Abraham Lincoln learned a hard lesson about bonding infrastructure when serving in the Illinois House of Representatives in the 1830s.
Illinois had built a series of internal improvements (infrastructure) projects that together were known as the “system.” This system failed when the national economy failed and this caused the Illinois Legislature to apply unpopular income taxes.
When Lincoln became president he implemented the National Banking Act of 1863 (which increased the money supply for agriculture, industry, and infrastructure) that reflected the hard lesson of attempting to fund infrastructure through state bonding only.
Today Alaska is facing a similar collapse of our national economy at the same time we will be attempting to build the Susitna Dams. Read my article “Build the Nawapa Susitna Dams; do not cripple Alaska’s future” for my solution to this problem.
In my article I explain how to avoid the potential for debt pyramiding while encouraging industrial development by using a staged development strategy.
The idea is for the state to pay cash for half of the first phase of the Watana Dam and bond the rest of the first phase. Then leverage a small percentage of state funds with Federal money for completing both the Watana Dam and Devil Canyon Dams. The second two projects will provide the excessive electrical capacity that can be sold very cheaply for industrial development.
Cheaply selling the excessive electrical capacity will help guarantee the success of our new privately run strategic and construction materials industries. President Lincoln’s hard lesson will inform our cautious approach.
This is what I believe should be our method and our mission.
