Asked about investment on the television talk shows Sunday, House Republican leader Eric Cantor (R-Va.) and Senate Republican leader Mitch McConnell (R-Ky.) each declared it was just another Democratic ploy to spend more money. Instead of Obama's "invest-and-grow," Republicans now offer "cut-and-grow," which will take its place beside "government ownership of the means of production" and "tax cuts that pay for themselves" in the Pantheon of Economic Nonsense.
Republicans, it turns out, have no public investment strategy, just as they have no health-care strategy and no agreed-upon blueprint for reducing federal spending. What they have are poll-tested talking points, economic delusions and an overwhelming partisan instinct to say "no" to anything Barack Obama proposes. In their response to the president's State of the Union message, they remind us once again that they are not serious about economic policy and not ready to govern.
In framing his retooled economic and political strategy, the president emphasized using public money to leverage private investment and innovation, once a popular Republican theme.
In the short term, administration officials expect the bigger boost to the economy is likely to come not from jobs directly funded but from additional private investments spurred by increased confidence and a renewed sense of national purpose - "our Sputnik moment," as Obama called it.
There is a similar emphasis on the private sector in the president's proposal for a National Infrastructure Bank, which will not only help to insulate the government's investment decisions from the political process but will focus on projects with demonstrable financial returns. Toll roads, smart grids, wind farms, freight lines and air-traffic control systems would compete for funding on the basis of their ability to generate user fees to repay the bank's bondholders.
In the energy sector, Obama expects to untap tens of billions of dollars in private investment with modest amounts of seed money and the right regulatory incentive - in this case a requirement that 80 percent of electricity comes from environmentally clean sources by 2035.
While high-speed or new transit projects may never generate enough revenue to cover the original investment, the president cited the experience with the transcontinental railroads and the interstate highway system - both started during Republican administrations - which showed that such projects could more than pay for themselves indirectly as a result of the private development they stimulated.