Friday, March 10, 2017
Our Infrastructure is Outrageous
The number bandied about by the Trump administration is $1 trillion, but the American Society of Civil Engineers sees a need for a firm commitment of more than quadruple that amount ($4.59 trillionover the next 10 years) to bring our national infrastructure to acceptable. To a GOP-controlled congress, $1 trillion seems outrageously too much, and they have managed to push Trump to suggest his infrastructure program will be delayed until at least 2018. But a failing and inferior infrastructure costs us hard dollars… both in terms of waste that slams out global competitiveness and in personal costs, in money and health.
We’ve had hundreds of billions of damage inflicted on us over the past few years from collapsing dams, highways and levees, massive water loss and toxic damage from water and sewer-pipe failures, sink holes, brown-outs and blackouts from electric grid outages, loss of potable water, cyber-vulnerability, irrigation impairment, etc. Natural disasters amplify their destructive force when the descend on crumbling infrastructure, either unable to contain the impact or teetering so close to the edge of failure that any negative event takes the failure over the top.
We actually can measure those personal economic costs. For example, we can look at simple events, like driving to work. The costs are often reflected in excessive commute times – dumping air pollutants, wearing out our cars, sucking down our productive time and wasting fuel by the ton. “Rebuilding the nation’s infrastructure was a key element of Mr. Trump’s plan to make America ‘great’ again. And anxious experts who’ve been watching it crumble for years are hopeful this time the issue might finally get the attention it deserves.
“‘I think we’ve just been in a mass collective state of denial about how important these systems are, and what it takes to keep them up to snuff,’ said Casey Dinges, who is with the American Society of Civil Engineers. Later this week they will release their highly-anticipated ‘Infrastructure Report Card.’ sLast time they gave the nation a D+. [The did that again on March 10th]
“‘Road conditions cause the average American to spend another $500 a year on car repairs,’ Dinges said. ‘By the year 2020, if we don’t start making proper investments, personal family income will fall by $3,000.’
“The United States used to have the best infrastructure in the world, but those days are long gone.” CBSNews.com, March 5th. We spend a fraction of the percentage of GDP that China spends on building their highly-competitive infrastructure. As I pointed out in a recent blog, in my last trip to the People’s Republic of China, which involved a lot of driving in and around Beijing, Hangzhou, Shanghai and Pudong, I failed in my quest to see a single pothole. And that’s the economic power that challenges more and more every day.
Part of the problem stems from our national failure to understand the difference between “spending” (which is simply a cost without a measurable economic return) and “investing” (where the invested capital is returned with an additional and measureable upside to us all). That piece of ignorance will continue to cost us dearly. You cannot spend enough on solid and good investments, but you can waste trillions on stupid spends with nothing back in return.
“‘I think there’s no danger that we’re gonna spend too much,’ said Larry Summers, who served as Treasury Secretary under Bill Clinton, and was an economic advisor to President Obama. He is one of a growing number of economists who say the money to pay for an increase in infrastructure spending should be borrowed.
“‘A moment of unprecedentedly low interest rates should be a moment of unprecedentedly high investment,’ he said. ‘And it’s a tragic irony that it’s a moment of unprecedentedly low investment.’… ‘Why is that?’ [CBS reporter Kris] Van Cleave asked. ‘Why aren’t cities, states and the federal government going, ‘We should act now’?’
“‘Some of it is general distrust of government,’ Summers replied. ‘Some of it is frustration with the difficulties in getting infrastructure projects done quickly. Some of it is just a generalized gridlock that seems to infect our politics.’” CBS.com. Unfortunately, we are living on the investments in infrastructure from past generations, which are now slipping into a history that is becoming the distant past. The last great American infrastructure push happened well over half a century ago.
Oh, and you know that part of the new administration’s plan is to enlist private investors, allowing them to charge some pretty nasty tolls for the use of the infrastructure they build. As Trump himself stated, his plan will be funded ”through both public and private capital, creating millions of new jobs.” Think of that as a wealth transfer from the common folks who rely on those roads and bridges and the corporations who will make them pay for it… through the nose.
Aside from the lost taxes from incentives to corporations to invest in infrastructure, you can expect privately-built or improved toll roads well-north of 50 cents a mile, with locked-in price increases for decades. Bridges and tunnels could cost passenger cars and arm and a leg in this privatized world, and God help truckers. We need that infrastructure desperately, but we really don’t need a wealth transfer tax. Yet we know that the government hasn’t really gotten behind a large infrastructure for over half a century.
“The Federal-Aid Highway Act of 1956, popularly known as the National Interstate and Defense Highways Act (Public Law 84-627), was enacted on June 29, 1956, when President Dwight D. Eisenhower signed the bill into law. With an original authorization of US$25 billion for the construction of 41,000 miles (66,000 km) of the Interstate Highway System supposedly over a 10-year period, it was the largest public works project in American history through that time.” Wikipedia. That highway system definitely “made America even greater” with the best road system on earth. Then. If we do not address this massively destructive issue soon, we will be selling off assets to China to make ends meet and experience our greatness only in history books.
I’m Peter Dekom, and for those in Congress who say they believe in America, perhaps they need to prove that they believe that it is worthy to invest in it.