. Rates of return on invested capital are only a small fraction of that in the U.S. Over time, we
get moderate to high rates of growth from a small amount of capital. Japan gets zero or slow growth from huge amounts of
capital. Japanese politicians understand what is going on, but they like JPN's business as usual. Japan's best prime minister of recent
history, Junichiro Koizumi, ran on a platform of privatizing JPN. With its huge depositor base, private investors salivated over the
prospect of buying it up. Koizumi understood that private owners would use JPN for economic gain, and Japan could restart economic
growth. Koizumi risked a special parliamentary election to push JPN's privatization, and in October 2005 parliament passed a bill to
privatize JPN by 2007. 2007 came and went. Koizumi retired his popularity intact. It is now 2011. JPB is still owned by the government!
Koizumi's successors blocked JPN privatization, warning of closures of post offices and job losses, but they really did not want to lose
their slush fund. As the current Financial Services Minister says: "When the borrower is in trouble, we will grant them a reprieve on
their loans. That is the natural thing to do," In other words, a politician/bureaucrat decides who gets loans, who repays, and who is
forgiven. This power brings in votes, bribes, and other shenanigans, but it is only "business as usual." Of course, this would not
happen in the United States with a state infrastructure bank. As John Kerry assures us: "The bank will finance economically viable
projects without political influence." Anyone who believes this would be a good candidate to buy the Brooklyn Bridge.
NIB Bad- Japanese proves, empirics are best
Gregory 11 (Paul Roderick Gregory, Forbes, Contributor Sun, Aug 21, 2011 “Why We Don't Need An
Infrastructure Bank? Japan Is Why” http://news.yahoo.com/why-dont-infrastructure-bank-japan-why175611191.html)
A president who preaches internationalism must look to the experiences of other countries. Japan is a
mega model for state infrastructure banks. Its Japanese Postal Bank (JPB), with its 25,000 branches, is
the world's largest bank. JPB attracts about one out of every three yen of household savings. It is the
world's largest holder of personal savings with household deposits of some $3.3 trillion. Japan has the
JPB. It also has high speed trains. The model looks like a good fit for us. Right?¶ It so happens that JPN is
also the world's largest political slush fund. Politicians at all levels direct its funds to voters,
constituents, friends, and relatives for infrastructure, construction, and business loans. They basically
use it to buy votes, curry favor, and get rich. They waste depositor money for political gain. If there
are losses, we have enough reserves to cover them.¶ The result: Japan's economy has one of the world's
highest investment rates and one of the world's slowest growth rates. Rates of return on invested
capital are only a small fraction of that in the U.S. Over time, we get moderate to high rates of growth
from a small amount of capital. Japan gets zero or slow growth from huge amounts of capital.
A2 jobs – vicious cycle
Adding jobs locally hurts the economy
Ruark and Graham 12 (Eric A. Ruark, Director of Research at Federation for American Immigration Reform, Matthew Graham, The
Federation for American Immigration Reform (FAIR), May 2012, “A change of plans: Rethinking Rapid Growth in a Finite World”,
http://www.fairus.org/DocServer/UnsustainableGrowth_2012.pdf, PS)
Local and state economic development programs tend to focus on “creating jobs,” but adding
new jobs to an area is associated
with a proportional increase in the population. As a result, adding jobs and more people to an area does
not reduce unemployment in the long-term, and often increases unemployment in other areas when
businesses relocate. Higher rates of population growth are not associated with economic prosperity. In
fact, places with higher rates of growth tend to have lower per capita incomes, higher unemployment rates,
higher poverty rates, and lower rates of productivity. One analysis found that from 2000 to 2009, a 1 percent
increase in the population growth rate was associated with a $2,500 drop in per capita income.
A2 jobs – alt cause
Alt cause – consumer spending is straitjacketed – checks the positive effects of
jobs
Mullaney 2012
Tim Mullaney, Economic Correspondent for USA today, USA Today, “Slow job growth hampering
consumer spending” July 15
http://www.usatoday.com/money/economy/story/2012-07-16/consumer-spendingdeclines/56260582/1
"It's the combination of weak jobs and the evidence people get when they open their paychecks that
it's not going anywhere," said Joel Naroff, president of Naroff Economic Advisors. "Businesses aren't
sharing their profits with workers."
Weak consumer spending is the biggest difference between this recovery and others past, said
Reinhart, a historian of past financial crises who popularized the idea that post-crisis recessions last
longer than other downturns. And because most consumers have fixed-rate mortgages, even a cut in
rates or more quantitative monetary easing by the Federal Reserve does little to help consumers
quickly, she said.
A2 jobs – Inflation turn
Unemployment good for the economy – labor market churn keeps economy
healthy and prevents inflation
Censky, May 5, 2012, (Annalyn, reporter at CNNMoney, covering news about the job market, Federal
Reserve policy, income inequality, and a wide range of other economic issues, CNNMoney, “What 0%
unemployment looks like”, http://money.cnn.com/2012/05/15/news/economy/zerounemployment/index.htm HA)
NEW YORK (CNNMoney) -- What if every person who wanted a job had one? The entire United States
may never be able to reach a 0% unemployment rate. But on a smaller scale, it's not entirely unheard of.
Simply put, 0% unemployment can occur when everyone who is looking for a job has one. It can
happen in niche markets when there are more openings than there are workers to fill them. Such was
the case with Monaco. According to the CIA, the country had a 0% unemployment rate in 2005. The tiny
nation -- which is smaller than a square mile -- has to import workers from neighboring France in order
to fill the demand for service jobs at the local upscale casinos and hotels. In the U.S., college grads who
studied astrophysics, geophysics, pharmacology and actuarial science had zero unemployment in 2010,
according to the Georgetown University Center on Education and the Workforce. 4 degrees with 0%
unemployment In these small and highly-skilled fields, many recent grads have job offers before they
graduate. That was the case for Bette Wiebke, who just graduated with a bachelor's in actuarial science
from Drake University. She's had a job lined up with Travelers Insurance since September. "The fact that
most of us can get jobs coming straight out of college, definitely says something good about the
occupation," Weibke said. While obviously not all students find jobs right away, those who don't often
choose to go on to grad school, and aren't counted as unemployed during their studies. About 97% of
Drake University actuarial grads either have a job or internship, or are enrolled in grad school within six
months of graduating. "It's hard to imagine there would be zero percent unemployment in any field, but
for certain segments, there is much higher demand for workers than there is supply," said Kerry
Boehner, founder of KOB Solutions, a Pittsburgh-based recruiting firm. The balance of jobs and workers
can quickly change as more people enter markets with little-to-no unemployment. That's why Boehner
cautions young people not to choose a career track in an advanced specialty simply because it's
currently in demand. "If you're going to school for 11 years, what's hot now may not be hot in 11 years,"
she said. What should the unemployment rate be? The U.S. job market currently has 8.1%
unemployment. While almost everyone agrees that's too high, zero unemployment wouldn't be a
good thing either. An economy with no unemployment is like a stagnant real estate market, said
University of Oregon professor Mark Thoma. "Suppose every apartment in the country is full, and I
wanted to move from New York to Los Angeles," he said. "I would have to find someone in L.A. who
wants to move to New York, and we would have to do a trade. It's much more efficient to have some
vacancies." Some churn in the labor market is a sign of a healthy economy, said Chris Pissarides, a
Nobel Prize winning economist at the London School of Economics. He estimates that even in the best
of times, regular turnover in the job market leads to an unemployment rate around 5%. Add on
structural changes that can put people out of work -- for example construction workers after the
housing bust -- and full employment is probably somewhere around an unemployment rate of 6%. "In
an economy that is really growing fast, there's always a need to reallocate workers either across the
country, skill categories or industries. People may need to change jobs," Pissarides said. "Therefore
we have to accept there will always be some unemployment and it's good for the economy."
Inflation turns extensions
Low unemployment causes high inflation - consistent inverse correlation
Hoover, 2008, (Kevin D. professor in the departments of economics and philosophy at Duke University.
He is past president of the History of Economics Society, past chairman of the International Network for
Economic Method, and editor of the Journal of Economic Methodology, Library of Economics and
Liberty, “The Concise Encyclopedia of Economics: The Phillips Curve”,
http://www.econlib.org/library/Enc/PhillipsCurve.html HA)
The Phillips curve represents the relationship between the rate of inflation and
the unemployment rate. Although he had precursors, A. W. H. Phillips’s study of wage inflation and
unemployment in the United Kingdom from 1861 to 1957 is a milestone in the development of
macroeconomics. Phillips found a consistent inverse relationship: when unemployment was high,
wages increased slowly; when unemployment was low, wages rose rapidly. Phillips conjectured that
the lower the unemployment rate, the tighter the labor market and, therefore, the faster firms must
raise wages to attract scarce labor . At higher rates of unemployment, the pressure abated. Phillips’s
“curve” represented the average relationship between unemployment and wage behavior over the business cycle. It showed the rate of wage
inflation that would result if a particular level of unemployment persisted for some time. Economists soon estimated Phillips curves for most
developed economies. Most related general price inflation, rather than wage inflation, to unemployment. Of course, the prices a company
charges are closely connected to the wages it pays. Figure 1 shows a typical Phillips curve fitted to data for the United States from 1961 to
1969. The close fit between the estimated curve and the data encouraged many economists, following the lead of Paul Samuelson and Robert
Solow, to treat the Phillips curve as a sort of menu of policy options. For example, with an unemployment rate of 6 percent, the government
might stimulate the economy to lower unemployment to 5 percent. Figure 1 indicates that the cost, in terms of higher inflation, would be a
little more than half a percentage point. But if the government initially faced lower rates of unemployment, the costs would be considerably
higher: a reduction in unemployment from 5 to 4 percent would imply more than twice as big an increase in the rate of inflation—about one
and a quarter percentage points.
Smaller unemployed worker pool leads to employer competition
Appelbaum, May 3, 2012, (Binyamin, reporter for NY Times, attended the University of
Pennsylvania, previously worked for the Florida Times Union, the Charlotte Observer, the Boston Globe,
and The Washington Post; The New York Times: Business Day, “Inflation and Joblessness: The Tipping
Point”, http://economix.blogs.nytimes.com/2012/05/03/inflation-and-joblessness-the-tipping-point/
HA)
Another day, another clue in the quest to understand why the Fed isn’t trying harder to reduce the rate
of unemployment: John Williams, president of the Federal Reserve Bank of San Francisco, said
Thursday that the nonaccelerating inflation rate of unemployment – the lowest level of joblessness that
can be reached without leading to inflation – may have climbed as high as 6.5 percent, compared to 5
percent before the recession. First time hearing about the nonaccelerating inflation rate of
unemployment, or Nairu? No worries. It’s an important concept, but also pretty obscure. Basically, the
idea is that some unemployment is good, or at least unavoidable. People change jobs. Industries
disappear and workers need to be retrained. And a pool of unemployed workers limits the
competitive pressure to raise wages . In technical terms, many economists – including the ones who
run the Fed – believe that pushing unemployment below a certain level will cause wages and prices to
rise. They call that level the natural rate of unemployment. And Mr. Williams thinks recent disruptions,
which have left some workers ill equipped to find new jobs, have raised that rate as much as 1.5
percentage points. (In a February research note, Mr. Williams and a co-author calculated that the rate
might have climbed as high as 6.7 percent.)
Inflation turn extensions
Unemployment not necessarily bad – sometimes unavoidable
Appelbaum 12 (BINYAMIN APPELBAUM, Blogger and reporter for NY Times, attended the University
of Pennsylvania, where he was editor of the Daily Pennsylvanian. Appelbaum previously worked for the
Florida Times Union, the Charlotte Observer, the Boston Globe, and The Washington Post, May 3, 2012
,“Inflation and Joblessness: The Tipping Point”,
http://economix.blogs.nytimes.com/2012/05/03/inflation-and-joblessness-the-tipping-point/)
Another day, another clue in the quest to understand why the Fed isn’t trying harder to reduce the rate
of unemployment: John Williams, president of the Federal Reserve Bank of San Francisco, said
Thursday that the nonaccelerating inflation rate of unemployment – the lowest level of joblessness
that can be reached without leading to inflation – may have climbed as high as 6.5 percent, compared
to 5 percent before the recession. First time hearing about the nonaccelerating inflation rate of
unemployment, or Nairu? No worries. It’s an important concept, but also pretty obscure. Basically, the
idea is that some unemployment is good, or at least unavoidable. People change jobs. Industries
disappear and workers need to be retrained. And a pool of unemployed workers limits the competitive
pressure to raise wages. In technical terms, many economists – including the ones who run the Fed –
believe that pushing unemployment below a certain level will cause wages and prices to rise. They call
that level the natural rate of unemployment. And Mr. Williams thinks recent disruptions, which have left
some workers ill equipped to find new jobs, have raised that rate as much as 1.5 percentage points.
Inflation outweighs employment
Our turn outweighs their link – the damage from inflation outweighs the
benefits of employment
Appelbaum 12 (BINYAMIN APPELBAUM, Blogger and reporter for NY Times, attended the University
of Pennsylvania, where he was editor of the Daily Pennsylvanian. Appelbaum previously worked for the
Florida Times Union, the Charlotte Observer, the Boston Globe, and The Washington Post, April 27, 2012
FINANCE; The International Herald Tribune Pg. 16 “Fed rejects calls to increase economic stimulus;
Efforts to encourage job creation sidetracked to keep inflation in check”)
''The committee expects economic growth to remain moderate over coming quarters and then to pick
up gradually,'' the statement said. It said that unemployment would ''decline gradually'' and that
inflation remained under control, despite the recent rise in oil prices, which it regarded as temporary.
At a news conference Wednesday afternoon, Mr. Bernanke offered his most complete public
explanation to date for the calibration of the Fed's policies. The Fed is charged by Congress with
minimizing unemployment and maintaining stable prices. The Fed predicts that unemployment will
remain high for years to come, and it predicts that inflation will remain under control. Under those
circumstances, he was asked, why not take stronger action to reduce unemployment? Mr. Bernanke
said that he was concerned about the high level of unemployment but that the Fed's ability to
encourage job creation was constrained by its responsibility for keeping inflation low and stable.
Lowering the cost of borrowing to encourage job creation tends to increase inflation. The current pace is
already close to the 2 percent level the Fed considers ideal for long-term economic growth. Mr.
Bernanke said it would be irresponsible for the Fed to pursue a temporary increase in the rate of
inflation because it would surrender the credibility of its longstanding commitment to keep inflation
around 2 percent. Moreover, he said, the effect on job growth would be ''quite tentative and perhaps
doubtful.'' ''The question is, 'Does it make sense to actively seek a higher inflation rate in order to
achieve a slightly increased pace of reduction in the unemployment rate?''' he asked. ''The view of the
committee is that that would be very reckless.''
***bizcon answers***
A2 bizcon – high already 1/3
Biz Con fine-confidence survey shows.
Reuters 12 (“World business confidence cools, US a bright spot”, Reuters,
http://in.reuters.com/article/2012/07/08/global-economy-markit-idINL2E8I67VH20120708 )
The percentage of companies around the world that expected business activity to rise over the next 12
months outnumbered those anticipating a decline by a margin of 37 percent, according to Markit's
global business outlook survey. That was down from a difference of 44 percent in February, when Markit
last did the survey of 11,000 manufacturing and services companies. Even with the decline, the survey
pointed to economic expansion, Markit said, and sentiment was still better than October's post-crisis
low, when optimists exceeded pessimists by 32 percent. Hiring intentions for the next year also waned,
with 17 percent more companies planning to expand over those that did not, down from a gap of 19
percent in February. "Businesses globally have scaled back their expectations for business activity,
revenues and profits growth compared to earlier in the year, which has in turn led to a deterioration in
the employment outlook," Chris Williamson, chief economist at Markit, said in a statement.
Expectations for business activity in the euro zone dropped off, to a margin of 16 percent from 26
percent. The United States fared much better, with those that expected activity to pick up outpacing
those that did not by 57 percent, though that was down from 69 percent earlier in the year. Global
capital spending plans were unchanged, with a net difference of 14 percent. U.S companies that
intended to increase investment outstripped firms that planned to pull back by 21 percent, a new
high for the survey. In the euro zone, spending was seen falling. "Increased capital investment
suggests that companies have by no means withdrawn into purely cost-cutting mode, especially in the
U.S., which looks set to remain a bright spot in the global economic picture in the coming year," said
Williamson.
Biz Con fine-CEO’s optimistic and planning employment.
Schnurr 3/27/12 (Leah, Reuters Journalist, “Small Business Confidence Rises To
Highest Level In A Year”, Huffington Post, http://www.huffingtonpost.com/2012/03/27/smallbusiness-confidence_n_1383212.html )
(Reuters) - Small business confidence rose to its highest level in a year in the first quarter with more
firms planning to ramp up hiring as the economy's prospects improved, a survey showed on Tuesday. Vistage
International said its confidence index rose to 105.1 in the first three months of 2012 from 98.8 in the final months of 2011. It was the highest
level since the first quarter of 2011. The index was compiled from a survey in March of more than 1,850 small business chief executives.
Hiring plans reached a five-year peak with 57 percent of firms planning to increase jobs, up from 55 percent
in the previous quarter. Even so, 84 percent of executives said they've learned to do more with less. "While CEOs plan to increase
hiring, they have adapted their companies to be productive with fewer employees and do not expect employment to return to pre-recession
levels anytime soon," Rafael Pastor, chief executive of Vistage, said in a statement. Sixty percent said the economy improved from a year ago,
up from 41 percent in the fourth quarter of 2011, and the majority said the economy is in a durable recovery. Just 5 percent thought the
economy had worsened. Executives were also more cheery on the outlook for the economy with 49 percent expecting it to fare better this year,
up from 40 percent. The economic optimism lifted investment plans with 45 percent of firms planning investments in new plants and
equipment, up from 42 percent in the previous quarter .
More small businesses expected to see higher profits with 60
percent expecting improved profitability , though it was still well below the peak of 74 percent seen in late 2003.
A2 bizcon – high already 2/3
Biz Con Fine-Small business borrowing high.
Schnurr Leong 02-01-12 (Leah, Richard, Reuters Reporters, “Manufacturing picks up, but private job
gains slow”, Reuters, http://www.reuters.com/article/2012/02/01/us-usa-economyidUSTRE7BM0AB20120201 )
(Reuters) - Manufacturing growth accelerated in January to its highest level in seven months , though a
measure of employment faded and private-sector employers added fewer jobs than expected, data showed on Wednesday. U.S. economic
growth is widely expected to slow in early 2012 from the 2.8 percent pace in the final quarter of 2011, an outlook backed up by Wednesday's
data. "We're not firing on all cylinders yet, but we are still moving down the road," said Scott Brown, chief economist at Raymond James in St.
Petersburg, Florida. The
Institute for Supply Management (ISM) said its index of national factory activity
rose to 54.1, from a revised 53.1 the month before, and was at the highest level since June 2011. A
gauge of new orders also gained to 57.6 from 54.8, while the employment index slipped to 54.3 from 54.8. An ISM reading above 50 indicates
expansion in the sector. "The manufacturing sector is doing OK, particularly given that the overall economy is growing at only 2
percent or so," said Cary Leahey, managing director at Decision Economics. "The overall economy lacks oomph and is having trouble creating
jobs. Manufacturing is one of the few bright spots in an otherwise disappointing story." But job growth among private employers slowed as
companies added 170,000 jobs last month, the ADP National Employment Report showed. It was shy of economists' expectations for a gain of
185,000 jobs. It was the smallest gain in three months, though it was still in line with economists' forecasts for private job gains in the more
comprehensive U.S. government labor market report on Friday. Analysts will be watching Friday's data for insight into what it will mean for
policy after the Federal Reserve last week left the door open to additional economic stimulus. Prospects for a third round of quantitative
easing, known as QE3, from the Fed remain good as long as unemployment stays above 8 percent, Michael Woolfolk, a senior currency
strategist at BNY Mellon, wrote in a note. The unemployment rate is expected to hold steady at 8.5 percent. Uncertainty over the outlook for
the U.S. economic recovery also prompted the central bank to signal it will keep interest rates at ultra-low levels for nearly three years. But top
central bank official Charles Plosser on Wednesday criticized the Fed for that move, saying it undermined confidence and caused confusion.
"Such statements are, in my mind, particularly problematic from a communications perspective," Plosser, president of the Philadelphia Federal
Reserve, said. "Monetary policy should be contingent on the economic environment and not on the calendar." Uncomfortably high
unemployment remains one of the challenges for the economy that is still recovering from the financial crisis and collapse of the housing
market. As part of a wider set of proposals to energize the anemic housing sector, President Barack Obama on Wednesday called on Congress
to approve a $5 billion to $10 billion effort to help homeowners refinance their mortgages. Housing continues to be held back by an excess
amount of available homes, weak prices and tight lending standards. In the latest example of poor housing demand, applications for mortages
slipped last week. Separate data from the Commerce Department showed construction spending jumped in December to its highest level in
more than 1-1/2 years, breezing past expectations. Economists said the construction activity likely added to fourth-quarter growth, and JP
Morgan and Barclays lifted their estimate on gross domestic product for the quarter to 2.9 percent from 2.8 percent. Around the world, factory
activity also rose in China and Germany in January. Euro zone activity contracted for the sixth month, though the rate improved from
December. Wall Street indexes rose more than 1 percent in afternoon trading, helped by the global data and as Greece neared a long-delayed
deal on its debt. ADP revised down December's private payrolls to an increase of 292,000 from the previously reported 325,000. The report is
jointly developed with Macroeconomic Advisers LLC. "What
we're seeing here is slow and steady gains. It's not disastrous,
but it's not spectacular," said Joel Prakken, chairman of Macroeconomic Advisers. Economists often refer to the ADP
report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome. The ADP figures
have tended recently to overshoot the government report. The ADP report has come in stronger than the private payrolls component of the
nonfarm jobs report for three straight months, averaging a 62,000 overshoot in the fourth quarter of last year, according to Jonathan Basile,
director of U.S. economics at Credit Suisse. Friday's report is expected to show the economy created 150,000 jobs, and a gain in private payrolls
of 170,000, according to Reuters data. Small and medium-sized companies added the most jobs in January, ADP said, with an increase of 95,000
and 72,000 jobs, respectively. Separate data
showed borrowing by small businesses rose in December to the
highest level in more than four years , suggesting underlying strength for an important part of the
economy. In a positive sign for consumer demand, Chrysler Group's January auto sales surged, although sales at General Motors, the
largest U.S. automaker, lost some ground. (Reporting By Leah Schnurr; additional reporting by Richard Leong; Editing by Padraic Cassidy)
A2 bizcon – high already 3/3
Biz con up-motor industry proves.
Gardner 06-20-12 (Greg, Detroit Free Press Business Writer, “U.S. auto industry regains confidence,
survey shows”, Detroit Free Press, http://www.freep.com/article/20120720/BUSINESS01/207200354/US-auto-industry-regains-confidence-survey-shows )
Despite growing losses in Europe and slowing growth in the U.S., nearly three-quarters of American
auto executives plan to hire over the next 12 months, and 83% expect their firm's revenue to be
higher a year from now, according to an annual survey by the audit, tax and consulting firm of KPMG.
"The survey results clearly demonstrate a U.S. automotive industry that is regaining confidence ," said
Gary Silberg, leader of KPMG's U.S. automotive practice. The survey reflects responses that 100 senior
executives from automakers and suppliers gave in late May. Silberg said the optimism in the U.S. is a
reflection of the painful decisions made by General Motors, Chrysler, Ford and the U.S. Treasury during
the dark days of 2009. "It was gut-wrenching," Silberg said. "But they had to restructure. As a result, the
overall break-even level fell to about 10 million vehicles a year, and the market is now running at an
annual selling rate of 14 million. That means the profits are quite strong." In a major change from
previous years' results, North America was cited as the primary growth market by the largest majority
(63%) of respondents, compared with 44% who see more growth from China. Still, the pace of the
recovery is slow. More than 4 out of 5 (82%) said the U.S. economy will remain flat or show only
moderate growth in the next year, while 60% said a full economic recovery won't happen before 2014.
Biz con fine-home builders confidence up.
Hsu 07-17-12 (Tiffany, LA Times, “Home builder confidence sees biggest hike in nearly a decade”, LA
Times Business, http://www.latimes.com/business/money/la-fi-mo-homebuilder-confidence20120717,0,6687099.story )
American home builders in July had the best mood-booster in nearly 10 years as more buyers buying
more new properties had the housing market hoping for a stronger recovery. An index of confidence
from the National Assn. of Home Builders and Wells Fargo climbed six points this month in its
biggest gain since September 2002. The index is now at 35 – its highest level since March 2007.
Confidence in every region of the country is up, with sentiment best in the West. But since the national
gauge is still below 50, more respondents than not said the situation is poor . The signs , though, seem
to be good . A measure of single-family home purchases is at a five-year peak. Buyer traffic is also the
strongest it’s been in five years, as are indicators for sales over the next six months. “This is greater
evidence that the housing market has turned the corner as more buyers perceive the benefits of
purchasing a newly built home while interest rates and prices are so favorable,” said Barry Rutenberg,
chairman of the association, in a statement. But the group’s chief economist David Crowe cautioned
that housing is “still in a fragile stage of recovery” and faces challenges such as “overly tight lending
conditions, poor appraisals and the flow of distressed properties onto the market.”
A2 bizcon – link turns
You are very bad for business
Lankford 11, Congressman from Oklahoma, National Infrastructure Bank: More Bureaucracy and More
Red Tape, http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg70681/pdf/CHRG-112hhrg70681.pdf
Mr. LANKFORD. Well, thank you, Mr. Chairman. I am glad to be a guest of this committee today. I am on
the full Committee for Transportation, but a guest of this subcommittee, since we have the finest
secretary of transportation in the Nation, Mr. Gary Ridley, that is here from Oklahoma, who absolutely
does set the standard for planning and long-term research, and looking out on the horizon to see what is
coming up on things. I am glad that we are taking the time to discuss the issue of the national
infrastructure bank, as well, before we get in a hurry to do something, and end up creating another
labyrinth of red tape and another Federal program to solve the previous labyrinth of red tape and the
previous old Federal program. In the past, Government high-risk loans were used for activities like
nuclear power plants, but had such a high cost and high regulation that lenders were slow to put
capital at risk, because of the uncertain political environment. Now, apparently, the regulation and
political risk is high on asphalt pavement. What have we become, as a Nation, when we have driven the
cost of construction up so high, increased the construction time through regulations so long, and
burdened the State budget so much that we need a Federal loan program to offset the risks of lending
for a bridge? This is a prime case of the Federal Government creating the problem, and then running in
with a solution that will really just create more problems. It is my concern that this loan program is
designed to bail out States that cannot get credit because of bad budgeting decisions in the past, so
they are at high risk. Or it is another way to shuttle additional money to States that already receive a
high proportion of transportation dollars. There is a legitimate role for the Federal Government in
transportation and facilitating interstate commerce. But creating a new infrastructure bank with the
start-up cost of $270 million and 100 new employees to do what normal transportation funding, TIFIA,
and many State infrastructure banks already do, I do not believe is one of them.
Doesn’t help business – if the free market’s not investing in projects it’s a bad
idea
Calabria 10, Mark A. Calabria, is director of financial regulation studies at the Cato Institute. Before joining Cato in 2009, he
spent six years as a member of the senior professional staff of the U.S. Senate Committee on Banking, Housing and Urban Affairs. In
that position, Calabria handled issues related to housing, mortgage finance, economics, banking and insurance for Ranking Member
Richard Shelby (R-AL). Prior to his service on Capitol Hill, Calabria served as Deputy Assistant Secretary for Regulatory Affairs at
the U.S. Department of Housing and Urban Development, and also held a variety of positions at Harvard University's Joint Center
for Housing Studies, the National Association of Home Builders and the National Association of Realtors. Calabria has also been a
Research Associate with the U.S. Census Bureau's Center for Economic Studies. He has extensive experience evaluating the impacts
of legislative and regulatory proposals on financial and real estate markets, with particular emphasis on how policy changes in
Washington affect low and moderate income households. He holds a doctorate in economics from George Mason University.
http://www.cato-at-liberty.org/a-fannie-mae-for-intrastructure/
The real rationale for an infrastructure bank is to transfer the risk of default away from investors, bankers and local/state
governments onto the federal taxpayer, but to do so in such a manner that the taxpayer has no idea what they are on the hook for. If
there are truly great projects out there that will pay their own way, then they should have no
trouble getting private funding. Of course, we will be told that the bank will charge an interest rate sufficient to cover
losses and that the taxpayer won’t be on the hook. Again, if it is charging an appropriate rate, then why does the bank need to be
chartered (and backed) by the taxpayer? We’ve heard this story before…with Social Security, flood
insurance, FHA, Fannie/Freddie…the list goes on, that all of these programs would pay their own way and never
cost the taxpayer a dime. If there are truly outstanding infrastructure needs, then appropriate the money and pay for them. An
infrastructure bank is just another way to allow Wall Street to line its pockets while leaving the
risk with the taxpayer. If bankers aren’t willing to actually take the risks, then why exactly do we
need them?
A2 bizcon – recession not key to growth
No internal link between recession and economic collapse.
Bodil Nyboe Andersen (governor) 12/4/2002 Speech
http://www.nationalbanken.dk/DNUK/Publications.nsf/1c326d7c6cdf6f66c1256c080048787c/ed3a4113
9310e3b5c1256cf500543379/$FILE/kap08.html
Virtually every report and article on the international economic development nowadays starts by describing the unusually high degree of
uncertainty. Not only has the expected upswing been deferred once again for another year, but it has also become more common to hear
expressions of concern for the economy's course in both the USA and Europe. The terms recession, depression and deflation make
frequent appearances in the headlines, and are often used interchangeably to describe the fact that things are not going as
well as we were accustomed to up to 2000. Economists apply these three terms to describe different concepts: Recession is
the least serious situation. A rule of thumb says that a drop in output for two quarters running is a "technical recession". In the USA, the
National Bureau for Economic Research operates with a more sophisticated definition of recession, based on the development in a number of
macroeconomic time series. According to this definition, the Bureau noted a year ago that the USA went into a recession in March 2001.
Whether this recession is persistent or has now ceased will not be revealed until the figures have been revised and closely analysed, with a
timelag of many months, and perhaps more than one year. Depression is a prolonged period of abnormally low growth and
high unemployment. So this is a far more serious situation than recession. The term depression is used in particular
to describe the persistent economic crisis in the 1930s. Deflation signifies a drop in the general price level, i.e. the opposite of
inflation. A situation with falling prices is dangerous, since it tends to have a self-reinforcing tendency. If sustained price drops are expected,
purchases and investments will be postponed, and this in itself will deepen the crisis. The confusion regarding these terms is exacerbated by the
fact that "deflationary" is sometimes used merely to describe a tendency for the economy to dampen. Lower growth is not necessarily
a major problem, however. After strong growth and pressure on the labour market, a calmer period can be healthy.
***PPP answers***
A2 PPP – dysfunctional, turns growth
Public involvement in the transportation sector is the source of the problem,
not the solution
Rodrigue 98 [Jean-Paul Rodrigue, Ph. D. in Transport Geography, “The Financing of Transportation
Infrastructure”, 1998, https://people.hofstra.edu/geotrans/eng/ch7en/appl7en/ch7a2en.html]
Transportation infrastructure, like several infrastructure classes, has a significant level of public involvement
ranging from direct ownership and management to a regulatory framework that defines operational
standards. This is notably the outcome of a tradition where transportation, particularly roads, was seen as a
public good not to be subject to market forces and be free of access. A similar trend applied to port and airport
infrastructures that were placed under the management of public authorities. Although rail freight has essentially
been a private endeavor in the United States, it was significantly regulated by the Interstate Commerce
Commission in terms of fares and level of service. In many jurisdictions the government roles involve well
defined responsibilities that are not expected to change. Rail terminals are mostly managed by private rail
operators while the warehousing / distribution industry is almost completely private. Like many civil engineering
sectors, the private sector can be involved in transportation project delivery, which can include design and
construction, project management such as maintenance and operations and project financing, namely raising
capital. Contemporary transportation infrastructure financing is facing the following challenges: ¶ Transport
finance initiatives are generally not sufficient for maintaining and improving the performance of transport
systems. This was a major driver behind privatization and deregulation in the passenger and freight
transport industries worldwide.¶ Transport finance initiatives should be designed to promote productivity gains.
This underlines that many investment projects are politically instead of commercially driven.¶ Transport finance
initiatives differ in their probable impacts on transport system performance. This underlines the difficulty of
establishing multiplying effects linked with specific infrastructure investment projects.
PPP’s exacerbate the problem, kill innovation and risk taking
Rodrigue 98 [Jean-Paul Rodrigue, Ph. D. in Transport Geography, “The Financing of Transportation
Infrastructure”, 1998, https://people.hofstra.edu/geotrans/eng/ch7en/appl7en/ch7a2en.html]
However, like most initiatives where governments are involved, there are unintended consequences,
implying a difference between the expected and the real outcomes. The two most prominent
unintended consequences of a PPP involve undermining innovation and risk: ¶ Innovations. Since a
PPP results in less competition as the private company is securing an intrinsic monopoly, there are
limited incentives to innovate, particularly for the purpose of reducing operating costs. Innovations,
such as new management methods and new infrastructures, may also be impaired by regulations and
conditions related to the contract. Therefore, as long as the contract remain effective, inertia (status
quo) will endure, which means that long term contracts can become factors delaying innovation. It
can also be expected that investment capital commonly the outcome of the accumulation of profits would
come from the public sector. Since governments often put maximum profits clauses in contracts
(windfall profits), there are limited incentives to use innovations to increase productivity and
profits above the arbitrary threshold.¶ Risk. Strategies involved in the exploration of new market
opportunities, such as new services for customers, are common business practices and always involve
a level of risk. While a PPP may reduce several risk factors because of the implicit public support,
both from a financial and regulatory perspective (the government retains its potential to tax and coerce to
achieve its goals), the abatement of risks also has unintended consequences. The goal becomes
compliance to government policies at the expense of focusing on new opportunities and mitigating
the associated risk. Thus, the rewards of risk taking are essentially removed. This can be seen as a
reverse form of moral hazard where a government guarantee undermines the risk taking behavior of
private enterprises.
A2 Poverty – NIB fails
Small Urban areas that need the most help will be excluded
Mallet et al. 11 (William J. Mallet, Specialist in Transportation Policy, Steven Maguire a specialist in
Public Finance, Kevin R. Kosar is an analyst in American Government for the CRS, December 14 2011,
Congressional Research Service, “National Infrastructure Bank: Overview and Current Legislation”,
http://www.fas.org/sgp/crs/misc/R42115.pdf
Third, financing projects through an infrastructure bank may serve to exclude small urban and rural
areas because large, expensive projects tend to be located in major urban centers. Because of this, an
infrastructure bank might be set up to have different rules for supporting projects in rural areas, and
possibly also to require a certain amount of funding directed to projects in rural areas. For example, S.
652 proposes a threshold of $25 million for projects in rural areas instead of $100 million in urban areas.
Even so, the $25 million threshold could exclude many rural projects.
Political favoritism guts solvency
Mallet et al. 11 (William J. Mallet, Specialist in Transportation Policy, Steven Maguire a specialist in
Public Finance, Kevin R. Kosar is an analyst in American Government for the CRS, December 14 2011,
Congressional Research Service, “National Infrastructure Bank: Overview and Current Legislation”,
http://www.fas.org/sgp/crs/misc/R42115.pdf)
A frequent criticism of current public infrastructure project selection is that it is often based on factors
such as geographic equity and political favoritism instead of the demonstrable merits of the projects
themselves.51 In many cases, funding goes to projects that are presumed to be the most important,
without a rigorous study of the costs and benefits. Proponents of an infrastructure bank assert that it
would select projects based on economic analyses of all costs and benefits.52 Furthermore, a consistent
comparative analysis across all infrastructure sectors could yield an unbiased list of the best projects.
Selecting projects through an infrastructure bank has possible disadvantages as well as advantages.
First, it would direct financing to projects that are the most viable financially rather than those with
greatest social benefits. Projects that are likely to generate a financial return through charging users,
such as urban water systems, wastewater treatment, and toll roads, would be favored if financial
viability is the key element for project selection. Conversely, projects that offer extensive spillover
benefits for which it is difficult to fully charge users, such as public transit projects and levees, would be
disfavored.
A2 poverty impacts
Social injustices are not the root causes of war. Prioritizing peace offers a
better chance of solving injustice than vice versa***
Joshua S. Goldstein (professor of International Relations at American University, Washington D.C. He is
the author of a broad range of research works on international conflict, cooperation, and political
economy, with a central focus on great-power relations and world order.) 2001 War and Gender: How
Gender Shapes the War System and Vice Versa. Cambridge University Press. pp. 412
First, peace activists face a dilemma in thinking about causes of war and working for peace. Many peace
scholars and activists support the approach, “if you want peace, work for justice.” Then, if one believes
that sexism contributes to war, one can work for gender justice specifically (perhaps among others) in
order to pursue peace. This approach brings strategic allies to the peace movement (women, labor,
minorities), but rests on the assumption that injustices cause war. The evidence in this book suggests
that causality runs at least as strongly the other way. War is not a product of capitalism, imperialism,
gender, innate aggression, or any other single cause, although these influence wars’ outbreaks and
outcomes. Rather, war has in part fueled and sustained these and other injustices. So, “if you want
peace, work for peace.” Indeed, if you want justice (gender and others), work for peace. Causality does
not run just upward through the levels of analysis, from types of individuals, societies, and governments
up to war. It runs downward too. Enloe suggests that changes in attitudes towards war and the military
may be the most important way to “reverse women’s oppression.” The dilemma is that peace work
focused on justice brings to the peace movement energy, allies, and moral grounding, yet, in light of this
book’s evidence, the emphasis on injustice as the main cause of war seems to be empirically
inadequate.10
A2 Oil impacts 1/
The world has enormous spare capacity – Reserve stocks minimize disruption.
Gholz and Press 8/20/08 Associate Professor @ Lyndon B. Johnson School of Public Affairs @ UT
Austin, Associate Professor of Government @ Dartmouth, Eugene & Daryl G., New York Times, “All the
Oil We Need”
http://www.nytimes.com/2008/08/21/opinion/21press.html?pagewanted=2&_r=1&_r%202
volatility
has Americans worrying more than ever
But they have little to fear
there are robust stockpiles of oil around the globe that
could see us through any foreseeable calamities on the world market trouble
could come
from many directions
natural disasters could
disrupt oil
Iran
proclaims that
it can block oil exports
Chávez
raises fears of an export cutoff
civil
unrest wreaks havoc with Nigeria
such fears rest on a misunderstanding. The
world actually has enormous spare oil capacity
whereas the world’s reserve supply once sat in relatively inaccessible pools, much of it
now sits in easily accessible salt caverns and storage tanks. And consumers control the spigots. During a
supply disruption, Americans would no longer have to rely on the good will of foreign governments. The
United States alone has just more than 700 million barrels of crude oil in its Strategic Petroleum
Reserve. Government stockpiles in Europe add nearly another 200 million barrels of crude and more
than 200 million barrels of refined products. In Asia, American allies hold another 400 million barrels
Some policy makers and analysts worry that these
emergency stocks are too small
While
oil
prices have declined somewhat of late, the
of the market and the political and religious unrest in major oil-producing countries
energy security.
about
— contrary to common understanding,
. True,
. Hurricanes and other
suddenly
from the Persian Gulf. The anti-American rhetoric of President Hugo
production or transportation.
of Venezuela
for the world’s energy supplies
loudly and regularly
there. And ongoing
’s output. [GHOLZ AND PRESS CONTINUE – PARAGRAPH LATER] But
. It has simply moved. In the past, major oil producers like Saudi Arabia controlled it. But for years the world’s major cons umers have bought extra oil to fill
their emergency petroleum reserves. Moreover,
. And China
is creating a reserve that should reach more than 100 million barrels by 2010. [GHOLZ AND PRESS CONTINUE – PARAGRAPH LATER]
. For example, they sometimes compare the American strategic reserve to total American consumption, so the reserves appear dang erously inadequate. The United States consumes about 20
million barrels of oil every day, so the Strategic Petroleum Reserve could only supply the country for 35 days. (Furthermore, the United States could not draw oil out of the reserve at anything approa ching a rate of 20 million barrels per day.) This is why President Bush in his 2007
But this vulnerability is a mirage. The size of plausible disruptions, not total
consumption, determines the adequacy of global reserves. The worst oil disruptions in history deprived
global markets of five million to six million barrels per day. Specifically, the collapse of the Iranian oil
industry during the revolution in 1978 cut production by nearly five million barrels a day, and the
sanctions on Iraq after its conquest of Kuwait in 1990
If a future disruption were as bad as
history’s worst, American and allied governments’ crude oil stocks alone could replace every lost barrel
for eight months. Current fears
focus on Iran
Tehran could sharply cut its oil exports
this would be the economic
suicide
oil exports provide
80 percent of Iranian
revenues, and a major cutback would wreck Iran’s economy. It would also be futile because the
industrialized world could easily replace Iranian oil. Iran only exports 2.5 million barrels each day
any major
disruption
would make prices jump until markets realized that the pipes feeding
crude into refineries were not going to run dry. But recognizing the great capacity of global reserves to
weather disruptions will go a long way to minimizing panic.
State of the Union address called for doubling the strategic reserve.
eliminated 5.3 million barrels of supply.
about energy security
prices. Of course,
equivalent of
. For example,
terrorism:
to drive up global
more than
government
. A coordinated
release of reserve crude by the United States and its European and Asian allies could replace missing Iranian barrels for a y ear and a half. Iran is vulnerable; the West is not. [GHOLZ AND PRESS CONTINUE – 4 PARAGRAPHS LATER] Make no mistake,
— from a war, a terrorist attack or a natural disaster —
A2 Oil impacts 2/
Shocks have zero effect on the economy.
Taylor and Van Doren 07, senior fellows at the Cato Institute, October 17 2007 (Jerry and Peter,
“No need to fear oil shocks,” National Post, lexis)
The lesson to be derived from this is pretty clear: While oil-price spirals are certainly nothing for consumers to celebrate,
markets
the health of the economy is not held hostage to oil
. The orthodox view that governed our understanding of oil-price shocks until recently was that the economic damage associated with those shocks was not the result of oil -price increases per se. Higher oil prices, after all, simply make oil producers richer, and
everyone else poorer. Over the long run, more money spent on oil equals less money spent on everything else. This reduces the demand for, and thus the price of, everything (including labour!) save for oil. As long as oil producers are spending and/or investing their increased
the length of time required to get oil consumers to adjust
their behaviour in response to a price shock is what was thought to trigger the economic downside
associated with an oil crisis
The main dissenting view was most strongly forwarded by
Bernanke
They argued that different ("better") monetary policy
could reduce or even eliminate the recessionary effect of oil shocks
profits, the net effect of all this -- from a macroeconomic perspective--is zero. All of this will eventually happen, but
. If wages and consumption rates outside the oil sector fail to go down, either unemployment will follow or inflation w ill result, because there's only so much money to go around, unless the Federal Reserve
accommodates everyone's demand for money.
then Princeton University economist and now Federal Reserve Board
chairman Ben
-- more specifically, one that maintains the federal funds rate at a
and his colleagues.
constant level, rather than raising it in the face of an oil shock --
. Economists James Hamilton
and Anna Herrera, however, were skeptical of that proposition. They argued that the "better" monetary policy advocated by Ber nanke et al. effectively calls for massive declines in the federal funds rate over the entire course of an oil shock, something that is probably not possible
in the real world. Moreover, the Federal Reserve would have to keep the funds rate below levels anticipated by market actors for 36 months in a row, which is, of course, an unlikely proposition. Interestingly enough, the Federal Reserve, now chaired by Ben Bernanke, is not
That was the state of the debate until the most recent price shock.
The economy's failure to respond to one of the steepest oil-price increases in history with a recession,
however, sent economists back to the theoretical drawing board. All analyses agree more
flexible economy that we have now allows us to cope more easily with oil price shocks
pursuing the policies advocated by its chairman when the chairman was in the academy.
the new
that the
. It underscores the danger of the price-
control regimes of the 1970s, something that politicians are increasingly flirting with as energy prices continue to climb an d put into question a panoply of government programs.
Worse oil shocks have happened – no impact
Nordhaus 07 professor of economics @ Yale [William Nordhaus “ Whos afraid of a big bad oil shock “
september 2007 http://www.econ.yale.edu/~nordhaus/homepage/Big_Bad_Oil_Shock_Meeting.pdf\]
In the end, this suggests that much of what we should fear from oil-price shocks is the fearful
overreactions of the monetary authority, consumers, businesses, and workers. A cautious reading today suggests
that policymakers should not be afraid of a Big Bad Oil Shock. The most recent evidence suggests that
the economy is robust in the face of major energy shocks. The economy weathered an increase in real
oil prices of 125 percent from 2002 to 2006 without any major strain. This suggests that policymakers should
focus on fundamentals such as employment, real output, and containment of inflation as well as the instabilities
caused by financial innovations and risk-taking. Oil-price shocks are neither so big nor as bad as in the 1970s.
A2 AIDS impacts
1. AIDS doesn’t cause extinction.
Sullivan 98, editor of The New Republic, 1998 (Andrew, LOVE UNDETECTABLE, 1998, p.7 (PDAF0263))
So I do not apologize for the following sentence. It is true- and truer now than it was when it was first
spoken, and truer now than even six months ago- that something profound in the history of AIDS has
occurred these last two years. The power of the new treatments and the even greater power of those
now in the pipeline are such that a diagnosis of HIV infection in the West is not just different in degree
today than, say, in 1994. For those who can get medical care, the diagnosis is quite different in kind. It
no longer signifies death. It merely signifies illness. This is a shift as immense as it is difficult to grasp.
So let me make what I think is more than a semantic point: a plague is not the same thing as a disease.
It is possible, for example, for a plague to end, while a disease continues. A plague is something that
cannot be controlled, something with a capacity to spread exponentially out of its borders, something
that kills and devastates with democratic impunity, something that robs human beings of the ability
to respond in any practical way. Disease, in contrast, is generally diagnosable and treatable, with
varying degrees of success; it occurs at a steady or predictable rate; it counts its progress through the
human population one person, and often centuries, at a time
some time toward
the end of the millennium in America, the plague of AIDS went.
. Plague, on the other hand, cannot be cured, and it never affects one person. It affects many, and at once, and
swiftly. And by its very communal nature, by its unpredictability and by its devastation, plague asks questions disease often doesn't. Disease is experienced; plague is spread. Disease is always with us; plagues come and go. And
2. AIDS is weakening.
Daily News Central 05 Health News that provides news geared toward health consumers, along with
links to informative sites, Health News, “HIV May be Evolving to Less Deadly Form” September,
http://health.dailynewscentral.com/content/view/1716/0
New evidence suggests that the AIDS virus, HIV, may be weakening. Scientists in Belgium compared
samples of HIV-1, the most dangerous strain of the virus, from the 1980s and 2002. Laboratory tests
showed that the older viruses were significantly "fitter." They multiplied more easily and were better
able to resist anti-retroviral drugs. The findings appear to contradict recent trends which indicate a
growth in HIV drug resistance. But they support theories which suggest that viruses sometimes evolve
to become less virulent in order to safeguard their survival
. Infection Rates In this respect, HIV may be following in the footsteps of the virus which causes myxomatosis in rabbits.
When the myxoma virus was deliberately introduced as a control measure in Australia in 1950, rabbit populations were decimate d. But weakened strains of the virus quickly emerged, so that many rabbits now develop a chronic form of the disease instead of dying. Experts warn,
looked at
HIV-1-infected cells obtained from patients in 1986-89 and 2002-03. The older viruses out-competed
the new ones on 176 occasions out of 238. In nine out of 12 specially controlled and carefully matched
tests, the 1980s viruses proved the stronger. The researchers wrote in the journal AIDS: "These
findings suggest that HIV-1 replicative fitness may have decreased in the human population since the
start of the pandemic." Symbiotic Existence Previous models simulating the spread of infective agents
have suggested that many lethal viruses and bacteria may evolve away their virulence, even to the
point of "symbiotic existence" where they actually benefit the host
however, that HIV infection rates are continuing to rise in the UK and elsewhere, and there should be no scaling down of effo rts to curb its spread. Replicative Fitness The researchers, led by Kevin Arien from the Institute of Tropical Medicine in Antwerp,
. If a virus is too deadly, it risks working against itself by killing off many of its potential hosts.
Becoming less prolific may also help to shield a virus from the host's immune system.
A2 global warming impacts 1/3
Too late to solve warming—too much CO2
Garnet ’10 (Andre Garnet, Senior Analyst at Investology, Inc. 8/14/10 , the energy collective, “Slowing
CO2 emissions cannot end global warming, but removing CO2 from the atmosphere will”,
http://theenergycollective.com/andre-garnet/41653/slowing-co2-emissions-cannot-end-globalwarming-removing-co2-atmosphere-will)
Scarcely a day goes by without some announcement as to yet another effort to limit CO2 emissions, here or there, for the purpose of fighting global warming. Yet, all such attempts are futile
so much CO2 has already accumulated in the atmosphere that even if we ended all CO2
emissions today, global warming would probably continue to increase unabated. However, as explained below, we do
given that
have the technology to extract CO2 from the atmosphere and it is due to inept thinking on the part of United Nations scientists that we are not applying it. Before going into details, it might
be useful to frame the problem: It is since the advent of the industrial revolution circa 1,850 that factories and transportation caused a large and enduring increase in the amount of CO2
an enormous quantity
of CO2 has accumulated in the atmosphere given that we emitted more than could be absorbed by
plants and by the sea. So much so, that the amount of new CO2 that we emit nowadays is a drop in
the bucket compared to the quantity of CO2 that has already accumulated in the atmosphere since
around 1,850 as the atmospheric concentration of CO2 increased by about 30%. It is this enormous
quantity of atmospheric CO2 that traps the heat from the Sun, thus causing about 30% of global
warming. The point is that, if we are to stop or reverse global warming, we need to extract from the
atmosphere more CO2 than we emit. However, all we are currently attempting is to limit emissions of
CO2. This is too little, too late and totally useless inasmuch it could reduce our CO2 emissions by only
5% at best, while achieving nothing in terms of diminishing the amount of atmospheric CO2. Rather than
emissions. This phenomenon has been compounded by the rapid increase in the population given that humans emit CO2 as they breathe. As a result,
wasting precious time on attempts to LIMIT our CO2 emission, we should focus on EXTRACTING from the atmosphere more CO2 than we are emitting. We have a proven method for this that
couldn't be simpler, more effective and inexpensive, so what are we waiting for? More specifically, it has been shown that atmospheric CO2 has been perhaps twice higher than now in the
not too distant past (some 250,000 years ago.) So what caused it to drop to as low as it was around 1,850? It was primarily due to the plankton that grows on the surface of the sea where it
absorbs CO2 that it converts to biomass before dying and sinking to the bottom of the sea where it eventually becomes trapped in sedimentary rock where it turns to oil or gas. There simply
isn't enough biomass on the 30% of Earth's surface that is land (as opposed to sea) for this biomass to grow fast enough to soak up the excess atmospheric CO2 that we have to contend with.
Plankton, on the other hand, can grow on the 70% of Earth that is covered by the sea where it absorbs atmospheric CO2 much faster, in greater quantities and sequesters it for thousands of
years in the form of oil and gas. Growing plankton is thus an extremely efficient, yet simple and inexpensive process for removing the already accumulated CO2 from the atmosphere. All we
need to do is to dust the surface of the ocean with rust (i.e. iron oxides) that serves as a fertilizer that causes plankton to grow. The resulting plankton grows and blooms over several days,
absorbing CO2 as it does, and then about 90% of it that isn't eaten by fish sinks to the bottom of the sea. The expert Russ George calculated that if all ocean-going vessels participated in such
an effort worldwide, we could return atmospheric CO2 concentration to its 1,850 level within 30 years. It's very inexpensive and easy to do, wouldn't interfere with the ships' normal activities
and would, in fact, earn them carbon credits that CO2 emitters would be required to buy. Moreover it is the ONLY approach available for addressing global warming on the global scale that is
necessary. By contrast, efforts to limit CO2 emissions by means of CO2 sequestration could address only about 5% of NEW CO2 generated by power plants. So even while causing our
electricity costs to treble or quadruple, such efforts wouldn't remove any of the massive amount of CO2 already accumulated in the atmosphere. In fact, the climatologist James Hansen
believes that even if we could stop all CO2 emissions as of today, it may already be too late to avert run-away, global warming as there is enough CO2 in the atmosphere for global warming to
keep increasing in what he fears is becoming an irreversible process. In other words, atmospheric CO2 is trapping more heat than Earth can dissipate which causes temperature
Scientists exaggerate warming impacts and manipulate their studies to
receive research funding.
Michaels 04 Senior Fellow in Environmental Studies at the Cato Institute and Professor of
Environmental Science at the University of Virginia [Patrick J., “Is Global Warming Always Bad?” Apple
Daily. November 7 http://www.cato.org/pub_display.php?pub_id=2872]
there's little incentive for scientists to do anything but emphasize the negative and the
destructive. Alarming news often leads to government funding, funding generates research, and
research is the key to scientists' professional advancement. Good news threatens that arrangement.
This is the reality that all scientists confront: every issue, be it global warming
competes with
other issues for a limited amount of government research funding. And, here in Washington, no one
ever received a major research grant by stating that his or her particular issue might not be such a
problem after all.
Perhaps because
, cancer or AIDS,
A2 Global warming impacts 2/3
No warming – History and scientific study prove – scientists exaggerate
studies to get research grants.
Jaworowski 08 Chairman of Scientific Council of the Central Laboratory for Radiological Protection in
Warsaw, Chair of UN Scientific Committee on the Effects of Atomic Radiation [Prof. Zbigniew “Fear
Propaganda” http://www.ourcivilisation.com/aginatur/cycles/chap3.htm]
the horrors of warming are not troubled by the fact that in the Middle Ages, when for a few
hundred years it was warmer than it is now, neither the Maldive nor the Pacific
flooded.
Global oceanic levels have been rising for
thousands of years
but it does not seem to be accelerated by the 20th Century warming
in warmer climates,
there is more water that evaporates from the ocean
than there is water
that flows to the seas from melting glaciers Since the 70s, the glaciers
have ceased
to retreat, and have started to grow
Antarctic ice flow has been
stopped, and that this has resulted in
the thickening of the continental glacier at a rate of 26.8 billion tons a year
Doomsayers preaching
atolls
some hundreds or
archipelagos were
(the causes of this phenomenon are not clear). In the last 100 years, this increase amounted to
10 cm to 20 cm, (24)
. It turns out that
(and subsequently falls as snow on the Greenland and Antarctic ice caps)
. (17)
19
of the Arctic, Greenland, and the Antarctic
. On January 18, 2002, the journal Science published the results of satellite-borne radar and ice core studies performed by scientists from CalTech's Jet Propulsion Laboratory and the
University of California at Santa Cruz. These results indicate that the
slowed, and sometimes even
. (25) In 1999, a Polish Academy of Sciences paper was prepared as a source
material for a report titled "Forecast of the Defense Conditions for the Republic of Poland in 2001-2020." The paper implied that the increase of atmospheric precipitation by 23 percent in Poland, which was presumed to be caused by global warming, would be detrim ental. (Imagine
stating this in a country where 38 percent of the area suffers from permanent surface water deficit!) The same pape r also deemed an extension of the vegetation period by 60 to 120 days as a disaster. Truly, a possibility of doubling the cro p rotation, or even prolonging by four
Newspapers
write about the increasing frequency and power
of the storms. The facts
speak otherwise
there are plenty of data from all over
the world
the number of storms with hail and precipitation exceeding 20 millimeters has
decreased
and after 1930, the number of all storms decreased In 1813 to 1994, the frequency
and magnitude of floods
have significantly decreased
Similar observations apply to the 20th Century hurricanes
worldwide.
months the harvest of radishes, makes for a horrific vision in the minds of the authors of this paper.
, however,
continuously
. I cite here only some few data from Poland, but
. In Cracow, in 1896-1995,
continuously,
. (26)
of Vistula River in Cracow not only did not increase but, since 1940,
. (27) Also, measurements in the Kolobrzeg Baltic Sea harbor
indicate that the number of gales has not increased between 1901 and 1990. (28)
over the Atlantic Ocean (Figure 4,) and
Alternate causality to carbon emissions – Deforestation.
Howden 07 Deputy Foreign Editor of The Independent [Daniel, “Deforestation: The Hidden Cause Of
Global Warming” The Independent May 14 http://www.independent.co.uk/environment/climatechange/deforestation-the-hidden-cause-of-global-warming-448734.html]
rainforests
are thought of as the lungs of the planet the
destruction of those forests will in the next four years alone
pump more CO2 into the
atmosphere than every flight in the history of aviation to at least 2025. Indonesia became the thirdlargest emitter of greenhouse gases in the world last week. Following close behind is Brazil. Neither
nation has heavy industry
yet they comfortably outstrip all other countries
What both countries do have in common is tropical forest that is being cut and burned with
staggering swiftness
two billion tons of CO2 enters the atmosphere every year from
deforestation
If we lose forests, we lose the fight against climate change."
Most people think of forests only in terms of the CO2 they absorb. The
of the Amazon, the Congo basin and Indonesia
. But
, in the words of Sir Nicholas Stern,
on a comparable scale with the EU, India or Russia and
, except the United
States and China.
. Smoke stacks visible from space climb into the sky above both countries, while satellite images capture similar destruction from the Congo basin, across the Democratic Republic of Congo, the Central African Republic and the
Republic of Congo. According to the latest audited figures from 2003,
. That destruction amounts to 50 million acres - or an area the size of England, Wales and Scotland felled annually. The remaining standing forest is calculated to contain 1, 000 billion tons of carbon, or double what is already in the atmosphere.
As the GCP's report concludes: "
A2 Global warming impacts 3/3
Not anthropogenic – Solar cycles increase irradiance and significantly
increase warming, regardless of greenhouse gases.
Thompson 06 NASA Press Release Headquarters [Elvia H., “NASA Study Finds Increasing Solar Trend
That Can Change Climate” NASA. March 20.
http://www.nasa.gov/lb/home/hqnews/2003/mar/HP_news_03106.html]
solar radiation
has increased by nearly .05 percent per decade,
according to NASA
This trend is important because
it could cause significant climate
change
solar radiation has been increasing since the late 19th century. If a trend
persisted throughout the 20th century, it would have provided a significant component of the global
warming the I
P C C reports to have occurred over the past 100 years
NASA
funded this research as part of its mission to understand and protect our home planet by studying the
primary causes of climate variability, including trends in solar radiation that may be a factor in global
climate change. The solar cycle occurs approximately every 11 years when the sun undergoes
increased
sunspot activity
followed by a quiet period
the trend would be important if maintained for a century or more
Total Solar Irradiance (TSI) is the radiant energy received by the
Earth from the sun, over all wavelengths, outside the atmosphere. TSI interaction with the Earth's
atmosphere, oceans and landmasses is the biggest factor determining our climate
These changes are relatively insignificant compared to the sun's
total output of energy, yet equivalent to all the energy that mankind uses in a year
small
variations, like the one found in this study, if sustained over many decades, could have significant
climate effects.
Since the late 1970s, the amount of
the sun emits, during times of quiet sunspot activity,
a
funded study. "
, if sustained over many decades,
," said Richard Willson, a researcher affiliated with NASA's Goddard Institute for Space Studies and Columbia University's Earth Institute, New York. He is the lead author of the study recently published in Geophysical Research Letters. "Historical records of solar
activity indicate that
, comparable to the one found in this study,
ntergovernmental
anel on
limate
hange
," he said.
's Earth Science Enterprise
a period of
magnetic and
called the "solar maximum,"
about 0.1 percent, is not enough to cause notable climate change,
called the "solar minimum." Although the inferred increase of solar irradiance in 24 years,
. Satellite observations of total
solar irradiance have obtained a long enough record (over 24 years) to begin looking for this effect.
. To put it into perspective, decreases in TSI of 0.2
percent occur during the weeklong passage of large sunspot groups across our side of the sun.
. According to Willson,
A2 Disease impacts 1/2
1. Disease are short term – They evolve to be benign.
AMNH 98 The American Museum of Natural History “How did Hyperdisease cause extinctions?”
http://www.amnh.org/science/biodiversity/extinction/Day1/disease/Bit2.html
It is well known that lethal diseases can have a profound effect on species' population size and
structure. However, it is generally accepted that the principal populational effects of disease are
acute--that is, short-term. In other words, although a species many suffer substantial loss from the
effects of a given highly infectious disease at a given time, the facts indicate that natural populations
tend to bounce back after the period of high losses. Thus, disease as a primary cause of extinction
seems implausible
Ordinarily, it is not in the pathogens
interest to rapidly kill off large numbers of individuals in its host species, because that might imperil
its own survival. Disease theorists long ago expressed the idea that pathogens tend to evolve toward
a "benign" state of affairs with their hosts, which means in practice that they continue to infect, but
tend not to kill (or at least not rapidly
. However, this is the normal case, where the disease-provoking pathogen and its host have had a long relationship.
). A very good reason for suspecting this to be an accurate view of pathogen-host relationships is that individuals with few or no genetic defenses against a particular pathogen
will be maintained within the host population, thus ensuring the pathogen's ultimate survival.
2. No terminal impact – Too fast or too slow.
The Independent 03 “Future Tense: Is Mankind Doomed?”
http://www.commondreams.org/headlines03/0725-04.htm
Maybe - though plenty of experienced graduate students could already have a stab. But nature knows
that infectious diseases are very hard to get right. Only HIV/Aids has 100 per cent mortality, and takes
a long time to achieve it. By definition, lethal diseases kill their host. If they kill too quickly, they aren't
passed on; if too slowly, we can detect them and isolate the infected. Any mutant smallpox or other
handmade germ would certainly be too deadly or too mild. And even SARS killed fewer people
worldwide than die on Britain's roads in a week. As scares go, this one is ideal - overblown and
unrealistic.
3. No risk of big impact – Quarantines check.
Pharma Investments, Ventures & Law Weekly 05 “SARS; Quarantine is cost saving and effective in
containing emerging infections” Lexis
Quarantine is cost saving and effective in containing emerging infections. "Over time, quarantine has
become a classic public health intervention and has been used repeatedly when newly emerging
infectious diseases have threatened to spread throughout a population. "Here, we weigh the
economic costs and benefits associated with implementing widespread quarantine in Toronto during
the SARS outbreaks of 2003," scientists writing in the Journal of Infection report. "We compared the
costs of two outbreak scenarios: in Scenario A, SARS is able to transmit itself throughout a population
without any significant public health interventions. In Scenario B, quarantine is implemented early on
in an attempt to contain the virus. "By evaluating these situations, we can investigate whether or not
the use of quarantine is justified by being either cost-saving, life saving, or both," wrote A.G. Gupta
and colleagues at the University of Michigan in Ann Arbor. "Our results indicate that quarantine is
effective in containing newly emerging infectious diseases
, and also cost saving when compared to not implementing a widespread containment mechanism," the authors said.
Gupta concluded, "This paper illustrates that it is not only in our humanitarian interest for public health and healthcare of ficials to remain aggressive in their response to newly emerging infections, but also in our collective economic interest. Despite somewhat daunting initial cost s,
quarantine saves both lives and money." Gupta and colleagues published their study in the Journal of Infection (The economic impact of quarantine: SARS in Toronto as a case study. J Infect, 2005;50(5):386-393).
A2 Disease impacts 2/2
4. A virus has never actually killed off any species.
New York Times 97 May 18, “Pathogens of Glory”
http://query.nytimes.com/gst/fullpage.html?res=9C00E6DA1639F93BA25756C0A961958260&sec=&spo
n=&pagewanted=2
Challenging the
perception that exotic viruses are
doomsday agents bent on wiping out the human species notes that ''we have not documented that
viruses have wiped out any species.'' As for the notion that we're surrounded by ''new'' diseases that
never before existed, he claims that ''most new diseases turn out to be old diseases
Despite such horrific effects, Dr. Peters is fairly anti-apocalyptic when it comes to the ultimate import of viruses.
widespread
, he
''; one type of hantavirus infection, he suggests,
goes back to A.D. 960. And in contrast to the popular belief that viral epidemics result from mankind's destruction of the en vironment, Dr. Peters shows how the elimination of a viral host's habitat can eradicate a killer virus and prevent future epidemics. This is what happened
when the Aswan Dam, completed in 1971, destroyed the floodwater habitat of the Aedes aegypti mosquitoes, carriers of Rift Valley fever virus: ''After the Aswan Dam was constructed, there was no more alluvial flooding. . . . Without a floodwater mosquito, the virus can't maintain
itself over the long haul. . . . By 1980, Rift Valley fever had essentially disappeared in Egypt.'' Still, Dr. Peters isn't totally averse to doomsday thinking, and in his final chapter he lays out his own fictional disease scenario, in which a mystery virus from Australia suddenly breaks out in
a Bangkok slum. Throw in Malthus, chaos theory and the high mutation rates of RNA viruses, and soon he's got the world teetering on the brink of viral holocaust in the finest Hollywood tradition. But he doesn't know quite what to make of his own scenario. He offers ''one valid,
simplified equation to describe what we can expect from viruses in the future'': mutating viruses plus a changing ecology plus increasing human mobility add up to more and worse infectious diseases. Two p ages later, though, he says that ''it is impossible to gauge how the actions
The empirical fact
is that today's most glamorous viruses -- Marburg and Ebola -- have killed minuscule numbers of
people compared with
pathogens that go back to disease antiquity
More than three
times as many people die of malaria every day than have been killed by Ebola virus in all of history.
Yet it's Ebola that people find ''scary''!
of man will impact on emerging infectious diseases.'' If that is true, it discredits the very equation he's given us. In the end, he presents no clear or consistent picture of the overall threat posed by the viruses he discusses.
of the
matter
the staggering death rates of
. Marburg virus, discovered in 1967, has been known to kill just 10
people in its 30-year history; Ebola has killed approximately 800 in the 20 years since it appeared in 1976. By contrast, malaria, an ancient illness, still kills a world wide average of one million people annually -- more than 2,700 per day.
5. Focusing on one area is useless.
Scott Barrett 05 School of Advanced International Studies, Johns Hopkins U, “Transnational Public
Goods for Health” http://www.gpgtaskforce.org/uploads/files/65.doc
You might think that the control of an infectious disease must be a global public good. However, the
situation is actually more complicated than this. Consider, to begin, a situation in which an infectious
disease is endemic everywhere. If the disease were highly infectious, that means that almost every
person could expect to be infected. Under these circumstances, a small increase in control by one
country would have no effect anywhere else. That control would not be a global public good.
***state budgets answers***
A2 state budgets – already high
States end fiscal year with more then anticipated
Selway 5/3 ( William Selway is a reporter at Bloomberg News, “ State budget surpluses rising as economy lifts revenue”,
May 04, 2012,
http://bangordailynews.com/2012/05/03/news/nation/state-budget-surpluses-rising-as-economy-lifts-revenue/)
WASHINGTON — More than half of the 50 states expect to end their budget years with cash surpluses
as a recovery in the economy buoys tax collections, a sign of easing pressure in statehouses across the
country. Twenty-nine state governments, including New Jersey, Indiana and Arizona, anticipate ending
their fiscal years with more money on hand than forecast when they put together their annual
budgets, according to a survey released Thursday by the National Conference of State Legislatures. It
marks the first time since the onset of the 2007 recession that so many states will have unspent funds.
State fiscal conditions are continuing to improve into fiscal 2013, although many state budgets are not
fully back to prerecession levels. This report finds that governors’ recommended budgets show an
overall increase in both general fund expenditures and revenues in fiscal 2013. However, fiscal 2013
general fund revenues are projected to increase by $27.4 billion, or 4.1 percent, and additional
recommended spending is only projected to increase by $14.6 billion, or 2.2 percent, suggesting that
states remain cautious about the strength of the national economic recovery. Fiscal trends indicate that
while aggregate state revenues will be above their pre-recession levels in fiscal 2013, total general fund
spending will not yet surpass pre-recession levels. Consequently, state budgets reflect a national
economy in which growth is slow and not as robust as in previous recoveries, yet overall state fiscal
improvement is occurring.
A2 Education 1/2
Status quo solves – new commerce department initiatives are increasing STEM education across all
boards.
Allen-Meares 10/27 (Paula Allen-Meares, Vice President, University of Illinois; Chancellor, UIC; John Corbally Presidential Professor,
“More Focus on Math, Science Education Vital to Economic Progress,” Posted: 10/27/11 12:44 PM ET, http://www.huffingtonpost.com/paulaallenmeares/stem-education-gap_b_1019768.html, azp)
A great deal of attention recently has been focused on an issue of real importance to the future of our
nation -- the need to train more undergraduates, especially blacks, Hispanics and women, in science, technology, engineering
and mathematics (STEM) fields. We cannot envision a sustained U.S. economic recovery in our increasingly competitive world without a
steady supply of highly trained professionals in the STEM disciplines, nor can we imagine full economic equality and opportunity unless the
diversity of STEM professionals mirrors that of our nation as a whole. We congratulate both the Obama administration and the Association of
American Universities (AAU) for highlighting this issue. Given the differential achievement gaps and escalating poverty rates among racial and
ethnic minorities: How will the nation respond? The
administration has put STEM education on the front burner
through a series of reports, and has emphasized the importance of higher education in eliminating
disparities among those in the STEM fields. A Commerce Department report released last month found underrepresentation of
blacks and Hispanics in STEM fields. "Educational attainment may affect equality of opportunity in these critical, high‐quality jobs of the future,"
the report said. "... by increasing the numbers of STEM workers among currently underrepresented groups through education we can help
ensure America's future as a global leader in technology and innovation." This puts significant responsibility for solving this problem on the
shoulders of higher education, and it is a challenge we are eager to meet. For example, there
is the AAU's announcement, a few
months ago, of a five-year initiative to improve STEM education at the undergraduate level. In announcing
the initiative, the AAU noted the disturbing fact that more than 40 percent of entering college freshmen who planned to major in STEM-related
fields changed to non-STEM majors by graduation. If we are to make progress in producing more professionals in science and technology, it is
imperative that we reduce this attrition and support students who want a career in the STEM disciplines so they graduate with a STEM degree.
We also need highly trained and inspirational K-12 science and math teachers, which is why initiatives
such as the Association of Public and Land-grant Universities (APLU)'s ongoing efforts to prepare a new
generation of top science and math teachers are so important. Much of the responsibility for making progress rests with
individual colleges and universities, as our mission includes recruiting, educating and graduating the STEM professionals of the future. At the
University of Illinois at Chicago we have long recognized these issues and have many initiatives in place with proven results. We want to share
some highlights in hopes that they will stimulate a deep interest in the topic and a sharing of ideas and solutions. We were greatly honored
earlier this year when UIC's Women in Science and Engineering program was one of only four organizations and 11 individuals across the U.S. to
receive the 2011 Presidential Award for Excellence in Science, Mathematics and Engineering Mentoring. The awards, administered by the
National Science Foundation (NSF), recognize the role mentoring plays in the academic and personal development of students studying science
or engineering -- particularly students in groups underrepresented in those fields. The
WISE program founded in 2002, works
to increase participation of women and girls in science, technology, engineering and mathematics. UIC's WISE
program has built a strong network with community organizations and local businesses to attract grade
school girls to math and science. A peer mentoring program supports undergraduate women majoring in math and the sciences.
We've reached out to literally thousands of girls and young women -- from grade school through college -- to spark their interest in the STEM
fields. And we're seeing results. For example, at UIC our most recent six-year graduation
rates for female STEM majors rose in
two years to 50 percent from 43 percent among African Americans, to 48 percent from 46 percent among Latinas, and to 66
percent from 53 percent among whites. More than 1,300 students in grades 6-12 received online mentoring from 225 science, technology,
engineering and math professionals.
A2 Education 2/2
Their impact is empirically denied – STEM isn’t key to leadership or the economy.
Galama AND Hosek, ’08 – Ph.D. and M.Sc. in physics AND .D. and M.A. in economics [Titus Galama – Ph.D. and
M.Sc. in physics, University of Amsterdam; M.B.A. in business, INSEAD, Fontainebleau, France, James Hosek – Ph.D. and M.A. in economics,
University of Chicago; B.A. in English, Cornell University, “U.S. Competitiveness in Science and Technology”, 2008,
http://www.rand.org/pubs/monographs/2008/RAND_MG674.pdf, SM]
Despite the rhetoric and the intensive action on the Hill, some voices called for restraint. The reports and testimony making a case for or
arguing against an S&T crisis are part of an ongoing policy debate.
One line of counterargument is that such
warnings are far from unprecedented and have never resulted in the
crisis anticipated. The author of a Washington Watch article noted that “similar fears of a STEM6
workforce crisis in the 1980s were ultimately unfounded” (Andres, 2006). Neal McCluskey, a policy analyst from
the Cato Institute, noted that similar alarm bells were sounded decades earlier (and in his view, have had
underlying political agendas):
Using the
threat of international economic competition to bolster federal control of education is nothing
new. It happened in 1983, after the federally commissioned report A Nation at Risk admonished that ‘our once unchallenged
preeminence in commerce, industry, science, and technological innovation is being overtaken by competitors throughout the world,’ as well
as the early 1990s, when George Bush the elder called for national academic standards and tests in order to better compete with Japan.
(McCluskey, 2006)
Roger Pielke of the
University of Colorado observed that such issues as poor student performance have an
even longer history, with no negative outcomes. Arguments that “certain other countries produce a
greater proportion of scientist and engineering students or that those students fare better on tests of
achievement . . . have been made for almost 50 years,” he stated, “yet over that time frame the U.S.
economy has done quite well” (Pielke, 2006).
***other answers***
A2 power grid impacts
No escalation – status quo measures protect the power grid.
DoE 9/10/04 – U.S. Department of Energy [Energy Efficiency and Renewable Energy, “Is Our Power
Grid More Reliable One Year After the Blackout?”, State Energy Program, Sept.-Oct./04,
http://www.eere.energy.gov/state_energy_program/feature_detail_info.cfm/fid=32?print]
The U.S.-Canada Power System Outage Task Force publication, The August 14, 2003 Blackout One Year
Later: Actions Taken in the United States and Canada to Reduce Blackout Risk (PDF 236 KB) Download
Acrobat Reader, details the actions taken to improve grid reliability. For example, shortly after the Task
Force identified direct causes of the August 14 blackout, the Federal Energy Regulatory Commission
(FERC) and NERC set to correct them. The U.S. Canada Power System Outage Task Force conducted a
massive investigation into the causes of the blackout and made 42 recommendations to improve power
system operations. In December 2003, FERC ordered FirstEnergy to study the adequacy of transmission
and generation facilities in northeastern Ohio. The results were submitted in April 2004 and
recommendations are now being incorporated into FirstEnergy's operations and strategic plan. In
February 2004, NERC directed FirstEnergy, the MISO, PJM Interconnection, and the East Central Area
Reliability Coordination Agreement on actions each organization needed by June 30, 2004, to reduce the
potential of future blackouts. NERC then approved and verified their compliance plans. In response to
the April 2004 Final Report, FERC took the following actions to clarify and develop reliability standards:
* Commissioned a firm to analyze transmission line outages related to inadequate tree trimming — a
major contributor to the August 14 blackout — and determine best practices for preventing this
problem. See the "Utility Vegetation Management and Bulk Electric Reliability Report from the Federal
Energy Regulatory Commission" (PDF 92 KB). * Began to require transmission owners to file reports on
their tree trimming practices. * Affirmed the need to strengthen and clarify NERC's operating
reliability standards. Meanwhile, NERC strengthened its policies on emergency operations, operations
planning, and reliability coordinator procedures and will include compliance metrics in its operating
policies and planning standards by February 2005. New standards for managing vegetation and
calculating transmission line ratings are also being developed; procedures for training and certifying
operators are being revised.
Transportation reform bad – Grizzly bears
New transportation infrastructure increases Bear highway presence
Serveen, Waller, 05 (Christopher, John, EFFECTS OF TRANSPORTATION INFRASTRUCTURE ON
GRIZZLY BEARS IN NORTHWESTERN MONTANA, http://www.bioone.org/doi/full/10.2193/0022541X%282005%29069%5B0985%3AEOTIOG%5D2.0.CO%3B2)
Highways and railroads have come under increasing scrutiny as potential agents of population and
habitat fragmentation for many mammalian species, including grizzly bears (Ursus arctos). Using Global
Positioning System (GPS) technology and aerial Very High Frequency (VHF) telemetry, we evaluated the
nature and extent of trans-highway movements of 42 grizzly bears along the U.S. Highway 2 (US-2)
corridor in northwest Montana, USA, 1998–2001, and we related them to highway and railroad traffic
volumes and other corridor attributes. We employed highway and railroad traffic counters to
continuously monitor traffic volumes. We found that 52% of the sampled population crossed highways
at least once during the study but that crossing frequency was negatively exponentially related to
highway traffic volume. We found that grizzly bears strongly avoided areas within 500 m of the
highway and that highway crossing locations were clustered at a spatial scale of 1.5 km. Most highway
crossings occurred at night when highway traffic volume was lowest but when railroad traffic was
highest. Highway crossing locations were flatter, closer to cover in open habitat types, and within
grassland or deciduous forest vegetation types. Nighttime traffic volumes were low, averaging about 10
vehicles/hr, allowing bears to cross. However, we project that US-2 may become a significant barrier to
bear movement in 30 years if the observed trend of increasing traffic volume continues.
Large Increase In Human Bear Encounters
McLendon, 11(Russell, Are grizzly bears becoming unbearable?, http://www.mnn.com/earthmatters/translating-uncle-sam/stories/are-grizzly-bears-becoming-unbearable)
"We are seeing increases in conflicts," says Chris Servheen, who coordinates grizzly rehab for the U.S.
Fish and Wildlife Service, although he blames the violence mainly on population shifts: "We have
increases of bears and increases of people in bears' habitat." A grizzly thought to be protecting its cub
attacked seven backpackers earlier this month in a remote part of Alaska, one of several recent assaults
to make international headlines. Grizzlies also killed two people near Yellowstone last year, and
Wyoming's human-grizzly conflicts hit a record of 251 in 2010. ("Conflicts" include attacks on property,
livestock and humans.) Not only is that high for one state, but it's 76 percent above average for the
entire Greater Yellowstone Ecosystem (GYE), which normally has about 142 conflicts a year. And the
problem is expected to get worse.
***NIB NEG – off-case***
Spending disad turns case
Deficits turn private investment
Elmendorf 9 Douglas W. is the director of the Congressional Budget Office, economist with
experience throughout the federal government, Letter to Honorable Judd Gregg Ranking Member
Committee on the Budget,
http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/96xx/doc9619/gregg.pdf
Most of the budgetary effects of the Senate legislation occur over the next few years. Even if the fiscal
stimulus persisted, however, the short-run effects on output that operate by increasing demand for
goods and services would eventually fade away. In the long run, the economy produces close to its
potential output on average, and that potential level is determined by the stock of productive capital,
the supply of labor, and productivity. Short-run stimulative policies can affect long-run output by
influencing those three factors, although such effects would generally be smaller than the short-run
impact of those policies on demand. In contrast to its positive near-term macroeconomic effects, the
Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar
proposals. The principal channel for this effect is that the legislation would result in an increase in
government debt. To the extent that people hold their wealth as government bonds rather than in a
form that can be used to finance private investment, the increased debt would tend to reduce the stock
of productive capital. In economic parlance, the debt would “ crowd out ” private investment. (Crowding
out is unlikely to occur in the short run under current conditions, because most firms are lowering
investment in response to reduced demand, which stimulus can offset in part.) CBO’s basic assumption
is that, in the long run, each dollar of additional debt crowds out about a third of a dollar’s worth of
private domestic capital (with the remainder of the rise in debt offset by increases in private saving and
inflows of foreign capital). Because of uncertainty about the degree of crowding out, however, CBO has
incorporated both more and less crowding out into its range of estimates of the long-run effects of the
Senate legislation.
Politics links – NIB unpopular both parties
Plan unpopular – opposition from democrats and republicans
Marks, 4/11/11
Allan-; “US Infrastructure: Challenges, Politics, and Opportunities”; Infrastructure Journal;
http://www.milbank.com/images/content/6/6/6634/MARKS-US-Infrastructure-Infrastructure-Journal04-11-2011-.pd.pdf. DS
Lack of agreement on a longer term solution hinders long-term planning for needed infrastructure improvements to be funded
by federal dollars. In July 2011, the House GOP leadership (including House Transportation & Infrastructure Committee Chairman
John Mica (Rep-Fla)) expressed support for future transportation investment only up to the level of Highway Trust Fund revenues,
which could result in funding at 30 per cent less than current levels of investment. The Highway Trust Fund depends mainly on fuel
taxes and will be insufficient to meet anticipated needs at projected revenue levels. More recently, Chairman Mica has indicated that he
and his colleagues may consider a six-year surface transportation reauthorization bill, which would maintain current levels of federal
highway and public transportation investment, but there remains no agreement on how to pay for it and no appetite to raise
federal gasoline taxes. Nonetheless, this development may be indicative of a bipartisan shift in the House and Senate in favor of greater
levels of transportation investment. Still, with 2012 being an election year, progress toward a long term reauthorization bill is caught in
the tricky political balance of weighing job creation, congestion relief, and long term economic growth against fiscal pressures, revenue
constraints, and the need for deficit reduction. On September 8, 2011, President Obama urged the creation of a National
Infrastructure Bank and discussed his plans to spend US$10 billion on infrastructure, such as transportation, water and energy
projects, in a speech before Congress. While the planned National Infrastructure Bank originated from the Kerry-Hutchison
bipartisan legislation in the Senate, it also has opponents on both sides. Some opponents believe the plan does not devote enough
resources to infrastructure projects. Other opponents think supporting state infrastructure banks or adding capacity to TIFIA
are better (or at least quicker) solutions than creating a new institution.
Bipartisan disagreement
Greene 10/6/11
Brian -; “Is Obama's National Infrastructure Bank the Answer on Jobs? Feature of Obama employment
bill has backers in business, Congress but could get lost in politicking”; US News.
http://www.usnews.com/news/articles/2011/10/06/is-obamas-national-infrastructure-bank-theanswer-on-jobs_print.html. DS
[Rick Newman: Who Would Win Under Obama's Jobs Plan] While the panel seemed to be unanimous that a federally regulated
infrastructure bank is a good idea, Washington Post columnist Steven Pearlstein raised the question of whether or not people
should be optimistic about this component of the American Jobs Act when so much of the bill is currently undergoing bipartisan
disagreement. Sperling encapsulated the tenor of the forum during his conversation with Pearlstein, saying, "What do you want us to
do? Fold our cards, or go out and make the case?" That case seems to sit well with Democrats and business leaders interested in
investing in large-scale American building projects, but the National Infrastructure Bank will be a much harder sell for those
already wary of government influence in matters of money.
Congress will flog your plan
Utt 11, Victor Utt is a senior research fellow at Heritage, Infrastructure “Bank” Doomed to Fail,
http://www.heritage.org/research/commentary/2011/09/infrastructure-bank-doomed-tofail?query=Infrastructure+%2525E2%252580%252598Bank%2525E2%252580%252599+Doomed+to+Fail
President Obama
remains enamored of an “infrastructure bank,” an idea flogged, in one shape or
another, for several years now. All of the proposals floated to date involve creating a new federal
bureaucracy that would provide loans and grants for construction or repair projects sought by state or local governments. In
some proposals, those funds would be provided via the congressional appropriations process. In others, the bank simply would
borrow the money. But no matter what the source of the cash, this hard fact remains: An infrastructure bank would do little to spur
the economic recovery — and nothing to create new jobs.
Your aff was consistently rejected in committee
Utt 11, Victor Utt is a senior research fellow at Heritage, Infrastructure “Bank” Doomed to Fail,
http://www.heritage.org/research/commentary/2011/09/infrastructure-bank-doomed-tofail?query=Infrastructure+%2525E2%252580%252598Bank%2525E2%252580%252599+Doomed+to+Fail
The president’s fixation on an infrastructure bank as a means of salvation from the economic crisis at hand is — to be polite
about it — a dangerous distraction and a waste of time. It also is a proposal that has been rejected consistently by
bipartisan majorities in the House and Senate transportation and appropriations committees.
Politics links – GOP hates NIB
Republicans have always blocked transportation reform
Johnson 4/30/12
[Dave Johnson, Fellow at Campaign for America’s Future, “Transportation and Infrastructure =
IMMEDIATE Jobs = Deficit Reduction, 4/30/2012, http://www.ourfuture.org/blogentry/2012041830/transportation-infrastructure-immediate-jobs-deficit-reduction]
We have been deferring infrastructure maintenance since the Reagan years, but in recent years Republicans have doubled down
on blocking public investment, calling it "just more government spending" and even "socialism." And, they complain, construction
projects help union members.¶ So Republicans
have blocked bill after bill to repair and modernize the
infrastructure, or to maintain and modernize out aging transportation system, build high-speed rail, etc. The President
discussed this obstruction in his speech today,¶ ...over the last year, I’ve sent Congress a whole series of jobs
bills that would have put your members back to work. But time after time, Republicans have gotten together and said
“no.” I sent them a jobs bill that would have put hundreds of thousands of construction workers back to work repairing our roads, bridges,
schools and transit systems, along with saving the jobs of cops, teachers, and firefighters, and creating a new tax cut for businesses. They said
“no.” Then, I sent them just the part of that bill that would have created those construction jobs. They said “no.” And we’re seeing it again right
now. As we speak, House Republicans are refusing to pass a bipartisan bill that could guarantee work for millions of construction workers.
Seeing a pattern here? That makes no sense. Congress should do the right thing and pass this bill right away.
Republicans will fight NIB passage
Miller 12/1/11
Joyce-; “The Sad Story Of The National Infrastructure Bank”;
http://www.sallan.org/Snapshot/2011/12/the_sad_story_of_the_national_infrastructure_bank_1.php#f
n1text. DS
So how was this important bill derailed? Republicans have not allowed any legislation proposed by the President to pass, hence the
party-line negative vote in the Senate, even by those Republicans who support the bank. Opposition has come
from conservatives and tea party supporters, particularly in the House, who view the bank as an undesirable expansion of the role of
government and as a new form of government expenditure, something seen as inherently bad. The conservative priority of reducing
the national debt creates pressure to block any new spending, no matter how necessary the program. Senator Hatch (Rep-Utah) argued
during the floor debate that the proposal was just another spending bill while Senator Lieberman stated "While the goals of the infrastructure
bill are worthy, I believe that the most important thing we can do to improve our economy... is to dramatically reduce the debt... unless we
can put our economy on sound financial footing by reining in our debt, all additional stimulus efforts will be for naught."[1]
NIB ridiculed by Republicans Members- needs a strong push
Laing 11 (Keith Laing, 10/12/11 The Hill, Keith Laing is a national political journalist who works for The Hill newspaper in Washington, D.C.
At The Hill, Keith covers transportation policy in Congress and manages the paper’s Transportation Report blog. Prior to coming to The Hill,
Keith worked for the News Service of Florida, where he tracked the Florida state legislature with a focus on transportation and energy issues,
“House Republicans: White House plan for infrastructure bank ‘dead on arrival’“http://thehill.com/blogs/transportation-report/highwaysbridges-and-roads/187049-gop-infrastructure-bank-dead-on-arrival-in-the-house-)
President Obama’s national infrastructure bank is dead on arrival, the Republican chairman of the House Transportation Committee said
Wednesday. At a hearing ostensibly held to discuss the merits of the bank, Rep.
John Mica (R-Fla.) ridiculed the proposal as
something that would cost more jobs than it would create. “A national infrastructure bank, as
proposed … is dead on arrival in the House of Representatives,” Mica said. “If you want a recipe to not get people
to work, adopt that proposal.” Democrats fired back by questioning why Mica was holding a subcommittee hearing on the proposal when it
appeared he had already decided against the plan. “The
majority seems to have already made up its mind about this
proposal,” said Rep. Eddie Bernice Johnson (D-Texas). The evidence, Johnson said, was in the very name of the hearing:
“National Infrastructure Bank: More Bureaucracy and More Red Tape.” The infrastructure bank is a key component of
Obama’s jobs package, which Senate Democrats are now breaking into smaller parts after the
measure failed to move forward in the upper chamber on Tuesday night.
Politics links – Mica hates NIB
Mica hates NIB – wants SIB
Laing 11 (Keith Laing, 09/08/11 “Mica opposes Obama’s call for national infrastructure bank”, The Hill,
Keith Laing is a national political journalist who works for The Hill newspaper in Washington, D.C. At The
Hill, Keith covers transportation policy in Congress and manages the paper’s Transportation Report blog.
Prior to coming to The Hill, Keith worked for the News Service of Florida, where he tracked the Florida
state legislature with a focus on transportation and energy issues,
http://thehill.com/blogs/transportation-report/highways-bridges-and-roads/180481-gop-chairmanopposes-obamas-call-for-national-infrastructure-bank)
The Republican chairman of the House Transportation and Infrastructure Committee said Thursday
evening that he is opposed to the call for a national infrastructure bank President Obama made in his
speech to a joint session of Congress.
Rep. John Mica (Fla.) said he thought Congress should encourage individual states to create their own
infrastructure banks, arguing as he has in the past that it would give them more flexibility to design
transportation projects that fit their own needs.
“While the President reconfirmed that our highways are clogged and our skies are congested, his well
delivered address provided only one specific recommendation for building our nation’s infrastructure,”
Mica said in a news release. “Unfortunately, a National Infrastructure Bank run by Washington
bureaucrats requiring Washington approval and Washington red tape is moving in the wrong
direction. A better plan to improve infrastructure is to empower our states, 33 of which already have
state infrastructure banks.”
Elections links – NIB controversial
NIB is a huge political firestorm- already going to be a huge issue going into
the election
Mitchell 11 (JOSH MITCHELL, Wall Street Journal, August 15, 2011 “Plan for Highway Bank Faces Uphill
Battle”, http://online.wsj.com/article/SB10001424053111904823804576500692477795126.html)
President Barack Obama is pressing Congress to create a new "infrastructure bank" to finance highway
and rail construction, create jobs and jump-start the stalled economy, but the proposal faces hurdles on
Capitol Hill. White House officials have described the bank as a new government entity that would make
loans to support public-works projects of regional and national significance with private funding. That
includes interstate highways, rail lines linking Midwest farmers to West Coast ports, and equipment for
planes to link up to a new satellite-based air-traffic-control network. By luring more private capital to
infrastructure projects with low-interest loans, the bank is designed to provide a long-term solution to
more immediate problems. The law authorizing the gasoline tax that provides the bulk of federal
transportation money expires Sept. 30, and the tax, currently at 18.4 cents a gallon, isn't generating
enough funds to keep pace with the nation's infrastructure needs anyway. But the White House, House
Republicans and some Senate Democrats differ on the best way to encourage more private
investment in public infrastructure. Those disagreements are likely to be swept into a broader debate
over how to shrink the federal deficit that could stretch to the November 2012 elections. Some
lawmakers fear that once they return from their August recess, a political fight over spending could
delay reauthorization of the law for weeks or even months. The government would lose up to $100
million a day in gas-tax revenue, payments to states would be halted and construction jobs would likely
be lost if the law lapses, business groups warn. The U.S. Chamber of Commerce and others say they
support the idea of an infrastructure bank but worry that the administration is giving short shrift to
the more urgent problem. "They have not focused on the need to pass a highway and transit bill," said
Janet Kavinoky, the Chamber's chief lobbyist on transportation policy, noting that several years could
pass before large-scale projects supported by the bank would get under construction. "We are very
frustrated that they continue to hold out the bank as a substitute for doing a highway and transit bill." A
White House official said the administration has been in touch regularly with members of Congress to
push for both a highway bill and a national infrastructure bank. The official said "no one is taking this for
granted," referring to passage of the highway bill, and added that when the president talks about an
infrastructure bank, he is referring to his long-term vision of how to reform transportation policies. In a
time of dwindling public resources, said Jason Furman of the White House economic council, "you want
to stretch the dollars you do have farther." Under the White House plan, the infrastructure bank would
augment current highway and transit programs. The bank would receive $30 billion over six years and
would issue grants, loans and other financial tools. The president's budget proposal in February
suggested the bank reside in the Transportation Department and be controlled by an executive director
and board of officials from various federal agencies. Projects would need to meet "rigorous" criteria to
ensure they benefit the maximum number of people, preventing more "bridges to nowhere." Some
Republicans say that such a bank would simply add a new bureaucracy in Washington and shift
decision-making from Congress to the executive branch. "How this project would be funded, what it
would fund and how those funds would be repaid are critical questions the Obama administration has
not answered yet," said Kevin Smith, a spokesman for House Speaker John Boehner (R., Ohio). "If this is
more of the same 'stimulus' spending, we won't support it."
States cp – solves NIB 1/4
State Infrastructure Banks solve
Puentes 11 ( Puentes, Robert, director of the Metropolitan Infrastructure Initiative at the Brookings Institute, “ Transformative
Infrastructure to Boost Exports and Manufacturing”, November 16, 2011, http://www.brookings.edu/research/testimony/2011/11/16infrastructure-puentes)
Another is for states to establish a state infrastructure bank (SIB) or enhance it if one is already in place.
Beginning in 1998 SIBs have become an attractive financing tool and 33 states have established SIBs to
finance transportation projects. Most of this support comes in the form of below-market revolving
loans and loan guarantees. States are able to capitalize their accounts with federal transportation
dollars but are then subject to federal regulations over how the funds are spent. Others, including
Kansas, Ohio, Georgia, and Florida, capitalize their accounts with a variety of state funds and are not
bound by the federal oversight which they feel helps accelerate project delivery . Other states—such
as Virginia, Texas, and New York—are also examining ways to recapitalize their SIBs with state funds.[8]
Better project analysis means SIB’s solve
Slone 11 (Sean Slone is a Health Policy Analyst at Council of State Governments, “State Infrastructure Banks”,
July 5, 2011,
http://knowledgecenter.csg.org/drupal/content/state-infrastructure-banks)
When transportation projects are financed in a traditional way, funds from a state department of
transportation or the federal Highway Trust Fund are spent and two types of risk are assumed. Projects
are at risk of delay as state officials wait for the state or federal funds to become available, which may
increase the costs and delay the project’s benefits. Secondly, states face the risk that a poorly selected
project will fail to produce social or economic benefits and tie up scarce capital resources that could
have gone to other potentially more successful projects. Both of those risks are diminished with state
infrastructure bank financing . First, projects don’t have to wait for funding and delays and cost
overruns are avoided. Secondly, a state infrastructure bank has a built-in project evaluation process.
Projects are assessed based on their financial viability, which provides a level of economic discipline
that is not always present with traditional state project funding. Better, more benefit-producing
projects can be the result.4
States cp – solves NIB 2/4
SIB allows states more flexibility to fit their needs
Laing, 2011
Keith Laing, Congressional Reporter, “Mica opposes Obama’s call for national infrastructure bank”
September 8,
http://thehill.com/blogs/transportation-report/highways-bridges-and-roads/180481-gop-chairmanopposes-obamas-call-for-national-infrastructure-bank
The Republican chairman of the House Transportation and Infrastructure Committee said Thursday
evening that he is opposed to the call for a national infrastructure bank President Obama made in his
speech to a joint session of Congress. Rep. John Mica (Fla.) said he thought Congress should encourage
individual states to create their own infrastructure banks, arguing as he has in the past that it would
give them more flexibility to design transportation projects that fit their own needs. “While the
President reconfirmed that our highways are clogged and our skies are congested, his well delivered
address provided only one specific recommendation for building our nation’s infrastructure,” Mica said
in a news release. “Unfortunately, a National Infrastructure Bank run by Washington bureaucrats
requiring Washington approval and Washington red tape is moving in the wrong direction. A better plan
to improve infrastructure is to empower our states, 33 of which already have state infrastructure
banks.”
SIB have been proven to be efficient
Ridley 2011
Gary Ridley, Secretaty of Transportaion of Oklahoma, "NATIONAL INFRASTRUCTURE BANK: MORE
BUREAUCRACY & MORE RED TAPE" October 12,
http://republicans.transportation.house.gov/Media/file/TestimonyHighways/2011-10-12%20Ridley.pdf
Therefore, as we turn our attention to the work of identifying ways to modernize, expand and maintain
our aging and deteriorating infrastructure, we must remain mindful that long term, consistent funding
is critically important to the development and delivery of transportation improvement projects.
Extremely difficult decisions related to the care, preventative maintenance, reconstruction and
expansion of the transportation system must be made every hour of every day. These decisions and
investment strategies are predicated on the basic, critical needs of the system and the clear
understanding of long term resources available to address these needs. Certainly, when properly vetted
and administered, a variety of financing methodologies can be brought to bear in order to help
successfully deliver significant transportation improvements that are out of the reach of immediately
available transportation funding sources. In recent times, the utilization of Grant Anticipated Revenue
Vehicle bonds (GARVEE), Transportation Infrastructure Finance and Innovation Act (TIFIA) financing,
Public / Private Partnerships, Build America Bonds, state infrastructure banks and other such
methodologies have proven effective in financing certain, well defined transportation system needs.
States cp – solves NIB 3/4
SIB allows for maximum flexibility in spending.
Mica 2011
John Mica, Congressman for Florida, Rollcall “Mica: States Will Have More Flexibility Without a National
Infrastructure Bank” July 21
http://www.rollcall.com/features/Transportation-2011_Policy-Briefing/policy_briefings/John-MicaNational-Infrastructure-Bank-207562-1.html
After years of deficit spending, the United States finds itself in dire economic straits. One need look no
further than the current debate over the nation’s budget and debt limit. When the economy was
stronger, it was easier for the government to spend money it did not have on programs it could not
afford. But as the economy continues to struggle, unemployment remains high, and Americans across
the country tighten their belts more every day. Congress must act responsibly to get our fiscal house in
order. A framework released by Transportation and Infrastructure Committee Republicans in July to
reauthorize federal surface transportation programs is a fiscally responsible proposal to increase the
value and effect of our limited infrastructure resources while holding to spending levels that are
supported by the amount of transportation user fees actually collected. This proposal is the only
initiative offered that protects the Highway Trust Fund and ensures its future solvency. This trust fund is
maintained by user fees — gas taxes paid by motorists at the pump — dedicated specifically for
transportation improvements. The trust fund provides guaranteed long-term funding to states for
critical infrastructure planning and projects. However, in recent years the government has been
overspending from the trust fund. Last year, we spent about $50 billion from the trust fund but
collected only $35 billion in revenue. Consistent overspending has necessitated the transfer of $35 billion from the general fund
into the trust fund over the past three years. The Republican proposal restores accountability to federal transportation spending and puts the
“trust” back in the trust fund by aligning spending with revenues. Other proposals would either continue the current practice of deficit spending
for transportation, which would bankrupt the Highway Trust Fund in less than two years; rely on a gas tax increase that will never pass through
an increasingly conservative Congress; or create a national infrastructure bank to fund projects. Our initiative protects the trust fund. Ensuring
the viability of this reliable source of funding will allow states to plan major multiyear projects. Significant reforms and improvements for
transportation programs will increase the investment value of available infrastructure resources. By leveraging limited funds more effectively,
the level of infrastructure investment is increased. But a national infrastructure bank is not the best way to achieve this leverage.
The
Federal Highway Administration estimates that for every federal dollar invested in state infrastructure
banks, $9.45 in loans for transportation projects can be issued. To encourage states to better utilize
SIBs, the Republican proposal increases the percentage of federal highway funding that a state can
dedicate to a SIB from 10 percent to 15 percent, and states will receive a specific amount of funding
that can be used only to fund SIBs. Many states currently have infrastructure banks. The proposal
builds upon this existing SIB structure rather than increasing the size of the bloated federal bureaucracy,
as some advocate, by creating a national infrastructure bank. States will have more flexibility to make
project decisions. The proposal also expands the successful Transportation Infrastructure Finance and Innovation Act program. By
dedicating $6 billion to TIFIA, $60 billion in low-interest loans to fund at least $120 billion in transportation projects will be generated.
Additional TIFIA funding will help meet demand for credit assistance for projects, enabling increased leveraging of Highway Trust Fund dollars
with state, local and private-sector investment. The new fiscally responsible initiative streamlines the federal bureaucracy in other ways as well.
There are more than 100 federal surface transportation programs, many of which are duplicative or do not serve a national interest. An
unprecedented consolidation and elimination of about 70 of these programs under this proposal will decrease the size of the federal
bureaucracy, freeing up funds that can be invested in infrastructure instead of siphoned off to maintain unnecessary programs.
States are
provided more authority and flexibility to address their most critical infrastructure needs. However, new
performance measures and transparency requirements will hold states accountable for their spending decisions. As this responsible Republican
proposal moves forward, we welcome suggestions and ideas for a final bill that protects the Highway Trust Fund, reforms programs, downsizes
the bureaucracy,
cuts red tape and more effectively leverages our limited resources.
States cp – solves NIB 4/4
SIBs can be easily tweaked to achieve the same things as a NIB
Snyder 2011
Tanya Snyder, Editor at Streetsblog Capitol Hill, Streetsblog, “Does the Elusive Infrastructure Bank
Already Exist?” October 8
http://dc.streetsblog.org/2011/10/07/does-the-infrastructure-bank-of-our-dreams-already-exist/
They go on to say, “A newly expanded Export-Import Bank could facilitate private-sector investment in
projects such as repairing roads and bridges, modernizing the energy grid, and maintaining our dams
and levees — creating jobs while rebuilding the country.” It’s a compelling argument, especially in the
face of skepticism about creating a new quasi-government entity, especially in a political environment
suspicious of Big Government. Some fear an I-bank will be too much like Fannie Mae and Freddie Mac;
some would rather just stick with the TIFIA loan program; others want to encourage state infrastructure
banks instead of a big national one. If making a few tweaks to an existing structure could yield the
same benefits as a national infrastructure bank, isn’t that easier?
SIBs operate successfully now
Utt 2011
Ronald Utt, Herbert and Joyce Morgan Senior Research Fellow at The Heritage Foundation, Hawaii
Reporter, October 30,
http://www.hawaiireporter.com/the-limited-benefits-of-a-national-infrastructure-bank/123
This committee’s draft proposal for reauthorization of the federal highway program includes a section
whose purpose is to enhance and expand the role of state infrastructure banks in transportation
funding. Although the legislative language has not yet been made available, the draft proposal says that
the new approach:¶ will reward states that create and capitalize state Infrastructure Banks to provide
loans for transportation projects. The percentage of federal funding that a state can dedicate to a state
infrastructure bank will be increased from 10 percent to 15 percent and states will receive a specific
amount of funding that can only be used to fund State Infrastructure Banks. At present, there are
several state infrastructure banks (SIBs) in operation, and their existence, or lack thereof, reflects a
series of past federal SIB legislative initiatives enacted in 1991, 1995, 1997, and 1998.
Kansas proves
Plautz 2011
Jason Plautz, Reporter at Environment & Energy Publishing, New York Times “In I-Bank Debate, States
Provide Successful Model” September 8
http://www.nytimes.com/gwire/2011/09/08/08greenwire-in-i-bank-debate-states-provide-successfulmod-49268.html?pagewanted=all
Most of the state banks were established under authority from the 2005 federal highway authorization bill, although some were set up as early
as the 1990s.
Many have seen a relatively modest investment of state and federal money turn into
hundreds of millions of dollars in loan guarantees. "In Kansas, we have communities that are small and couldn't do their
projects otherwise. They couldn't get a bank to loan them money because of credit or they couldn't go into the bond market because of their
"We can cover huge projects or a
small community." Kansas -- which used $25 million of state money in 2004 for its first equity transfer
-- has now funded some 120 projects with the TRF bank. Martin said that as of fiscal 2010, when it
stopped loaning off the initial transfer, the bank had approved $135 million in loans off that initial $25
million. That places it among the largest and most successful state banks in the country.
size," explained Danielle Martin, program manager of the Kansas Transportation Revolving Fund.
States cp – efficiency
SIB’s allow for more efficient project investment
AASHTO 11 ( Center for Excellence in Project Finance & U.S. Department of Transportation, “ State Infrastructure Banks:
Credit
Enhancement”, 2011, http://www.transportationfinance.org/funding_financing/financing/credit_assistance/state_infrastructure_banks.aspx)
SIBs serve as a flexible and useful tool to meet a state's project financing demands, stretching both
Federal and state dollars. Through the SIB financing mechanism, states can leverage additional
transportation resources, accelerate construction timelines for projects with dedicated revenue
sources, and recycle assistance for future transportation projects. SIBs can be used in conjunction with
traditional finance approaches and other innovative tools to maximize transportation infrastructure
investment. By offering SIB support for a project, the sponsor may be able to attract private, local, and
additional state financial resources, leveraging a small amount of SIB assistance into a larger dollar
investment. Alternatively, SIB capital can be used as collateral to borrow in the bond market or to
establish a guaranteed reserve fund. Loan demand, timing of needs, and debt financing considerations
are factors to be weighed by states in evaluating a leveraged SIB approach.
States cp – big projects
SIB’s can fund large projects
Slone 11 (Sean Slone is a Health Policy Analyst at Council of State Governments, “State Infrastructure Banks”,
July 5, 2011,
http://knowledgecenter.csg.org/drupal/content/state-infrastructure-banks)
State infrastructure banks can help states stretch their state and federal dollars and meet the
demands of financing large, impactful, long-term infrastructure projects . When government agencies
and authorities must seek yearly grants and allocations to finance projects, the completion of those
projects can be delayed for months or years. State infrastructure banks can identify, promote and lend
money to creditworthy transportation projects to ensure they’re built within a reasonable timeframe
and in a financially sustainable way. And because these banks act as a “revolving fund,” more projects
can ultimately be financed.
States cp – tax mechanism
Gas and sales tax gives states new ways to fund transportation
Christman & Riordan 11 (Anastasia Christman is senior policy analyst at the National Employment Law Project and Christine Riordan
Associate Dean at Neeley School of Business at TCU Director, Institute for Leadership Advancement at Terry College of Business, University of
Georgia Assistant and Associate Professor, Terry College of Business, at University of Georgia, “ State Infrastructure Banks: Old Idea Yields New
Opportunities for Job Creation”, December 2011, http://nelp.3cdn.net/fadb21502631e6cb79_vom6b8ccu.pdf)
State and Local Strategies for Transportation Funding¶ Many
states recognize they must increase funding for their
departments of transportation. As ¶ lawmakers and their constituents engage in this dialogue, advocates should urge that
some of the ¶ revenues be used to fund an SIB. Managed properly, an SIB can attract private capital to ¶ infrastructure
projects, and the revolving loan structure can, with prudent choices in spending, make ¶ the SIB self-sustaining. ¶ Several states are
considering an increase in their gasoline taxes. “Essentially, our needs cannot be ¶ met without new dedicated taxes and
fees,” noted the head of the Northern Virginia Transportation ¶ Alliance.¶ 62¶ The Virginia gas tax hasn’t been raised since 1987. Nearby,
Maryland lawmakers will ¶ consider a 15-cent gas tax increase during their 2012 session and have
proposed creating a “lockbox” ¶ to ensure the money remains dedicated to transportation
improvements.¶ 63¶ In Michigan, lawmakers ¶ have proposed repealing the state gas tax entirely, and replacing it with an increase in the
sales tax ¶ with the extra revenues going to the Michigan Transportation Fund.¶ 64¶ Other states have rejected this ¶ option. In North Carolina,
state law pegs the gas tax to the cost of wholesale fuel prices, allowing it ¶ rise and fall with gasoline prices. However, the state’s House of
Representatives recently voted to ¶ block an increase scheduled for January 2012. North Carolina Department of Transportation officials ¶
estimate the resulting cut in revenues will mean canceling plans for repaving 400 miles of highways ¶ and replacing 72 bridges, costing an
estimated 2,800 jobs.¶ 65¶ Similarly, in Iowa, the governor has ¶ rejected a gasoline tax increase recommended by a specially appointed
citizens’ panel.¶ 66¶ Iowa’s gas ¶ tax hasn’t been raised since 1989. 10¶ Increasing
the gasoline tax is controversial, and
advocates need to make sure that the revenue is used ¶ responsibly and equitably. Often, consumers in
urban areas pay more in tax receipts than they ¶ receive in allocations, effectively subsidizing suburban sprawl.
One solution is to ensure that gasoline ¶ taxes may also be used to pay for improvements to public
transit, congestion relief and air-quality ¶ improvement projects that can bring benefits—and jobs—
into dense urban areas. Furthermore, ¶ gasoline taxes can hit low-income workers with few transportation choices particularly hard.
When ¶ Minnesota passed its gasoline tax increase in 2008, the legislature included a tax credit for those in ¶ the lowest tax brackets to help
offset the increased costs.¶ 67¶ Drafting
legislation that allows today’s ¶ gasoline taxes to be used to develop
mass transit systems is a smart tactic that can help all workers ¶ access jobs today and prepares for a future when
increasing fuel-efficiency and evolving technologies ¶ that allow for alternative work patterns will limit revenues from a gasoline tax. ¶ States
are also assessing the possibility ¶ of increasing vehicle registration fees. ¶ Michigan’s governor has proposed a fee
¶ of up to $40
per car to finance local road ¶ projects.¶ 68¶ Texas legislators have ¶ proposed increasing their fees by about ¶ $50.¶ 69¶
Advocates need to ensure that ¶ vehicle fees are tied to the value of the ¶ vehicle; an across-the-board increase ¶ would be regressive, forcing
drivers of ¶ economy cars to pay the same amount ¶ as owners of luxury vehicles. ¶ Furthermore, advocates in Minnesota ¶ believe that their
voter-passed sales tax ¶ on vehicle sales contains too many ¶ exemptions to capture the full revenue ¶ opportunities of this strategy. The ¶
Minnesota Transportation Alliance has ¶ estimated that over $100 million ¶ annually is lost to these loopholes.¶ 70¶ Finally,
lawmakers
should consider new ¶ options if we are going to avert ¶ widespread collapse of our ¶ infrastructure,
keep our economies ¶ competitive and create quality jobs. ¶ While general sales taxes ask even those ¶ without cars to
finance road ¶ improvements, residents of several ¶ states and cities have agreed to pay more at the
cash register to preserve transportation systems.¶ 71¶ ¶ Half-a-dozen counties in Minnesota have acted
on provisions in that state’s 2008 transportation bill ¶ allowing them to levy a sales tax dedicated to transportation
improvements. While the legislation did 11¶ not require voter approval of these taxes, in 2004, voters in Maricopa County, Arizona,
approved a ¶ similar sales tax increase of a half-cent over 20 years to fund regional transportation efforts there.
In ¶ late 2008, at the height of the Great Recession, Los Angeles voters approved Measure R, agreeing to a ¶ half-cent sales tax that is
projected to raise between $34 billion to $40 billion over the next 30 years ¶ to fund traffic relief and
transportation upgrades.¶ 72¶ It is important to note, however, that in the ¶ ongoing sluggish economy, sales taxes may not raise
anticipated revenues. The Arizona tax did not ¶ result in as much revenue as forecast in 2010, but it did raise $299 million that
will go into the ¶ construction of freeways, improving existing freeways and arterial streets, and
expanding public ¶ transit systems.¶ 73
States cp – solves competitiveness
All 50 states do international business
Department of Treasury 12
(A Report Prepared by the Department of the Treasury with the Council of Economic Advisers,
“A New Economic Analysis of Infrastructure Investment,” March 23, 2012,
http://www.treasury.gov/resource-center/economicpolicy/Documents/20120323InfrastructureReport.pdf)
American firms rely on infrastructure to enable efficient supply chain management and the
transportation of goods to the point of sale. Investments in transportation infrastructure
would allow firms in all 50 states to have the opportunity to benefit from growth in foreign
markets. According to an analysis by the Brookings Institution, exports account for 8 percent of
total U.S. employment ; smart investments in infrastructure have the potential to create
more jobs in export-oriented U.S. companies. The President’s National Export Initiative calls
for the “Departments of Commerce and Transportation [to enter] into a Memorandum of
Understanding to work together and with stakeholders to develop and implement a
comprehensive, competitiveness-focused national freight policy. The resulting policy will foster
end-to-end U.S. freight infrastructure improvements that facilitate the movement of goods for
export and domestic use.” Moreover, the Department of Transportation “estimates that
population growth, economic development, and trade will almost double the demand for rail
freight transportation by 2035.” Export growth has been strong during the recovery. In 2011,
exports were up over 33 percent from 2009, meaning that America is ahead of schedule in
meeting the President’s goal of doubling exports over 2009 levels by the end of 2014.
States cp – solves bizcon
Removing infrastructure investment from the political process makes it more
attractive – any infrastructure bank solves business confidence
Stringer 11
[Scott M. Stringer, Manhattan Borough President, “Banking of the Future: A New Paradigm For
Rebuilding Our Nation’s Infrastructure”, Spring 2011,
www.libertycontrol.net/uploads/mbpo/BOTFpaper.pdf]
One promising solution to address these looming infrastructure needs – and to assure a more
prosperous future -- is the establishment of a national, regional or state infrastructure bank.
Infrastructure banks use government dollars in the form of loans, tax credits, insurance, guarantees, bonds or direct
subsidies to leverage much larger sums of private capital to invest in public works. The results are carefully
structured public private partnerships (P3’s) that harness a combination of private lending and public financing to
produce public goods that are national or regional priorities.
The infrastructure bank model offers several key advantages. In particular, it enables a merit-based system of
project selection. Projects are judged based on their ability to do the greatest good for the greatest number of
people, regardless of geographical or political boundaries. A national, regional or state infrastructure bank would
supplement the current system of Congressional funding streams for infrastructure mega-projects, not replace it. But by
insulating certain projects from the ebb and flow of politics, an infrastructure bank could provide a stable
investment environment for the private sector and guard against fluctuations in funding due to political factors.
The decision by New Jersey Governor Chris Christie to cancel the proposed ARC tunnel under the Hudson River – and
forgo more than $3 billion in federal transportation funding – is a recent example of a major infrastructure project that was
undone by a change in administrations.
This approach to infrastructure – using small amounts of government money to leverage substantial sums of
private sector money to achieve important social objectives – has worked successfully internationally for decades.
But the idea has never gained any real traction in the White House – until now.
In a December 4, 2009, memo by the President’s Economic Recovery Advisory Board (PERAB), the Obama
Administration outlined a broad vision for a national infrastructure bank, noting that “the goal of the Bank is not to
displace existing infrastructure spending. It is to help garner additional funding for worthy projects that would not
otherwise be undertaken.”1
States cp – bipart
Bipartisan support for SIB
TS-SI NEWS SERVICE 2011 ( TS-Si Research Service consolidates information from the professional literature and field experience, “
State Infrastructure Banks Get Mixed Marks”, 07 DECEMBER 2011, http://ts-si.org/finance/31200-state-infrastructure-banks-get-mixed-marks)
President Obama has pushed repeatedly — and unsuccessfully — to establish a national infrastructure
bank. That appears unlikely to happen. However, a bipartisan group of three U.S. senators —
Democrats Ron Wyden of Oregon and Mark Begich of Alaska, and Republican John Hoeven of North
Dakota — want to give each state $1 billion in bonding authority to use through existing infrastructure
banks. These so-called “TRIP bonds” (for Transportation and Regional Infrastructure Project) would
reward bondholders with tax credits instead of paying interest. The senators want to include the idea in
a long-stalled rewrite of the federal highway spending bill.
A2 States are broke
Individual States are gaining revenue
The New Mexican, 12, (State Revenues to be Higher than Expected,
http://www.santafenewmexican.com/Local%20News/BC-NM--StateRevenues1stLd-Writethru )
Officials estimate that revenue levels for the state of New Mexico will come in roughly $250 million
higher than expected for the just-completed fiscal year. The Albuquerque Journal reports
(http://bit.ly/O5iKVc) that the stronger-than-expected revenues mean the state likely will end up
taking in nearly $5.8 billion for the fiscal year that ended June 30. That’s an increase of roughly 7
percent — or about $380 million — over the previous year. About $200 million of the $250 million
stems from oil and natural gas taxes and royalties, which tend to fluctuate from year to year.
Individual States are recovering quickly
Boshart, 12 (State auditor sees good and bad in state budget picture,
http://wcfcourier.com/news/local/govt-and-politics/state-auditor-sees-good-and-bad-in-state-budgetpicture/article_f8f512fa-c9de-11e1-b1f0-0019bb2963f4.html)
Gov. Terry Branstad and the split-control Legislature have made “very good progress” in correcting
bad budgeting practices, but they still faces a $161 million “spending gap” compared to available state
revenues and continue to make ill-advised money shifts and use one-time money for ongoing services
that must be eliminated, State Auditor David Vaudt said Monday.
Vaudt issued his assessment of the final fiscal 2013 budget by giving generally positive remarks although
he warned there remain unresolved fiscal challenges and considerable federal uncertainty that could
dog budget-makers for years to come.
On the positive side, Vaudt said the gap between available state revenue and ongoing spending has
been slashed by nearly 80 percent from the $764 million imbalance just two years earlier. He said
growth in state tax collections have averaged 8.8 percent over the past two fiscal years while average
spending has growth by 1.7 percent – enabling the state to fully replenish its reserves and bank
surplus dollars.
Individual States have extra money
Carroll County News, 12, (State has nearly $200 million surplus,
http://www.carrollconews.com/blogs/1362/entry/48509/)
LITTLE ROCK -- Arkansas state government ended its fiscal year with a budget surplus of about $145
million. The governor proposed spending the surplus in three main categories - Medicaid, economic
development and capital projects at colleges and universities. When combined with money left over
from last year's surplus, the state now has about $191 million that has not been budgeted for any
specific purpose.
A2 Fed funding key
States can function without federal funding – Florida, Georgia, Kansas, and
Ohio prove
Slone 11 (Sean Slone is a Health Policy Analyst at Council of State Governments, “State Infrastructure Banks”,
July 5, 2011,
http://knowledgecenter.csg.org/drupal/content/state-infrastructure-banks)
Several states—including Florida, Georgia, Kansas and Ohio—have established state infrastructure
banks or accounts within their banks that are capitalized solely with state funds.7 Virginia has recently
joined the ranks of those four states. Such banks allow funded projects to avoid potentially delaycausing federal regulations and restrictions (such things as labor, environmental and “Buy America”
requirements) they would otherwise be subjected to if they were financed using federal funds.
Private cp – solvency
Privatization infinitely better for transportation, markets solve all their
harms better than government investment ever could
Block 79
[Walter Block, Senior Economist with the Fraser Institute, Senior Faculty member of the Ludwig von
Mises Institute, Professor of Economics at Loyola University New Orleans, “Free Market Transportation:
Denationalizing the Roads”, Summer 1979, mises.org/journals/jls/3_2/3_2_7.pdf]
Applying the concepts of profit and loss to the road industry, we can see why privatization would almost
certainly mean a gain compared to the present nationalized system of road management.
As far as safety is concerned, presently there is no road manager who loses financially if the accident rate on
"his" turnpike increases, or is higher than other comparable avenues of transportation. A civil servant draws
his annual salary regardless of the accident toll piled up under his domain. But if he were a private owner of
the road in question, in competition with numerous other highway companies (as well as other modes of transit
such as airlines, trains, boats, etc.), completely dependent for financial sustenance on the voluntary payments of
satisfied customers, then he would indeed lose out if his road compiled a poor safety record (assuming that
customers desire, and are willing to pay for, safety). He would, then, have every incentive to try to reduce
accidents, whether by technological innovations, better rules of the road, improved methods of selecting out
drunken and other undesirable drivers, etc. If he failed, or did less well than his competition, he eventually would
be removed from his position of responsibility. Just as we now expect better mousetraps from a private
enterprise system which rewards success and penalizes failure, so could we count on a private ownership
setup to improve highway safety. Thus, as a partial answer to the challenge that private ownership would mean the
deaths of millions of people in traffic accidents, we reply, "There are, at present, millions of people who have been
slaughtered on our nation's highways; a changeover to the enterprise system would lead to a precipitous decline
in the death and injury rate, due to the forces of competition."
Another common objection to private roads is the spectre of having to halt every few feet and toss a coin into
a tollbox. This simply would not occur on the market. To see why not, imagine a commercial golf course
operating on a similar procedure: forcing the golfers to wait in line at every hole, or demanding payment every time
they took a swipe at the ball. It is easy to see what would happen to the cretinous management of such an
enterprise: it would very rapidly lose customers and go broke.
If roads were privately owned, the same process would occur. Any road with say, 500 toll booths per mile, would
be avoided like the plague by customers, who would happily patronize a road with fewer obstructions, even at
a higher money cost per mile. This would be a classical case of economies of scale, where it would pay
entrepreneurs to buy the toll collection rights from the millions of holders, in order to rationalize the system into one
in which fewer toll gates blocked the roads. Streets that could be so organized would prosper as thoroughfares;
others would not. So even if the system somehow began in this patchwork manner, market forces would come to
bear, mitigating the extreme inefficiency.
T – financing
NIB engages in financing not investment
Plumer, writer for the Washington Post, 9/19/11
Brad-; “How Obama’s plan for infrastructure bank would work”. The Washington Post.
http://www.washingtonpost.com/business/economy/how-obamas-plan-for-infrastructure-bank-wouldwork/2011/09/19/gIQAfDgUgK_story.html. DS
One of the key aspects of President Obama’s jobs plan is an idea that’s been knocking around
Washington for some time: a national infrastructure bank that would leverage private investment to
fund new roads, bridges, mass transit and other public-works endeavors. Here’s how it would work.
The proposal, modeled after a bipartisan bill in the Senate, would take $10 billion in start-up money
and identify transportation, water or energy projects that lack funding. Eligible projects would need to
be worth at least $100 million and provide “a clear public benefit.” The bank would then work with
private investors to finance the project through cheap long-term loans or loan guarantees, with the
government picking up no more than half the tab — ideally, much less — for any given project. Critics
have deemed the idea risky for taxpayers, and those voices will no doubt get louder after the collapse of
Solyndra, a California-based solar manufacturer that received a $535 millionloan guarantee from the
Energy Department only to go bankrupt in August. Administration officials have, in turn, tried to allay
fears about taxpayer losses by noting that the loans would only go toward projects that have “a
dedicated revenue stream,” such as toll roads, to repay the loans. The bank would be managed by an
independent seven-member board, with no more than four members from either party.
Definition of financing
Farlex Financial Dictionary, 2012
(http://financial-dictionary.thefreedictionary.com/financing)
The process or means of acquiring capital necessary to conduct a business activity. Two of the most
common forms of financing are debt financing and equity financing. In debt financing, one borrows
money, usually from an institution, with the promise to return the money with interest at some point
in the future. This provides capital to the borrower and a profit to the lender. In equity financing, a
company sells portions of ownership to those who are interested. Unlike debt financing, equity financing
usually raises capital without incurring liabilities, but the risk exists that the company will not raise
enough. An alternative to both debt financing and equity financing, especially for start-ups, is using
money from personal savings to pay for activities.
T – financing
The NIB’s focus is to only fund projects—does not actually mandate for
construction
Greene 11
(Brian Greene, Associate Project Mananger at Time Inc., “Is Obama's National
Infrastructure Bank the Answer on Jobs?” October 6, 2011,
http://www.usnews.com/news/articles/2011/10/06/is-obamas-national-infrastructurebank-the-answer-on-jobs)
Rep. Rosa DeLauro of Connecticut, an advocate of a federal infrastructure bank since 1994,
explained, "The United States is one of the only leading nations without a national plan for
public-private partnership for infrastructure projects or a national infrastructure bank to finance
large-scale projects." The proposed bank, modeled after the European Investment Bank, would be
a federally operated bank overseen by a board of directors whose focus would be to fund strategically
important public works projects. State, local, or federal entities seeking funding for infrastructure
programs from roads and railways to telecommunications and energy could come to the bank with
proposals in need of federal assistance.
Investment is not financing
Tracy 06
(John A. Tracy, CPA (Certified Public Accountant) and Professor of Accounting, Emeritus
at the University of Colorado, “Recording Investing and Financing Transactions for a
Business,” 2006, http://www.dummies.com/how-to/content/recording-investing-andfinancing-transactions-for.html)
Though few in number, investing and financing transactions for a business are important and usually involve big chunks of money. The investing
and financing transactions are reported in the statement of cash flows. Suppose a business recorded 10,000 transactions during the year. The
large majority would be sales and expense transactions and the set-up and follow-up transactions for sales and expenses. Perhaps fewer than
100 would be investing and financing transactions.
Investing activities include the purchase and construction of longterm operating assets, such as land, buildings, machines, equipment, vehicles, and so on. In general, these
investments are called capital expenditures. (The term capital refers to the large amounts of money invested in the assets as well as the longterm nature of these investments.) These economic resources are also called fixed assets. They’re not held for sale in the normal course of
business; rather, they’re held for use in the operations of the business. When grouped together in a balance sheet, fixed assets are typically
labeled property, plant, and equipment. Eventually, the business disposes of these assets by trading them in for new assets, selling them off for
residual value, or just having the junk collector come and haul them away
. Investing transactions include acquisitions of
other long-term assets, such as intangible resources (patents, for example), rental real estate, and
research projects in the development stage. For example, a business could invest in a sports
franchise, such as the Oakland Raiders. Financing activities basically fall into three categories: A
business borrows money on the basis of interest-bearing debt and either pays these loans at their
maturity dates or renews them. A business raises capital (usually money) from shareowners and may
return some of the invested capital to them. A business distributes cash to its shareowners based on
its profit performance. These are the three basic kinds of financing activities. Large public
corporations engage in much more complex and sophisticated financing deals and instruments
than these types.