We’re in a depression. I don’t give a hang what government statistics say.
When kids coming out of college can’t find jobs, it’s a depression. When millions of people lose their homes in foreclosures, it’s a depression.
So how do we restore strong economic growth to create good paying jobs and rising living standards?
Public spending cuts? The cuts are just starting and many more on the way. But you can’t cut your way to prosperity – just the opposite. Look at Ireland and Greece.
The only way to create long term economic growth and rising living standards is to build the physical, social and technological infrastructure that lays the foundation for prosperity. That’s how we did it in the past. That’s how we’ll do it in the future.
Here are some examples of important physical infrastructure projects that built American prosperity:
The National Road (1802)
During the Presidency of Democrat Thomas Jefferson, Congress authorized the construction of a road through the Appalachian Mountains from Cumberland, Maryland to be funded from the sales on public lands. It was critical to opening the west.
Erie Canal (1817)
The Erie Canal, a public works project of New York State, connected the Hudson River to the Great Lakes and the growing markets of the American West. It made New York the Empire State and New York City the country’s premier port. The effort was led by a Democrat – Governor DeWitt Clinton.
Transcontinental Railroad (1862)
Funded by both government and private investors, the transcontinental railroad was a tremendous spur to commerce, manufacturing and agriculture. It was initiated under Republican President Abraham Lincoln.
Created under Republican President Dwight Eisenhower, the interstate highway system has been called the greatest public works project in history. It was built by states with funds provided by the federal government.
Social infrastructure efforts were important too:
Land Grant College Act (1862)
Created a system of public state universities to provide low cost college education in the agriculture and mechanical arts. It was financed by the sale of public land.
Homestead Act (1862)
To encourage settlement of the west and promote economically self-sufficient households, the U.S. government gave families 160 acres of public land each. It became theirs for a fee of only $10 if they worked it for 5 years.
GI Bill (post World War II)
Greatly expanded educational opportunities for returning veterans.
Not forgetting our government’s technological infrastructure initiatives:
Established to promote new scientific farming techniques and collect important data, the new agency helped modernize American agriculture.
National Academy of Sciences (1863)
Created by Congress to “investigate, examine, experiment, and report upon any subject of science or art” whenever called upon to do so by any department of the government. Its roots go back to the American Philosophical Society founded by Benjamin Franklin in 1743.
NASA, a civilian agency, was established under President Eisenhower to explore space. In 1961 Democratic President John F. Kennedy called for sending an American to the moon before the end of the decade. The goal was achieved.
The tradition of government promotion of national infrastructure goes back to the earliest days of the American Republic. In 1791, Alexander Hamilton, our first Secretary of the Treasury, published his Report on Manufactures in which he called for the federal government to play an important role in developing the American economy. In 1808, Treasury Secretary Albert Gallatin presented to the Senate his Report on Roads and Canals in which he formulated a coherent plan of national improvements.
Government support for infrastructure has not been a partisan or ideological matter. Hamilton was a conservative, a member of the Federalist Party, ancestor to the Republican Party. On the other hand, Albert Gallatin served President Thomas Jefferson, whose party became the modern Democrats.
The all time greatest advocate of American improvements was none other than our first Republican president Abraham Lincoln. Lincoln was inspired by his hero, Whig Party leader Henry Clay, founder of the American System, who called for a thorough national economic policy to promote growth and by pro-growth American economist Henry Carey.
So the history is clear. Government led building of physical, social and technological infrastructure is crucial to promote a strong American economy and rising living standards. To begin the process of economic revival, we the people should begin a public conversation to reach a consensus as to what projects will best contribute to our future prosperity.
Once we’ve decided what needs to be done, we’ll figure out how to do it. We’re Americans.
Suggested further reading:
The Greatest Nation on Earth: Republican Economic Policies during the Civil War, Richardson, Heather Cox, Harvard University Press (1997)
Government Promotion of American Canals and Railroads 1800-1890, Goodrich, Carter, Columbia University Press (1960)