Can Overseas Cash Rebuild America's Infrastructure?

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July 19 (Bloomberg) -- Bloomberg Government analyst Nela Richardson explains a plan floating around Congress to bring back overseas corporate cash to fund infrastructure spending in the United States. She speaks on Bloomberg Television's "Market Makers."

Does it sound reasonable?

It is no secret that infrastructure is currently around the country.

We have new research that takes a deep dive into this problem and into the new plan exploding around congress that you just summarize.

The plan has promised.

It is a way to unlock the $2 trillion in overseas earnings and bring it back to the united states to be invested in infrastructure through a bank to solve some of these problems.

The plan may be too good because there is nothing to prevent congress from using these funds to fund all kinds of different projects from education to aids research.

Therein lies the heart of attention.

One of the criticisms that we saw during the recession is that it was not targeted to the right project.

There was excess spending.

How do you regulate and determine these projects and what the priorities are?

That is a key question.

I referred to that original stimulus from obama as cotton candy spending.

It was over before we knew it.

It funded short-term projects like potholes.

It employed people for a couple of months.

The idea would be to set aside money for long-term projects that have high returns over the course of the lifespan of the project.

Instead of these short-term projects that disappear after a quarter.

Does the analysis try to evaluate whether companies might be willing to do this?


We are always focused on companies.

Some companies would be very receptive to unlocking their overseas earnings, bringing it back to the united states.

Those happen to the companies in the service sector.

Multinational service companies would benefit a great deal from a program such as this.

Other programs would depend on the tax rate.

The last in line to take up such a program would be energy companies.

Knowing the winners and losers would be a crucial part of any kind of plan to implement it.

What about the fact that we are trying to have a corporate tax debate in this country, a personal tax debate?

There is momentum to change the tax cuts and rewrite it.

The psychopathy of something like this -- does that, kate something like this?

-- does it complicate?

The transition is costly.

This helps with the transition from a worldwide taxation to a territorial tax system.

Companies may be on board for just that reason.

Let's say we want -- people have proposed and what are alternatives for overseas profits and giving them a tax break in the process?

Taxation is one of the ways.

Whether you do it on overseas earnings are corporate earnings.

That will be a way to fund an infrastructure bank.

Private partnerships would also lead to funding of an infrastructure bank.

Those funds are thought of as coming out of a general treasury funds which has impeded progress.

That fund is marked for so many other different types of government spending.

When you have a pot of money at the end of the day, it is subject to desires for a lot of different projects.

Because of the sequester, there are government programs that are underfunded.

If you want to use it for infrastructure, it could be applied to a lot of different government programs currently.

A very timely topic, especially in light of detroit.

This text has been automatically generated. It may not be 100% accurate.


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