A Plan to Save U.S. Infrastructure That Might Actually Work

[Stephane Dumas]

I spotted this article from the Infrastructurist via the Skyscraperpage forum http://forum.skyscraperpage.com/showthread.php?t=193184 http://www.infrastructurist.com/2011/08/11/a-plan-to-save-u-s-infrastructure-that-might-actually-work/

The report, "Falling Apart and Falling Behind"  (pdf), is split into three sections, but as its title suggests it really centers on two themes: how American infrastructure has fallen apart in recent times, and how it can keep from falling farther behind. The first part examines how U.S. infrastructure dropped from 1st in global competitiveness in 2005 to 15th in 2010, in the cold numerical eyes of the World Economic Forum. Gladwellian rankings-are-meaningless disclaimer aside, the forum has a strong case. While America remains obsessed with its 20th-century highway system, other countries are expanding their balanced intermodal networks, argues BAF, which adds that what America does spend on transportation is not nearly enough. As a recent study by the Urban Land Institute noted, U.S. infrastructure spending as a percentage of gross domestic product has fallen steadily since the 1960s.

In sum, Building America's Future argues, the United States has failed to adopt a "forward-looking vision that could build a transportation network fit for a 21st-century economy."  Not surprisingly, BAF also has a few ideas about what such a vision should focus on. In the short-term, BAF recommends a transportation reauthorization that looks like this:

- A six-year bill that devotes significant funding to the NextGen air-traffic control system, freight and transit transport, and high-speed rail lines in the Northeast Corridor, California, and Chicago region.

- A strong highway "maintenance"  program (read: fix-it-first).

- A national infrastructure bank – a BAF favorite – to help leverage private investments.

[Michael in Philly]

In this political climate, I'm not holding my breath.

[Landshark]

High speed rail does not pencil out at this time. 

[realjd]

Seeing that infrastructure is essentially a state responsibility, I'd rather see how individual states stack up compared to other nations rather than the US as a whole. Or to see how the EU as a whole compares to the US.

[Michael in Philly]

Seeing that infrastructure is essentially a state responsibility, I'd rather see how individual states stack up compared to other nations rather than the US as a whole. Or to see how the EU as a whole compares to the US.

The Interstates were a federal initiative, mostly federally-funded.  The transcontinental railroad was a federal initiative.  The National Road was a federal initiative.  Things like Hoover Dam and all those TVA projects were federal initiatives.  I don't think we can have the infrastructure we need if we leave it up to the states, and I believe history bears me out.  But since a more-important-than-it-ought-to-be portion of our federal political leadership would be perfectly happy to see us sink into third-world status as long as their donors' taxes stay low, it may be moot.

[Brandon]

Seeing that infrastructure is essentially a state responsibility, I'd rather see how individual states stack up compared to other nations rather than the US as a whole. Or to see how the EU as a whole compares to the US.

The Interstates were a federal initiative, mostly federally-funded.  The transcontinental railroad was a federal initiative.  The National Road was a federal initiative.  Things like Hoover Dam and all those TVA projects were federal initiatives.  I don't think we can have the infrastructure we need if we leave it up to the states, and I believe history bears me out.  But since a more-important-than-it-ought-to-be portion of our federal political leadership would be perfectly happy to see us sink into third-world status as long as their donors' taxes stay low, it may be moot.

However, federal projects are only a small fraction of the infrastructure, and the interstates were built on the 90/10 formula, but intended to be maintained and improved when necessary by the states.  For much of the US history that we have built roads, we usually did it by a state-federal partnership (including the interstates).  Unfortunately, DC's lost sight of that.

[nyratk1]

The US has a really bad habit of whining about corporate and the ultra-rich's taxes. Most of these short term deficits are mostly because they're not getting the revenue needed because the lower and middle classes' wages have stagnated for the past 30 years.

So you have one side not growing and taking more of the burden (the lower/middle class) and you have one side shirking their responsibilities (the ultra rich/large corporations). It'll come back to bite them in the butt when they realize the lower and middle class is decimated and can't buy anything and the infrastructure is too damaged to deliver anything. But that's capitalism, it feeds itself on exploitation and short term profits. If the corporate stooges in the White House and Capitol Hill were smart, they'd be funding massive infrastructure improvements. But nope, the debt deal, Obamacare, all that, were corporate giveaways.

Government isn't bad inherently, a corrupted corporate government is though. The US briefly was able to focus on infrastructure after WWII but since then, many politicians have cut government down because it's bad and inefficient. No crap it's inefficient...these same people cut its legs off and are sucking the blood out. No institution can be efficient with that type of sabotage.

[3467]

One way to quickly boost the aggregate demand of the Middle Class would be a big infrastructure jobs bill . The stimulus was too small on that and its tax cuts were like pushing a string.
Sadly DC just soes not get this at all.
I have made various postings on dealing with the sad realyity of more for less like Missouris swich to 3 lanes instead of 4 for lower volume rural corridors. Many posters have stated that

[3467]

Sorry my web connection hiccuped.
.......were critical of MO But sadly the MODOT budget was cut in half . A few states like Indiana have been agressive and Illinois limps along but I really think Missouri may be the  future we face.
We have also debated tolling in San Diego as well as the Illinois tollway and US 20 as a solution or as another failed option
I am very happy Stephene Dumas started this thread because I would like to hear ideas. Otheriwse I really think the only catagory is going to be fictional highways

[NE2]

What we need first is maintenance of roads and passenger railroads (do shipping channels need it too?). Once we ensure that our infrastructure will remain in a state of good repair, we can go about expanding it where necessary. 2-3 lane roads are a very good option for medium-traffic rural corridors in hard terrain. Eastern Kentucky is full of these, and West Virginia would do well to consider the same for projects like I-73/74 and Corridor H.

[nyratk1]

Sadly DC just soes not get this at all.

DC does not get this because they're not there to "get it". They're just paid mercenaries sent in to loot and plunder and create favorable legislation for their sponsors.

[Brandon]

What we need first is maintenance of roads and passenger railroads (do shipping channels need it too?). Once we ensure that our infrastructure will remain in a state of good repair, we can go about expanding it where necessary. 2-3 lane roads are a very good option for medium-traffic rural corridors in hard terrain. Eastern Kentucky is full of these, and West Virginia would do well to consider the same for projects like I-73/74 and Corridor H.

Replace "passenger" with "freight" for rail, and you've got it.  Passenger rail in the US is a joke, and will be as long as there are more efficient ways of getting place to place (outside the NE Corridor).  Freight rail, on the other hand, is the backbone of our economy.

[NE2]

Er? Freight tracks are maintained well; it's construction of imporvements that may need public funds. As for passenger rail, I'm talking about the NEC as well as city transit systems; most other intercity lines are owned by freight companies.

[Brandon]

Er? Freight tracks are maintained well; it's construction of imporvements that may need public funds. As for passenger rail, I'm talking about the NEC as well as city transit systems; most other intercity lines are owned by freight companies.

They need a lot of untangling, hence the CREATE project here in Chicagoland.  Currently, it takes a freight train 2 days to cross Chicago.  The CREATE project will cut that to mere hours.

[J N Winkler]

One way to quickly boost the aggregate demand of the Middle Class would be a big infrastructure jobs bill. The stimulus was too small on that and its tax cuts were like pushing a string.

I basically agree with this, as do most economists of sufficient repute to win a Nobel.  Frankly we should never have had the Bush tax cuts in the first place, let alone the tax cuts which were part of the stimulus package, and the stimulus itself was too small.  But, as I see it, there are two main problems with a second stimulus package.

*  Countercyclical fiscal policy is based on the assumption that fiscal expansion will be followed in short order by an increase in business confidence, which increases demand in the private sector, which in turn increases tax receipts and allows the government to pay back the money it has had to borrow to expand spending.  In practice this assumption usually holds true.  However, we have been in a contractionary phase since 2007, we have had one stimulus bill and massive deficits for several years running, and a recovery in business confidence is nowhere in sight.  We are in a hole and digging has so far failed to get us out of it, which makes it very difficult to argue for more digging.

*  The tea party, which has considerable overlap with the well-established Grover Norquist tendency, wants to destroy the federal government's ability to carry out countercyclical fiscal policy because they see that as key to reducing the size of government as a proportion of GDP.  They pursue what the media calls "hostage-taking tactics" in regard to raising the debt ceiling, passing spending bills, etc. because these also serve the purpose of preventing a recovery in business confidence and thus delegitimize countercyclical fiscal policy in general.  When Rick Perry describes the Federal Reserve's plans for quantitative easing as "treasonous," that is straightforward hawking for tea party support.

I am fairly sanguine about the Highway Trust Fund weathering this storm, and so federal funding for highways and transit will continue at some level, but I don't see a transportation reauthorization bill coming anytime soon--let alone one which increases funding in real terms or raises marginal taxes on motor fuel.  Toll roads are not going to pick up the slack either.  There are too many proposed roads quite far along in the planning process whose social returns would pay their way if they were built as free roads but which would be commercial failures if they were developed as toll roads.  Few toll road agencies have enough surplus revenue from their existing roads to finance the construction of new ones.  Downgrading of US Treasury debt will eventually raise borrowing costs for infrastructure (in fact they are very low right now, to the point where some commentators have said we should borrow like mad so we can build, but I don't think this will persist for long, especially if we actually take advantage of those low rates and actually issue debt).  I think Obama's infrastructure bank plan is a dog that won't hunt.  It will take too long to set up, by which time the borrowing costs will be impossible.  Its megaprojects-only mandate will squeeze out private funding because megaprojects have enormous downside risks and it will not fund projects in sectors where the likely revenue streams would attract private-sector interest.  Basically, it is an uncharacteristically dumb idea, which I feel Obama trotted out during the 2008 campaign just so he could prove that he does not think corporate profit is evil.

Put simply, I believe we are four years into the longest and deepest funding drought for highways since 1945-56.  I remain confident of funding increases, and even an increase in marginal tax rates on motor fuel (though perhaps not the tripling which I would recommend), but it's going to be a l-o-o-o-ng wait.

[3467]

I agree with JN Winkler on ,well,all his points.
With a mile of interstate type road running from 10 million and up per mile ,I sure dont see a lot of miles being built except by Toll Authorities that have market acess like Illinois. Like Illinois i expect they wont be very daring and build only immediate cash flow generators.
Missouri not Indiana looks like the future(further discussion in Indiana indicates that the current construction is a one off event)
Meanwhile I see congress has let FHWA pick projects. I see FHWA is handing out 3.6 million to study the I-66 project in Illinois(Ohio Valley)

[Brandon]

I'll politely disagree with Winkler here (I usually agree).  The debt ceiling has been held hostage by both sides, lest we forget our current President who was against raising the debt ceiling in the Senate, and now he was all for it.  Party politics are played by both sides, but the Tea Partiers, even though their way getting the message across is so-so, have a point.  To crib form a former President, "It's the debt, stupid."  With this much debt, how can we afford to do more about our infrastructure in the future?  More taxes won't help, something's got to be cut, and we need to make some very hard and cold choices as to what to cut.

[NE2]

More taxes won't help

Here we go again...

[Brandon]

More taxes won't help

Here we go again...

Do you want to pay more taxes?  I certainly don't.  A reform of the tax system would be better, IMHO.  As for cuts, there are lots of cuts we can make, starting with curbing Medicare fraud (there's a shload of it) and pulling back our military from Europe (why do we need to defend them anymore?  Germany and France can take care of themselves).  We got ourselves into this problem by overspending to begin with (for decades, I might add, it wasn't done overnight), and like the guy who has spent too much on his credit cards with almost no hope of a raise, we need to make some choices.

[realjd]

http://ilovecharts.tumblr.com/post/8216001731/pantslessprogressive-how-the-debt-accumulated

[Michael in Philly]

Do you have a link for that?

[realjd]

Do you have a link for that?

I meant to include it originally. I've updated my post to have a source now. I saw it on a blog, but I think the original source is the NY Times.

[yanksfan6129]

So wait, a significant chunk of the debt is money that the government owes to...itself? Why doesn't it just forgive its own debt?

[nyratk1]

More taxes won't help

Here we go again...

Do you want to pay more taxes?  I certainly don't.  A reform of the tax system would be better, IMHO.  As for cuts, there are lots of cuts we can make, starting with curbing Medicare fraud (there's a shload of it) and pulling back our military from Europe (why do we need to defend them anymore?  Germany and France can take care of themselves).  We got ourselves into this problem by overspending to begin with (for decades, I might add, it wasn't done overnight), and like the guy who has spent too much on his credit cards with almost no hope of a raise, we need to make some choices.

You are not the ultra-rich or the corporations who creatively loophole their way out of taxes. Stop pretending you are and stop pretending they deserve their money - most of it is ill-gotten via exploitation (of labor, use of inferior goods/services, other countries) breaking the law or pure luck. If they're not paying their fair share, guess who bears the brunt of the taxes? The lower and middle class. Republicans (Tea Party or not), Democrats, they're all pro-big business cronies who either have campaign donations from them (like Obama), were employed by them or will be employed by them.

Also most of the country needs to learn marginal tax rates and marginal utility. But that's not usually taught to the general populace, because those with economic power benefit from the large, undereducated masses.

[corco]

So wait, a significant chunk of the debt is money that the government owes to...itself? Why doesn't it just forgive its own debt?

I highly doubt the millions of Americans who have PAID INTO social security would be OK with the government just forgiving $3 trillion worth of debt to that fund. I know I wouldn't be.