A nation cannot support a strong military, if it is weakening economically. To combat the economic downturn in the U.S., government response focused primarily on bailouts with some money going to stimulus spending. Of the over $3 trillion expended (with trillions more committed) [Goldman, D., CNN.com, Bailout tracker,] the money has primarily gone to bailouts of investment and commercial banks, Fannie and Freddie federal mortgage underwriters, AIG insurance group, and state government programs.
When making massive federal investments, we need to take a page from Great Depression recovery programs and emphasize capital formation, more commonly referred to as development of infrastructure. That way our country gets a lasting benefit from the monies spent. When the federal omnibus transportation reauthorization is marked up, representatives and senators should be thinking about a sea change in how we spend transportation money. Investment in constructing the Steel Interstate System will stimulate the economy now and bring lasting economic benefits for generations.
The Steel Interstate System is sustainable public investment. A modeling study by the Millennium Institute [Drake, A., Bassai, A., Tennyson, E.L., Herren, H.R., Evaluating the Creation of a Parallel Non-Oil Transportation System in an Oil-Constrained Future, Millennium Institute, January, 2009.] shows that a renewed national rail system similar to Steel Interstate System would help achieve numerous national goals for oil-free transportation and greenhouse gas abatement. While many actions to reduce greenhouse gases are an economic drag, building the Steel Interstate to move freight would act as a seedbed for broad national economic growth. Not even accounting for benefits from inter-city passenger rail service, a federal investment of:
$250-500 billion in inter-city railroad lines Non-Oil Transportation could supplant most inter-city truck freight and unspecified modal share of passenger service. Up to $60 billion/year ($1.2 trillion over 20 years), spent cost effectively on Urban Rail, should allow for 28% annual growth (not compounded) in urban passenger-miles on Non-Oil Transportation.
These two investments create an 11% larger GDP…and a 26% reduction in oil consumption already in 2030 versus a strictly market based reaction. Adding renewable energy [a program of game-changing investments in residential, business, and utility investments in renewable energy] improved the results to GDP +13%, GHG -38% and oil consumption -22%.[Ibid, Abstract, p. 1.] Editors note: Oil consumption increases in this last scenario to account for constructing the renewable power network.]
The Steel Interstate System is the only national infrastructure program that can help pay for itself. The Steel Interstate repays its own investment costs by:
- significantly reducing national expenditures on foreign oil
- improving the balance of payments,
- increasing freight movement productivity, and
- stimulating the economy more effectively than equivalent investments necessary to maintaining the current petroleum/highway-based freight economy. [embedded link to Economic Dividends topic]
Though federal investment in loan guarantees is required as a catalyst to begin the commitment, private capital will flock to the opportunity as the network expands and a greater and greater percent of the nation’s freight moves on the electrified Steel Interstate, the savings likewise grow. And they continue year after year. With less than a 1% increase in electric generation, we can displace 12% of total U.S. oil consumption.[Drake, A., Multiple Birds – One Silver BB: A synergistic set of solutions to multiple issues focused on Electrified Railroads, The Oil Drum, 7-15-08.] [embedded link to Oil-Free Transportation-location]
An economically strong nation is a secure nation. If we can reduce reliance on foreign oil and substitute domestic electric generation, we can keep billions of dollars here in America year after year, generating jobs and economic growth and enhancing economic competitiveness.