A recent report showed unexpectedly slow job growth over the summer, raising the odds of a stall in the already sluggish U.S. economic recovery. While this in itself is disappointing, the even greater disappointment is the failure to do anything about it, particularly when there’s an obvious and costless solution: borrow hundreds of billions of dollars for essentially nothing and spend it on our nation’s crumbling infrastructure. Doing so would boost gross domestic product (GDP) by far more than it costs and create hundreds of thousands of jobs.

While interest rates remain near zero would be a great time to invest in United States infrastructure. The cost of tax payers would in fact be very low and the return on investment of infrastructure upgrade would more than pay for costs. And, as Fortune says, such an effort would create hundreds of thousands of new jobs!

An Ounce of Prevention

The old saying is that an ounce of prevention is worth a pound of cure. Fortune says that there are more than 240,000 water main breaks in the US every year. US rail congestion costs US farmers up to half a billion a year due to rail delays. With the average age of US bridges and roads around 45 years it is time for an upgrade across the board. CBS News reports on the storms and floods in South Carolina and asks if the US is ready for more extreme weather as its infrastructure crumbles.

The “thousand year” flooding and dam failures in South Carolina highlight a growing concern: Is America’s infrastructure – such as bridges, dams, highways, and levees – designed to withstand what many scientists predict will be a greater frequency of increasingly powerful storms?

With infrastructure essentially a tax free investment (for taxpayers) it is time to invest in United State infrastructure.

Where Are the Profits for Investors?

When the US congress finally wakes up and addresses this issue, where are the profits for investors? A basic necessity is drinking water. America Blog thinks that as water infrastructure crumbles water privatization is likely.

For many years there has been an organized effort by private actors to move America’s water systems towards privatization.
Some of the biggest players advocating for water privatization in the U.S. are corporate advocacy groups.

Other cheerleaders for the initiative include the poster-boys for the 1%, the billionaire Koch Brothers – who, in 1980, called for “the privatization of the inland waterways, and of the distribution system that brings water to industry, agriculture and households,” along with practically every other major infrastructural element of American society.

Over the years, a plurality of Koch-related organizations have pushed water privatization as part of a wider agenda of supposedly “libertarian” policies.

Although there are many concerns about privatizing water supplies it may be the way of the future if there is no government resolve for a wide ranging tax free investment in United States infrastructure. This may be the investor’s way to profit from government ineptness.

Tax Free Investment: United States Infrastructure PPT

A favorite tax free investment is in municipal bonds. Municipal bonds are used by state or local government to build bridges, roads, or other public projects. Because the federal government does not tax these, they are a tax free investment and protected from the expected tax increases needed to cover the budget deficit.

You can buy individual bonds, typically in $1,000 increments or you can invest in bond funds. If you choose municipal bonds in your state of residence the bonds are usually a tax free investment at the state level too. Thus investing in individual bonds may provide more tax free investment advantage than a bond fund. The advantage of a bond fund is that you can invest any amount of money, not in increments of $1,000 or more.

A lot of stimulus money is going into infrastructure in the USA. The federal government can issue treasury notes to raise money, or print money. Municipalities need to issue bonds.

The rap against bonds has always been the relatively low yield. This complaint is made when the market is going up. This complaint goes away when the market collapses. Typically those in high income brackets have looked for tax free investments such as tax free bonds as the secure end of a basket of investments. Obviously those in higher income brackets benefit more from a tax free investment. As the specter of everyone paying higher taxes approaches more folks should be looking for tax free investments.

As the health insurance (or lack of it) issue becomes more pressing there will eventually be some sort of government health insurance guarantee or nationalization of health care. There will be more government offices, employees, and expense, not to mention health care delivered that is not being delivered today when so many people lack health insurance and the cash to cover medical expenses.

Besides the health insurance issue the huge amount of money that has been needed to stimulate the economy and avoid a depression will need to be paid back and when the economy is more stable we will likely see the argument being made that the patriotic thing to do is pay more taxes to help bring down the dangerous budget deficit. As usual the issue will likely be addressed obliquely because the American electorate does not like to hear Pogo’s famous proclamation that “We have met the enemy and he is us.” Whether the USA comes to grips with its economic slide or needs to be fooled into compliance they will be paying higher taxes. Those with the foresight will be looking now for tax free investments.