It’s the Infrastructure…Stupid!
Presently, all talk in Washington is focused on the latest twined crisis: the debt ceiling and sequestration.
In the background of this collective hand wringing and fear mongering over this new self-imposed crisis in Congress, something bigger is looming; our crumbling infrastructure and its insufficient Federal funding.
Well-maintained infrastructure is essential for the economic health of the United States. Its bridges, roads, dams, transit systems, airports, sea/river ports, water/sewer systems, and electrical grids are in grave need of repair and expansion.
The problem with our highways and bridges has been known for a significant amount of time, perhaps more than 30 years. It is also widely documented that our power grid is woefully inadequate to cope with the modern demand for power.
This is not a complicated issue. When you build things, you must maintain them or eventually see their deterioration. This is evident in the aging miles of the Interstate located in urbanized areas, leaking sanitary and water systems; numerous deteriorating bridges in all states and cities, and worn rapid transit tracks.
Recently, hurricane/tropical storm Sandy proved the vulnerability of our urban infrastructure. It will take months to rebuild all that was damaged in just a few hours. However, some of the infrastructure was in need of repair before this natural disaster. Although denied by some, Sandy was a wake-up call to many that global warming is a reality and not some ‘leftist’ propaganda. The rebuilding of infrastructure along coastal areas due to Sandy is merely to return to status quo. What should be in process is rebuilding of infrastructure in accordance with possible erosion, sea water rise and the future storms of the same or greater magnitude.
All these issues concerning the deficit are ignoring the obvious that major infrastructure improvements are far more important than gaining more revenue or cutting expenditures. Trans-Continental Railroad and the Interstate and Defense Highway System actually created jobs, brought about additional development and led the U.S. to be the largest economy in the world.
Let us remember another time when America was struggling economically–The Great Depression. During this time, Works Project Administration built major infrastructure improvements such as dams, bridges, public parks and other physical structures which many of them are still among us. These were not ‘make work’ projects, but those that put Americans back to work, pumped needed money into the economy and provided the essential framework for America’s future role.
With infrastructure failure and the needs of new infrastructure not being met, reducing the deficit, while important, should not over-shadow this glaring issue. The economy will be severely damaged by failing infrastructure if this situation is not addressed. Industries, business, goods movement, mobility, job creation, social welfare, and revenue generation all depend upon maintaining and expanding infrastructure.
It was encouraging that President Obama made infrastructure one of the primary topics in his recent State of the Union. Particularly noteworthy was an anecdotal reference about Siemens stating that they would invest more in USA if there were significant infrastructure improvements. What was given a brief mention was the construction of a high speed rail network which could prove to be a significant economic boost to the U.S. economy (See my earlier article in the Progressive Press on high speed rail, “On the Side Track? High Speed Rail in North America.”) There are also new Interstate Highway construction planned to make better connections internally and to Canada and Mexico, which were not important to be placed within the State of the Union.
President Obama was nudging the U.S. Congress to act in a bi-partisan manner to tackle blaring issues such as infrastructure. This was a veiled rebuke to the Tea Party Republicans who now dominate the GOP. Presently, Republican Party’s obsession with abortion, immigration, marriage equality, gun control, Obamacare, cutting social programs and the deficit, is preventing serious consideration of issues such as infrastructure, job creation, income inequality.
One questions if the Republicans have the basic understanding of the underpinnings of the economic sustainability and the gravity of their foot dragging actions. There are rumblings in the GOP toward a most centrist approach, but the action is being considered with kid gloves to avoid the ire of the volatile Tea Party radicals. It is unfortunate that the present environment among Republicans in the Congress is one of posturing to the radical right. This may become their Achilles‘ heel in the upcoming election of 2014.
Must we see another tragedy as happened in Minneapolis with the collapse of a major bridge over the Mississippi River, before the U.S. Congress takes action? Or like the U.S. Chamber of Commerce director Janet F. Kavinoky says “Unless we increase overall funding for infrastructure, all we’re doing is fighting over the placement of the deck chairs on the Titanic.”
Image Credit: www.denverpost.com/commented/ci_6521227
You know… you really should try not to quote people from the U.S. Chamber of Commerce. They are one of the WORST offenders in halting progress on climate change.
I know Anne Kiley, but the quote was just so poignant, that’s why we added.
Well the Chamber of Congress is probably correct in this specific instance.
presently ≠ ‘at the moment’
Hurricanes and tropical stroms have happened since the beginning of time. There have been stronger storms than Sandy in the past. There’s no way “global warming” played any part in creating Sandy. Other than that, the article does a good job of pointing out the US infrastructure is in deep trouble. The biggest problem is finding a way to finance repairs and construction without more debt. Public private partnerships should be considered.
A well-written article about our pressing infrastructure problems. Our problems with infrastructure improvement, maintenance and funding pre-date the Tea Party. So, while the Tea Party has not offered solutions, perhaps they are getting more blame than they deserve for the status quo.
There are several reasons why there is a disconnect between the country’s need for infrastructure and the public’s willingness to pay for it:
1. When infrastructure works well, it is almost invisible and people take it for granted. (You turn on the faucet and water comes out. You flush the toilet and sewage goes away. You get in your car and then arrive at your destination.)
2. Politicians don’t get rewards or attend “ribbon-cutting ceremonies” when they pass funds for infrastructure repair or maintenance.
3. We have divorced payment for infrastructure from its consumption. When we go to a store, we part with our money and come away with something that we want. This activity of purchase connects us with the costs of supplying a particular product and our desire to consume it. But, when we pay our taxes, we don’t have a clear idea about how the money is spent. And, because it often appears to be free to use roads and highways (even in congested places at congested times) we try to drive and park in congested places at congested times more than we would if we had to pay the true costs of doing so.
4. When infrastructure is well-designed and well-implemented, it often inflates the value of well-served land. So, after paying for highway construction through my taxes, if I want to get the most value out of a new highway, I want to have my home or business near an interchange. But the value of land near the interchanges has increased due to the new highway. So now I must pay the landowner a premium rent or price to have access to the land that my taxes made valuable in the first place. Paying twice for infrastructure does not make the public happy or enthusiastic about paying for more. Sometimes, land prices near interchanges or transit stations rise so much that they actually chase away the development that they were intended to encourage.
These are only a few of the reasons for the disconnect between our need for infrastructure and our willingness to pay for it. Fortunately, some of these issues can be solved through the use of sophisticated user fees (performance-based parking fees, mileage- and congestion-based roadway prices, and value capture.) For more information on some of these solutions, see http://www.justeconomicsllc.com .