President Obama's Labor Day infrastructure initiative combined some appealing business tax proposals with a national infrastructure bank. Some NIB proponents estimate the total need for major investments in infrastructure to be as high as $2.2 trillion and the timing is intended to "create jobs" in construction. But why another government-sponsored enterprise?

The proposed NIB is the same as a national economic development bank, which is generally used as a credit allocation mechanism to implement a state industrial policy. Such institutions are first cousins to national housing banks, but with different interests.

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