The Broader Market

The following is a great article calling on the Obama administration to be bold in its job creation agenda. Enjoy.

by Michael Ettlinger, Donna Cooper, Sarah Rosen Wartell, and Bracken Hendricks

When President Barack Obama announces his jobs plan in September, it should be a plan that matches the scale of the problem. With millions unemployed and job creation sluggish, this is not the time to be timid.

In particular, the president needs to offer much more than proposals that conservatives in Congress might support—tax cuts that wouldn’t be nearly as effective as the alternatives. The president’s proposals also will have to go well beyond simply extending provisions such as payroll tax cuts that are set to expire. With millions of unemployed Americans, the plan needs to be one that will improve the economy, not just tread water. And the plan needs to create jobs fast, not just lay the groundwork for jobs in the future.

In short, the plan should be a sharp contrast to the economically nonsensical agenda his political opposition is passionately arguing for. The idea that simply slashing government programs and taxes is the key to economic success is a tried and failed strategy. The tax system we have now is a tax system inherited from President George W. Bush. We’ve seen the results. Economists across the political spectrum agree that spending cuts in a weak economy run counter to everything we know about getting a country out of an economic hole. President Obama should not meet halfway those who only offer economic incoherence. He should take them head on.

For the rest of the article, see here.

by Donna Cooper and Jordan Eizenga

The Environmental Protection Agency estimates that over the next 20 years, more than $600 billion in water system infrastructure improvements will be necessary. Much of the cost of these improvements will be borne by consumers. But state drinking and clean water revolving loan funds do subsidize a portion of the project costs by offering low-interest loans to water authorities and water companies for these improvements.

For the rest of this article, see here.

by Donna Cooper and Jordan Eizenga

We will need to invest at least $636 billion over the next two decades to keep our water systems in safe working, according to EPA estimates. That could mean Americans will pay higher water bills in the coming years. But we can curb that increase if clean water and drinking water state revolving funds—the vehicles through which most water infrastructure investment is done—make better use of their existing resources.

For the rest of the article, see here.

by Jordan Eizenga

The new World Trade Center is the latest casualty of a municipal bond market in turmoil. The developer of the office-and-memorial project in lower Manhattan this month postponed issuance of $900 million in tax-exempt bonds, because of rising yields.

Liberty Development Corp.’s problems are emblematic of widespread distress in the municipal markets: Default worries, near-elimination of municipal bond insurance, and tight credit conditions have led to higher interest rates and delays of important infrastructure projects that create jobs.

by Jordan Eizenga and Seth Hanlon

In the months after the collapse of Lehman Brothers in September 2008, fear and uncertainty in the global credit markets spread to the municipal bond market. Investors fled muni bonds and prices plunged.

Advisers recommended that state and local governments delay issuing new debt because of high yields and weak demand. But pressing financial and infrastructure needs meant that state and local governments often could not just wait out the crisis. The turmoil in the municipal bond market threatened to worsen the nation’s plunge into recession.