BUILD ILLINOIS NOW
State Guarantee Municipal Bonds Infrastructure Stimulus
The State of Illinois could guarantee municipal bonds to accelerate public works construction. This would encourage local governments to build needed roads, sewer & water, curbs and sidewalks, schools, and other important infrastructure this year when we need the stimulus and the jobs. Put Illinois back to work. Build Illinois now!
Contractor prices are low. They need work, and we need infrastructure improvements. This would be a great way to stimulate our economy, and put our workers back to work building our communities.
Most local governments have a backlog of needed public infrastructure improvements. With support and encouragement from the State government, we could have major local programs underway soon. This should be a very simple and low cost way to stimulate substantial public works expenditures this year, and put Illinois workers back to work.
As the recession deepens, corporations cut back on spending and jobs. This is the correct course of action for them - they have to stay solvent to survive.
At the same time, the Federal Government increases spending in order to slow the recession. Widely accepted Keynesian economics advocates substantial increases spending during recession to stimulate the economy. Government acts in an anti cyclical fashion to get the economy growing again. And our Federal Government is spending.
State and local governments, however, often act like private corporations. They, unlike the Federal government, cannot print money. But for many reasons, this is the wrong course of action. Local governments can borrow money at relatively cheap tax exempt rates, and build needed public improvements such as improved roads, schools, and sewer and water systems.
The State of Illinois should support and encourage local and State government spending. They could do this by guaranteeing bonds, and using the bully pulpit of the Governor to advocate for an aggressive program of local and State government public works expansion efforts.
Strong local governments with AA and better bond ratings have no trouble borrowing money now. But weaker rated governments do have trouble getting good rates. Insurance is hard to get for local governments that don't have top credit ratings.
A State guarantee would ensure good rates for all Illinois municipal borrowers. This would be a strong incentive for local governments to borrow and construct needed improvements now.
This stimulus effort by all levels of government is a safe and effective way to get Illinois back to work. Local governments are good at building local public works projects that are needed and worthwhile. They usually do a good job at cost containment. And they seldom default, so the risk to the State government is quite low.
Build America Now
Contact Craig Hullinger at
309 634 5557
for more information or comment