In some cases, it is argued that internal improvements can be used to reduce unemployment. Opponents of internal improvement programs argue that such projects should be undertaken by the private sector, and not the public sector. However, the private sector lacks the ability to make large investments that will not begin to provide a return for 50 years or more; consequently, almost all significant infrastructure in the U.S., including the Transcontinental Railroad, the Tennessee Valley Authority, and the Interstate highway system, were created through federal investment -- through private subcontractors. Advocates of American System Economics point out that such federal investments in infrastructure are counter-inflationary, because they increase the overall productive power of the economy, in contrast to federal investments that prop up speculative bubbles, as was the trend in the 1990s.
Improvements that are incidental to but necessary for the performance or completion of a proper governmental function, such as construction of a dam for the establishment of a wildlife refuge at Horicon Marsh.
Before 1969, the state used “dummy” corporations to circumvent the internalimprovements clause in an arrangement in which the state would create corporations whose purpose was to construct or finance a facility for use or occupancy by the state.
If Libertarian Party provides the new test for the internalimprovements clause, any building or construction project for which the state incurs debt, or to which the state is a party, need have only a predominantly governmental purpose, which could be the reduction of unemployment, the promotion of tourism, or the encouragement of industry.
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