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ROADS, BRIDGES AND PORTS TO NOWHERE

October 31, 2016

ROADS, BRIDGES AND PORTS TO NOWHERE

Like the weather, everybody talks about redoing our crumbling infrastructure but nobody does much of anything about it, even though many such proposed projects enjoy bipartisan support. Even Trump and Hillary agree, though she has a detailed plan on how to do it and Trump, as usual, has offered no specifics. So what’s the problem? It is clear that if there was ever a time to get on with the nation’s renewal of its roads, streets, bridges, ports, airports, public buildings etc., it is now – right now!

The Fall Edition of The American Prospect (my favorite political magazine) points out that we should go to work on this project at once since, among other things, interest costs for a new debt-financed infrastructure initiative will never be lower than they are now, that going to work on it right now will save billions in interest costs alone, and that with the Federal Reserve getting ready to raise rates, the next president will face a narrowing window of opportunity to move an agenda predicated on such low borrowing costs. It is going to have to be done before bridges start crumbling in earnest, as predicted by the American Society of Civil Engineers, and it is not only a matter of public safety. Fixing our infrastructure is good for people coming and going to work, shopping etc. and is good for business efficiency in, for instance, the trucking industry (where infrastructure repair and renewal would lead to greater efficiency and thus greater profits for the transportation business and perhaps even lower prices for consumers like you and me).

Fixing now what we are going to have to be fixing in any event also provides employment for millions of workers in good paying jobs, which will greatly increase aggregate demand in our economy as well as the ancillary employment we will need to handle such increased demand in the marketplace. Hillary has talked of ways and means of handling the costs of such infrastructure efforts while Trump, as earlier noted, has not come up with a program dealing with a problem about to become one of crisis proportions, if not already.

Have you ever been in Los Angeles or Atlanta or metropolitan Washington, D. C. during rush hours? How many billions of man hours have we lost while sitting in traffic jams with engines idling but going nowhere, and how about truck deliveries around urban areas that are delayed by reason of our un-fixed infrastructure? When you add all these costs up (plus time lost from other pursuits we could be enjoying), we are probably paying for what a fixed infrastructure would cost us anyway over time. Why should we be paying for a fixed infrastructure (albeit indirectly) when it isn’t fixed? It makes no sense.

It is not only roads and bridges that are crying out for fixing per the American Society of Civil Engineers. We also have big problems with our ports. Our ports are constrained by poor water and land access, and increases in the size of ships and cargo volumes as a result of a wider Panama Canal promise to create further bottlenecks to ocean-going commerce. We have a harbor maintenance tax designed to pay for U.S. Army Corps of Engineers’ dredging and other such activities to keep our ports open and humming, but the Congress in its infinite wisdom has directed that such taxes go to other federal budget programs. We not only are not preparing for the future; we aren’t even playing smart with the present.3

We here in the richest country in the world are living in a world of leaky pipes, corroded railroad tracks, decrepit trains and faulty wiring, while those in Europe and even China are enjoying state of the art 21st century infrastructure and all the efficiency that goes with it. I have blogged before that I thought the Minnesota bridge collapse in 2007 and the Americans killed as a result would galvanize public opinion and that we, thus motivated, would begin to start listening to our civil engineers and fix our roads and bridges at the very least. I was wrong. Apparently we would rather kill Americans than pay for what we will eventually have to pay for in any event.

That bridge collapse, last year’s Philadelphia Amtrak disaster, Flint’s drinking water catastrophe and the ongoing Washington D.C. subway maintenance crisis are but a few of many examples which could be cited as results of our failure to fix our infrastructure, and American business is constantly complaining about America’s decline in competitiveness due to such failure, but is anyone listening?So what’s the problem? Are we going to allow those who seem to be content with the crumbling of America to have their way? Possibly. The piece in the American Prospect notes that “Despite natural and man-made disasters like Katrina and Flint, too few Americans  grasped the fact that we face an infrastructure emergency” and that “unlike the Great Depression, the financial collapse and the Great Recession created a psychology of public-sector austerity rather than a 1930s-style wave of new public investment.” Such observations are true to a fault. We need a change in thinking, and a sea move from austerity to Keynesian economics.

In a wealthy country such as ours it would seem that drinking water can be clean and the pipes that convey it lead-free and that we can have a power grid that is fully automated and backed up with much improved transmission and distribution facilities. It is also not too much to ask for us to have smooth and well-paved roads everywhere, mass transit that works, modern air-traffic control, and high-speed rail hugging the coasts from Maine to Florida and Washington state to southern California, all as suggested in the Prospect piece.

Yes, it will cost money, but as the old saying goes, it takes money to make money, and this is not spending but investment. The enormous boost in demand and increase in employment and revenues to the government would, in time, pay for such investments in our future, but even if they did not, we have no choice if we are to compete in this globalized economy. So what are we waiting for?

We have the perfect storm of historically cheap interest rates, people who need good-paying jobs and businesses that would be more competitive if we did what we will ultimately have to do anyway before more bridges collapse and more Americans are killed, so let’s get on with it after the election.    GERALD     E

 

 

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