Should there be a Department of Public Investment ?

I had this idea while talking with someone at a xmas party. Bailout fatigue is setting in but I think that it's possible that such bailouts might not be necessary, and recessions could be a little more rare if governments (federal, provincial and local) took more of an interest in sustainable economics to begin with. So, here is the big what if:

What if we set up a Department of Public Investment (D.P.I.)?

It would work something like this:

The DPI would get an annual budget (let's say 3 billion - the amount that the auto sector bailout is going to cost). It would be kept arms length from government. The DPI would have a charter that defined the kind of investments they were looking for, but the DPI would not be allowed to lobby government and government would not be allowed to interfere in the decisions of the DPI.

So, for example, the directive might look something like this: The Department of Public Investment should look for long term investments that provide jobs and economic activity within Canada. These investments should be in industries that are economically and environmentally sustainable.

After a period of time, say 10 years, the DPI would be expected to start returning money to the government: So, and this should also be made clear in the directive: The DPI makes investments, it does not give handouts or grants. These investments are expected, over time, to return profits.

The DPI would make annual reports available - to government, the media and taxpayers. It could invest in new technologies, startups, or existing industries that are trying to re-create themselves but these investments would be based on realistic business plans and the expectation of creating profitable companies (instead of throwing money at dying business' to try to prolong their death.)

The DPI should also (and this is something that alot of taxpayers are going to hate) - hire people who have demonstrated success in the private sector and pay them salaries (and even bonus') that are in keeping with private sector expectations. In other words hire people who know business and economics and have a track record of success - not bureaucrats who have always worked for the government.

If this idea were adopted, and worked the way I think it would it could insure a continually growing economy with new industries and technologies continually in development. It would help these business' to succeed by investing in them, instead of offering them loans and adding to their debt load. It would provide tax payers with the promise of returns - eventually adding to the government coffers instead of draining them and switching from public subsidies to public investments in the economy, jobs and industries.

This is, as I've said, a rough idea - something I've just come up with recently and haven't examined from every angle yet so I'm interested in hearing what people have to say.