Goldmark: New York can rebuild its economy

Last week I wrote about the need for a large, national program of capital investment in our infrastructure.

I'm not holding my breath for the paralyzed federal government to get its act together on that anytime soon, so let's talk about how it might be done here in New York State.

This state, like the country as a whole, is going through a large and sustained economic "decompression." Credit bubbles are collapsing, households are cutting back (if the breadwinners are lucky enough to have a job at all), and too many families are floundering around in the coils of an inflated home mortgage.

There is one thing, and one thing only, that can get this state moving again economically: investment in public infrastructure. The reasons to do this are the same as at the national level: We'll have to do it anyway, because our infrastructure is tottering -- witness the Tappan Zee Bridge -- and inefficient; it will make our economy more competitive; and there is no other engine in sight to get our economy moving again.

There are two powerful additional reasons for New York State to embark on this path. The first is that it will create jobs and power the state economy forward without waiting for the federal government to move. And the second is that investment in capital infrastructure is a traditional responsibility of the states, and it is something that New York is well positioned to do quickly and effectively.

Our new governor came out of the box in January communicating a sense of reality and relentless tenacity on the fiscal front, and he delivered a balanced budget. There are states all over this country in financial trouble, and some -- such as California and Illinois -- have been in the functional equivalence of bankruptcy for some time. Gov. Andrew M. Cuomo's actions have taken New York State off the critical list.

But now it is time to focus on building for the future.

The state's capital infrastructure program ought to be in the $50 billion to $75 billion range over five-plus years. At the upper end of that range, it will create roughly 400,000 jobs, almost all in the private sector, and boost state economic output by 5 percent to 7 percent. Doing so will mean borrowing by the state government and its authorities, but it will be responsible borrowing, for projects that have long, useful lives and generate far more in economic returns than the debt service they require.

New York's advantage is that it has a range of tested, responsible public authorities with access to the credit markets. We've already built subways, water tunnels, container ports, airports and power generation facilities. It's time to modernize our rail, roads and bridges, make our energy systems dramatically more efficient, and diversify our energy base so that our vehicles don't all run on imported petroleum.

Proposing a massive public infrastructure program financed by state and public authority debt will confuse some of those fiscal conservatives who supported the governor's drive for a balanced budget, and it will alienate others.

But we are in deep trouble and there is no other clear alternative. When there's only one path forward and when that path doesn't fit neatly into anyone's conventional political categories, then the job of a strong leader is to explain, to dramatize and to mobilize. That is the governor's challenge today.

Man does not live by cuts alone. And the state and its localities, like the rest of the country, are thrashing indecisively in the economic swamp into which our past errors have led us. New York State has the tools, the history, and now -- with a balanced budget -- the fiscal foundation with which to break out of this trap. It's time to do just that.

Peter Goldmark, a former budget director of New York State and former publisher of the International Herald Tribune, headed the climate program at the Environmental Defense Fund.