Noted bond and stock analyst A. Gary Shilling wrote a pair of opinion pieces discussing the economics of higher education for Bloomberg. In the first, he described the income benefit a college degree confers, escalating tuition costs, and the current financing model, which relies heavily on alumni donations and federal programs. His second article looks at the effect of the recession on college graduates’ job prospects and loan balances as well as university financing.
Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.
FTA to Provide Nearly $800 Million in Transit Grants
The Federal Transit Administration (FTA) announced plans to dole out almost $800 million to fund transit projects (WashPost). Funds were distributed at the state and local levels; an interactive map is available here. While the agency had received 836 applications, totaling $4 billion, FTA Administrator Peter Rogoff saw the $800 million as a down payment toward restoring U.S. transit infrastructure.
The first Renewing America Progress Report and Infographic Scorecard, provides a critical assessment of federal transportation policy, including a description of major policy initiatives and important steps policy makers must take to revitalize critical infrastructure.
Denver Rethinks Commuter Rail Strategy
Denver is considering moving parking structures away from commuter train stops to encourage the growth of dense, walkable villages (WSJ). By 2022, Denver plans to complete a $7.4 billion expansion of its rail system that first opened in 1994. The current system provides substantial parking near station stops, which attracts “park-and-ride” suburbanites, but that land would have been ideal for village-type developments for commuters, officials say. San Francisco and Portland are two cities that have emphasized walkable developments over park-and-ride convenience, and Denver is poised to follow their lead.
Lawmakers continue to debate the costs and benefits of investment in the U.S. rail network, with high speed rail a key issue. This CFR Backgrounder summarizes the historical development of freight and passenger rail as well as policy concerns and options facing lawmakers.
Infrastructure. Read more on how upgrading the nation’s aging network of roads, bridges, airports, railways, and water systems is essential to maintaining U.S. competitiveness.
International Trade and Investment
Tourism Helps Fuel Rising U.S. Exports
Growing numbers of visitors from Latin America and Asia are offsetting declining numbers of European travelers to the United States, and their increased spending is boosting U.S. exports (Bloomberg). Spending by foreign visitors—which is counted as an export—rose 8.1 percent over a 12 month period, almost double the rise in total exports of 4.2 percent. One Mexican tourist observed: “It is more easy to shop here because you have the malls with all the things for your family, and in Mexico you don’t have that kind of stuff.”
CFR Senior Fellow and Renewing America Director Edward Alden discusses the difficult visa process that foreign tourists face, recent improvements made for Chinese and Brazilians, and important next steps.
International trade and investment. Read more from leading analysts on the debate over next steps in U.S. trade policy.
Corporate Regulation and Taxation
An Offshore Tax Haven in Only Ten Minutes
A reporter for the New York Times discovers that online companies make setting up an offshore tax haven so easy that the process takes only ten minutes. The services allow Americans to easily take advantage of loose rules in places such as Panama, the British Virgin Islands, Belize, Singapore, Cyprus, the Seychelles, and the Cayman Islands. While setting up accounts is easy, maintaining them and legally minimizing taxes requires the expensive assistance of expert lawyers and accountants. Analysts estimate that up to $32 trillion, or around 10 percent of total global wealth, resides in such tax havens.
Corporate regulation and taxation. Read more from top economists and business experts on solutions for addressing corporate tax reform.
NEA Raises its Largest VC Fund
New Enterprise Associates (NEA), a venture capital (VC) firm, announced it had raised its largest VC fund ever, $2.6 billion (VentureBeat). NEA has a history of raising large VC funds, and will invest in young firms at all stages of development in IT, healthcare, and energy. These are the greatest areas of investment for the VC industry as whole. The size of this fund is another sign that VC continues to consolidate; today the ten largest firms control a third of all VC dollars, twice the proportion a decade ago.
In the face of persistently high unemployment, policymakers and workers look to innovation and entrepreneurship, the primary engine of U.S. job growth over the past thirty years. This CFR Backgrounder by Steven J. Markovich discusses how entrepreneurs and venture capitalists create and finance startups.
Innovation. Read more on how the U.S. capacity to innovate could play a chief role in economic growth.
The Morning Brief is compiled by Renewing America contributor Steven J. Markovich.