A key difference between China and the US is that the Chinese government owns the majority of its banks. Like private banks, state-owned banks simply create money as credit on their books. The difference is that they return their profits to the government (instead of Wall Street), making the loans interest-free. The US government could do this too, without raising taxes, slashing services, cutting pensions, or privatizing industries.
May 15th-19th has been designated “National Infrastructure Week” by the US Chambers of Commerce, the American Society of Civil Engineers (ASCE), and over 150 affiliates. Their message: “It’s time to rebuild.” Ever since ASCE began issuing its “National Infrastructure Report Card” in 1998, the nation has gotten a dismal grade of D or D+. In the meantime, the estimated cost of fixing its infrastructure has gone up from $1.3 trillion to $4.6 trillion.
While American politicians debate endlessly over how to finance the needed fixes and which ones to implement, the Chinese have managed to fund massive infrastructure projects all across their country, including 12,000 miles of high-speed rail built just in the last decade. How have they done it, and why can’t we?
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