Bring Back Build America Bonds

Aug. 8 (Bloomberg) -- The unemployment rate remains stuckat more than 8 percent. More investment in roads, water systems,airports and other public infrastructure would bring both short-and long-term benefits. And state and local governments faceongoing deficits. So wouldn’t it be great if we could design anefficient way to channel tax subsidies to state and localgovernments to invest in infrastructure?

Turns out we already have: the Build America Bonds program,which was a huge success in 2009 and 2010, but then expired. Ifyou want an example of how political polarization is impedingsound economic policy, BABs would be hard to beat. Despite nocredible argument against it, a divided Congress refuses toreinstate the program.