Investing in Our Nation's Infrastructure

“When you don’t invest in infrastructure, you are going to pay sooner or later…”[1]

All Americans should support restricting the spending of Social Security surplus to efforts that help strengthen the program’s long term solvency.

Both Bill Clinton and Al Gore advocated placing Social Security surplus funds in a “lock box.”

State and local elected officials as well as engineers and construction contractors should immediately begin advocating that a reasonable percentage of Social Security surplus funds be invested in state and municipal infrastructure (drinking water, wastewater and drainage) bonds. State and Municipal bonds are generally a very safe and prudent investment.

In 2005, the American Society of Civil Engineers reported that states and cities needed approximately $32 billion a year in additional funding to meet all of their drinking water, wastewater and nonfederal dams infrastructure needs for the next twelve to twenty years (2005-2017/2025). That’s a total of $384 to $640 billion.[2]

During the next ten years, the Social Security surplus is projected to be approximately $1 trillion.
Investing Social Security surplus funds in state and municipal bonds would help maintain, rebuild and expand our nation’s infrastructure while generating regular interest payments to the Social Security Trust Fund to help strengthen its long term solvency. It would also help create jobs, stimulate the economy and free up private sector capital that would have been spent on state and municipal bonds to be invested in corporate bonds and equities and T-Bills. Increased investments in the private sector would also help strengthen and grow the economy.

Economists estimate that 40,000 jobs are created for every $1 billion spent on transportation construction projects. The rate for non-transportation infrastructure projects is probably also somewhere in that “neighborhood”. Assuming 30,000 jobs for each billion spent on infrastructure projects, investing $100 billion a year during each of the next ten years in additional state and municipal infrastructure funding should result in the creation and maintenance of at least one hundred thousand jobs across America.

Allowing Social Security surplus funds to be invested in state and municipal bonds would be good for the Social Security Trust Fund, our nation’s long term economic strength and growth, and maintaining, rebuilding and expanding our nation’s infrastructure.

This is a win-win idea.
[1] Jim Drinkard, Senate passes $10.5 billion aid package, USA TODAY, September 2, 2005, pg. 6A (quoting Mike Parker, former Assistant Secretary of the Army for civil works and a former Mississippi Congressman).
[2] American Society of Civil Engineers (ASCE) 2005 Report Card for America’s Infrastructure, www.asce.org.