Rebuild and Stabilize America’s Infrastructure & Labor Markets:
The Changing Labor dynamics.
Many decades ago, it was not uncommon for employees to work for the same company for 20 – 30 years. Nowadays that is not the case as workers change jobs as frequent as 2-5 years. Moreover, as years have gone by, the labor markets have undergone some major fundamental transformations due to outsourcing and technology and the income of homeowners is more challenged to meet their previously committed debt obligations. Taking on debts that outlast the reasonable term of employment is not a prudent practice since the debt would likely outlast the income. Lastly, consumers have become far too abusive towards debt and this is stressing the entire system.
Under a deteriorating labor market, not only is a citizen’s ability to repay debts being severely compromised, but resultantly, banks are no longer willing or able to lend; not even to qualified buyers under normal circumstances. Lastly, under these conditions, buyers are less likely to commit to purchase a home out of concern that prices will decline further, or due to uncertainty surrounding employment.
Currently, most major cities in the U.S. have ambitious goals requiring repair and improved maintenance of their infrastructure. Simultaneously, they are also facing a deteriorating social economic climate with a swelling demand for assistance from its citizens. Capping this, our Federal Government has recently been pressured to rescue many large institutions from past indiscretions leaving the fiscal stability of the broader economy in serious doubt. Despite the glumness of the present situation, America has a unique opportunity to resolve all of these problems with a well orchestrated fiscal and legislative policy.
By now it is no secret the new Administration is committed to stimulating the economy by spending several hundred billion dollars on infrastructure type projects. But perhaps the size of the stimulus will be less relevant than the focus and direction of the stimulus. If the bulk of this capital is directed towards “human capital”, the incomes created out of this could then be redirect towards resolving the mortgage and credit crisis by passing legislation allowing working citizens to establish Individual Mortgage Accounts (IMA’S); which will be outlined in greater detail in section C of this plan.
The key here is that the capital must be directed towards human capital and let private industry assume the responsibility of investing into the basic materials, technology and other services.
