Obama sinkhole recipe: Hey, let’s create a new, government-run infrastructure bank!
It’s actually not a “new” idea. It’s an old, recycled one borrowed from corruptocrat Democrat Sen. Chris Dodd, who sponsored a bill to create a federally-operated “infrastructure bank” in 2007. President Obama tried to get $5 billion in funding for one in his 2010 budget and $4 billion is proposed for one in his 2011 budget. Democrat Rep. Rosa De Lauro is pushing a House version — and her expansive, pipe-dream plans tell you all you need to know about what a disastrous, costly slush fund this thing would inevitably grow into:
Ms. DeLauro’s plan would create an infrastructure bank that would be part of the United States Treasury, where it would attract money from institutional investors, then channel the funds to projects selected by a panel. The program, which would make loans much like the World Bank, would finance projects with the potential to transform whole regions, or even the national economy, the way the interstate highway system and the first transcontinental railway once did.
The outside investors would expect a competitive return on their money, so many of the completed projects would have to charge fees, taxes or tolls. In an interview, Ms. DeLauro said she would be “looking at a broader base,” meaning the bank would finance not just roads and rails, but also telecommunications, water, drainage, green energy and other large-scale works.
But if the projects did not raise enough money, the Treasury might get stuck paying back the investors, a prospect that gave pause to so-called deficit hawks like Mr. Tiberi. In an e-mail last week, he said he agreed the nation’s road and communications networks needed to be improved but was concerned about creating another company like Fannie Mae that might need a bailout.
Inside the White House, the idea for a transportation initiative, and in particular an infrastructure bank, is one that the White House chief of staff, Rahm Emanuel, has been promoting.
(Fun fact reminder: Rahm lived rent-free for five years in the D.C. basement of De Lauro and her Democratic pollster hubby Stanley Greenberg. But I digress.)
So, like Stimulus I, which was initially intended to put infrastructure spending first, but evolved into a multi-purpose slush fund that put infrastructure last, the “infrastructure bank” envisioned by progressives on Capitol Hill would be “looking at a broader base” to finance “green energy” and “other large-scale works” based on “social benefits” determined by a panel appointed by the president.
Moreover, this “bank” would be anything but a bank in the normal sense of the word. Ron Utt at Heritage exposed the farce in March:
This bank would be capitalized by federal appropriations to leverage a greater volume of debt borrowed under the full faith and credit of the federal government. In turn the bank would use these funds to finance eligible infrastructure projects. While these proposed entities—and similar ones that exist in the states from earlier legislation—are described as “banks,” they are no such thing.
The common meaning of a “bank” describes an entity that borrows money at one interest rate and lends it out to creditworthy borrowers at a somewhat higher interest rate to cover the borrowing, administrative, and bad debt costs incurred in the act of financial intermediation. In contrast, many of the federal infrastructure bank proposals (and those already in existence) follow only the borrowing part. Instead most allow the infrastructure bank to use borrowed funds to provide grants and subsidies to approved infrastructure projects. A grant, of course, is not paid back and does not require interest payments. So this raises an important question: How can the bank service its debt if it has no earnings?
Alert readers will recognize that this sounds alarmingly similar to the predicament of the federally sponsored lenders Fannie Mae and Freddie Mac when their earnings failed to cover debt costs, thereby necessitating a taxpayer bailout that now totals $126 billion.[1] Oddly, such apparent parallels were acknowledged by Representative Rosa DeLauro (D–CT), sponsor of current infrastructure bank legislation, when she noted that her bank would be “an innovative public-private partnership like Fannie Mae.”
“Innovative” = another massive taxpayer sinkhole. Heaven help us.
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More on the elastic “economic development” projects that will undoubtedly be funded under the guise of infrastructure spending, via Kevin Williamson at NRO. (h/t commenter Netfest)
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This $50 Billion is yet another backdoor way to fund state union employees. By funding “infrastructure,” cash-strapped states can divert their contributions to state roads into other programs (and their union employees) that face the axe. Read: http://www.nationalreview.com/exchequer/245745/another-stimulus-another-bailout
Freddie Mac. Fannie Mae. Social inSecurity. The Post Office.
When will the Government finally figure out it can’t run businesses!?!? It can only provide laws to run society, and it often screws that up!
There’s no end to the amount of fun one can have with someone else’s money.
I’ll go ahead and assume this is just the cost of the “bank”. I am really leaning towards it being a fact though.
… which should come out some time in – say – 2014?
Old plan is the same as the old plan, same as the old plan, clik, clik, clikity clik …
You know what they call insanity, doing the same thing over and over and over again.
Who’s calling who a dog?
Here we go again…
This is further proof that progressives have no concept of how a dollar is earned, only on how it is spent.
Anyone want to bet that Jamie Gorelick becomes one of the first officers of this “bank”?
Watch out for any clauses that would require all work to be performed by union only workers. There has to be a payoff to the unions for their huge bribes to the democrat party.
At a parade yesterday, the teachers union were about the only ones walking the pareade route with Joe Donnelly. the Republican candidate Walorski had two or three times as many people parading for her and very more vocally, i might add.
What is it with these people and infrastructure. Do they really believe that many people work in the construction industry?
[for immediate release]
Washington, D.C.
The Federal Infrastructure Investment Bank Central Committee has announced it’s project list for the next five year plan in President for Life Barack Obama’s “Great Leap Forward”. The projects include high speed rail for the East Coast, Miami to New York City, and expansion of the high speed rail line between Southern California and Las Vegas. Once preliminary surveys are completed, construction of the upgraded rail system will be scheduled using patriot labor from Economic Re-Education camps five and twenty six.
This Great Leap Forward will eventually connect high speed rail lines between East and West Coasts with a projected completion date in 2055 to coincide with Dear Leader’s 45 year of service to our Great National Experience.
At the same time Obama is proposing that businesses can write off 100% of their invest in growth…only problem is that companies know that if they grow they will end up paying more in new taxes in the long run.
When will democrats get it, companies dont just decide to invest because of a tax break up front, they look at the big picture and see if growth is a viable option. They are not going to hire new people to stand around and do nothing just to get a tax break.
They have got to keep their new base happy….illegal immigrants.
The Treasury/Fed (let’s face it, they are one entity these days) is now the world’s biggest sovereign wealth fund. Let’s make it even bigger. Globalism run amok.
Washington DC – September 7th, 2010
Funnie Mo is the 3rd Federal Sanctified Financial Emitters (FSFE) to join the Freddie Mac and Fannie Mae family. Funnie Mo was developed with the assistance of highly trusted Nigerian and Kenya financial advisers and philanthropist and extensive email negotiations.
Many are eager for the next email to see what the future steps will be in our economic recovery. The US Treasury bank routing and account numbers have been given to these advisers already. “The ball is in their court now” Obama proudly boasted, “We were indeed who we were waiting for”.
Despite the odd sounding name we have been assured by these same highly ranking unnamed sources that this is indeed a serious undertaking and they have confirmed what many had already suspected —
“We have all your money — all you have is Funnie Mo”.
Any Questions? — Were you wrong? — Yes we Did.
BTW, this has zero chance of being approved in Congress this year and will get bogged down if introduced next year. It’s just Obama setting up another situation to make it appear that the GOP is the only thing standing in the way of progress. The Dems could pass it all by themselves if they had the will but I doubt it would pass even if only Dems were allowed to vote. A few of them would like to get re-elected and this won’t help.
Has there ever been an accounting of the stimulus money that never got spent? WHERE IS IT? In Obama’s retirement fund perhaps?
How can they borrow more when they supposedly have money they haven’t even spent yet?
Is there no way to stop this? (I know, I keep asking the same question)
They are using the “programs” to further their agenda.
This is like a criminal knocking on your door telling you that you must purchase from him several ladders and install them below each window so he can have easier access to your home.
Just another means to create a permanent “Crony Slush Fund.”
Crime Inc.
Obama is realizing what three equal branches of government means.
He is shocked SHOCKED! that the President doesn’t just have money to do what he wants to do. How did Bush do so much without having money to spend? How did he do it?
Obama HATES that Congress controls the purse strings. How dare they not allow him to spend money?! The president should have access to every penny that anyone in America makes.
This will be the way around Congress. Hey we have this money here, lets spend it.
If deficits don’t matter, why do they still demand that we pay taxes? Why don’t they just run bigger deficits without taking our taxes?
Our government is clueless. Obama doesn’t have any idea what he is doing. He’s only good at getting elected ‘hope’, ‘change’ sounds good, but it’s not good governance.
Fearless Leader was overheard to say
“Hey, its not your money, we have government printing presses that make the money” Hey Zippy, if any of your minions are scanning the blogs this morning hows about this, what was the 800+ Billion Dollar Stim package with all those shovel ready jobs just waiting to take off all about and where did they go? Hell where did the money go? How do you propose to fund 50 Billion more?
It would put the US on the fast path to becoming a third world nation.
I suspect Barry’s next major economic initiative will be to get all congresspeople to stand out on street corners in their home districts and ask passersby for “two tens for a five”. A program that Charlie Rangel seems extremely well qualified for.
Parts of Kahleefornia are already there – the trend model for the rest of the nation.
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HI PASADENA PHIL–#16. I think a little differently on what the socialist / marxist / RINO’s will do in Congress. I’m kind of handicapped by experience!
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The vulnerable ones will not vote for more of these economy busting C**P SANDWICHES BEFORE the Nov. 2 2010 election. They fear losing their jobs, and hope the voters are too stupid to judge them by their previous votes and support of the Comrade Obama (PBUH), SanFranNan, and Dingy Harry Reid agenda.
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But–with RINO help–they will have nothing to lose after the election. If they won, they are golden for another 2 or 6 years of “representing” us. And if they lost–why not do a Kamikazi Jihadi attack? They can cut deals with The Messiah for cushy Gubmint jobs and Ambassadorships.
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Remember how health “care” was rammed through on Christmas Eve in the wee hours. I think I hear a choo–choo warming up–it will come down the tracks in late winter. January 2011 is the end of the line for the libs–not Nov. 2, 2010.
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John Bibb
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Another sterling example of fascist economics in the Obamabanana Republic.
Guess what the most important criteria for getting a loan would be…???
Federal Infrastucture Bank = Yet another Democrat Party Slush Fund..a fund to directly Launder Tax Payer money to go directly to those who will in turn, donate heavily to Communist Party errrr I mean Democrat Party Election Campaigns.
and finance the reintroduction of the Edsel, wooden wheels and saddle making. Yes indeed they have plans to “ transform whole regions, or even the national economy” that is for sure. Their heroes Lenin, Stalin, Mao and Castro sure did.
I fear it will take more than election to stop these elitist thugs-we’ll see. With “Reach” McCain returning to the Senate we will see sellouts galore.
===
Let your sidearm be like American Express:
Don’t Leave home without it.
Excellent! Low interest loans for criminals and congresspersons.
Jarrett: “I’d like the ‘Slum-Lord’ special please.”
Banker: “Certainly, but you have to sign this pledge not to use the money on any real estate that has an actual value.”
Jarrett: “Ha-ha, don’t worry, no one in their right mind would live in any of my crack-house palaces.”
Banker: “Well ok then, here’s a couple of billion more or less, and don’t bother paying it back. And this month’s special includes a new Chevy Volt.”
“Innovative” = Liberals rending the Constitution like so much toilet paper.
OT:
Can I just say: Aaaaaaaaaargh!!!
The net effect is not a COST!!!
Off topic: Muslim prayer will start council meetings in Hartford City…
What a nice cheery little idea.
Another slush fund with said funding handed out by some panel…likely dominated by socialists.
I can see it now. The panel “works” with left leaning cities/states where their taxes have been raided to fund other socialist ideas, to give them funding for projects for which taxes have already been levied.
Meanwhile, those red states/cities that are taxed along side the lefty cities/states get choked off.
They became enamored with it during the Bush/Clinton campaign. It was the typical buzzword propagated by the leftist media, and repeated ad naseum by lefty zombies everywhere.
Most had no clue what it meant, but they repeated it anyway, and promptly forgot about it as soon as Clenus won the election.
You forgot the high speed rail from Mexico City to Phoenix, with a planned spur to Denver added later, with branch lines to Seattle and Chicago added at the discretion of ACORN.