Prosperity through Nation Building

Some of the issues facing modern American society include:

• The impending bankruptcy of Social Security, Medicare and Welfare
• The loss of jobs and the export of productive capacity to underdeveloped nations due to the incentives of Free Trade and Reverse Tariffs
• A dependence on foreign oil that threatens national security
• Terrorism, pollution, world poverty, and war
• A world financial crisis of unprecedented proportion precipitated by the Subprime Mortgage Crisis

America faces many economic and social problems that cannot be solved by the current legislative strategy of redistributing wealth (e.g. from workers to unemployed, from well to sick, and from rich to poor). To solve the problems of the poor, aged, unemployed, and infirm requires an increased productive output from the entire economy. The $500 billion/yr. negative balance of trade indicates that America is consuming more than it produces. We have shipped our manufacturing plants overseas to produce cheap products to consume at home. As a result, our current economy is experiencing the initial symptoms of becoming a poor debtor nation.

To reverse this trend, America must be put back to work producing goods and services (value) for the rest of the world in repayment for our consumption. I believe for America to make the changes and investments required will require a national change of mind and heart. To achieve real prosperity, we must, 1) give to the poor, teach them the Gospel, help them to become productive, and expect eventual repayment for our investment. 2) We must release our dependence on coal, oil and gas in favor of the clean renewable technologies of wind, solar, biomass, and hydrogen.  3) as a nation we must return to God and follow His Way again.

America has become dependent upon foreign oil for 50% of our needs. Transportation uses almost all of our oil consumption. Thus, by reducing our demand for gasoline, we can remove ourselves from our bondage to foreign oil. Cost competitive methanol is now available by biomass fermentation (e.g. corn, sorghum, and any other plant matter). By passing legislation to require all new autos be "flex-car" ready, and able to use 15%-85% methanol to gasoline mixture, we would in a few years be independent of our need for foreign oil.

As a nation we should first establish ourselves as a leader in alternative energy development, manufacture, and installation. Our energy grid is strained, and the Enron debacle has raised the price of electrical power. Any expansion of electrical power generation facilities should be alternative energy sources (e.g. wind, solar, biomass, hydrogen).

The Southwestern United States has been going through a drought for several years. The Colorado River has slowed to a small percentage of its former rate, and the Midwest aquifers are being depleted by the huge draws for agriculture and industry. The water shortage in dry areas could be solved by desalinization and pumping water from the Atlantic, Gulf of Mexico and Baja, or the Pacific. Desalinization combined with alternative energy would provide the foundation for industry, agriculture, and nation building. The market will determine if such a proposal is economical.

By eventually raising the world's productivity, we will eventually improve our own economy.  This concept is dependent upon investing in worthy nations, establishing a productive infrastructure and a righteous legal system.  By producing the goods and services needed to establish the infrastructure of an entire National Economy, we as a nation can become fully employed and prosperous. Full employment depends on producing products that people will buy. The poor countries of the world want an infrastructure, but they can’t afford to pay for it. In general, the poor countries have few natural resources, are poorly educated, and have little infrastructure to support foreign investment.

I believe "Infrastructure Export" will be the next big economic/market "Killer App" (to use a computer metaphor – a technology that everyone will want to buy and sell because it is so valuable). Once America successfully brings a nation from poverty to economic viability, and does it as a profitable market investment, the world will follow our lead. In order to bring our own nation out of its economic/jobless doldrums, I propose that we manufacture all the required elements to establish a nation’s infrastructure with American labor, and export the Infrastructure Modules to a Host Nation.

I propose that we finance the Infrastructure Building Program through various financial institutions – a partnership of governmental and private financial instruments. Since employment will be high, and a significant percentage of the national production will be unavailable for consumption, inflation may begin. A combination of saving and modest consumption should prevent an inflationary spiral. We must realize that this time of production, export, and saving is closely akin to a war economy since our domestic production will be unavailable for public consumption. Delayed gratification of consumption is the appropriate action when one's income is low.

In general, industry does not have enough capital or borrowing power to establish a nation’s infrastructure by itself. As a result, private industry usually invests in a manufacturing facility in countries that already have an infrastructure in place to support their manufacturing. On the other hand, the borrowing power of government has already proven successful in past nation building efforts. After WWII, the United States instituted the Marshall Plan and began a rapid re-establishment of infrastructures in Japan, France, and Germany. Thus, we can use the Marshall Plan as a rough template upon which to model the establishment of a nation’s infrastructure.

The "Host Nation" would contract to receive elements of a national infrastructure (e.g. energy, communication, roads, laws...). As the Host Nation’s economy develops, they will eventually produce an excess of goods and services above their own needs, and after reaching the point of excess productivity, the Host Nation can begin to repay the debt accumulated during the period of infrastructure development.

Coordination of the infrastructure building effort can be done by a governmental agency such as: the proposed "Agency for Nation-Building" which could be formed under the Department of State. This agency would coordinate the tasks associated with industry, finance, and accountability. For example: 1) Corporations will compete for contracts to supply the various pieces of the developing economy. 2) The Agency for Nation-Building will facilitate arranging the investment instruments to fund the contractors. 3) The project will be monitored on many levels and data will be placed online so the world can see how the project is progressing. Substandard work and non-spec products will be exposed to public scrutiny, and consequences will be enforced. We must insure that a quality economic infrastructure is delivered. The future well-being of an entire nation rests on this effort.

Finances are a critical piece in the success of this project. The Agency for Nation-Building will coordinate the issuance of long-term bonds and other instruments through various financial institutions. Payment of interest should be delayed and compounded and disbursement should begin after the economy has sufficiently matured. These "Nation Building Bonds" should provide a very secure long-term return on investment. As such, they may be good vehicles for retirement & Social Security investments.

The American and world economy has off-the-shelf industrial capacity to export all the pieces of a nation-building infrastructure (e.g. energy, communication, transportation...). But, the limited supply of coal, gas, and oil make it impractical and unwise to establish a new economy based on a dying and polluting technology. Thus, to meet the energy generating needs of the Host Country, we must install an adequate manufacturing base to produce the Solar, Wind, and Hydrogen infrastructure. We already have a fledgling Alternative Energy industry doing several billion dollars a year. We could ramp up this production to meet the energy needs of an entire country (and eventually much of the world). The Oil and Coal industries may see the wisdom of making the transition and choose to invest in establishing this new technology as the focus of their future business.

The key to a highly productive economy is an abundant supply of clean and renewable energy combined with an intelligent direction of that energy. The rate of energy usage of the world economy is very small compared to the rate of solar energy striking the earth. The entire energy needs of the United States could easily be met by the energy hitting a piece of land 100 miles on a side. In other words, a large amount of energy is available to power the machines which can multiply our human efforts and help meet the basic needs for survival and comfort of the Host Nation. And, as their production increases past the point of personal consumption, their net exports will increase the world’s standard of living.

Again, the foundation of this venture depends on establishing an economic environment for productivity in the Host Nation. The character of a nation’s people is the single most important factor to consider when investing in a business venture. I believe the risk in funding nation-building can be reduced by choosing nations with a Christian work ethic and Godly laws which honor contracts, property rights, and rewards for personal effort and initiative. For example, Uganda, with its current spiritual revival after the devastation of AIDS may be a good candidate.  The Nation-Building efforts should be include industry and technical experts who function in consultant, teacher, and managerial roles.  And, as we help build infrastructure we should teach the gospel.

Proverbs 19:17 (NKJV) He who has pity on the poor lends to the LORD, And He will pay back what he has given.