Economist: The Cracks are Showing (US infrastructure)

[Prosperity]

The cracks are showing

http://www.economist.com/world/na/displayStory.cfm?source=hptextfeature&story_id=11636517

Jun 26th 2008 | CHICAGO AND NEW YORK

From The Economist print edition

America’s tradition of bold national projects has dwindled. With the country’s infrastructure crumbling, it is time to revive it

AP

THE Mississippi River pushed relentlessly past dozens of levees this month. Towns were submerged, their buildings tiny islands in murky water. Ducks paddled on ponds that had once been farmland. Some flooding was inevitable, given the force of the swollen Mississippi. But a poorly managed flood-defence system did not help.

For the past few years it has been hard to ignore America’s crumbling infrastructure, from the devastating breach of New Orleans’s levees after Hurricane Katrina to the collapse of a big bridge in Minneapolis last summer. In 2005 the American Society of Civil Engineers estimated that $1.6 trillion was needed over five years to bring just the existing infrastructure into good repair. This does not account for future needs. By 2020 freight volumes are projected to be 70% greater than in 1998. By 2050 America’s population is expected to reach 420m, 50% more than in 2000. Much of this growth will take place in metropolitan areas, where the infrastructure is already run down.

If America does not act, says Robert Yaro of the Regional Plan Association (RPA), a body that plans for the New York-New Jersey-Connecticut region, it will have the infrastructure of a third-world country within a few decades. Economic growth will be constricted, and the quality of life will be diminished.

It is not surprising that the floods have put infrastructure in the spotlight, but this time it might remain there. Droughts have shown the need for better long-term planning. Thanks to the soaring oil price, a surge in demand for buses and trains has exposed ageing transport systems in big cities and meagre investment in small ones. And the Highway Trust Fund, which provides most of the federal money for transport projects, will be at least $4 billion in debt next year.

The private sector is hungry to invest. In May Morgan Stanley raised $4 billion for its new infrastructure fund, Kohlberg Kravis Roberts (KKR), a private-equity firm, launched a global infrastructure practice, and Pennsylvania announced that Citigroup and Abertis, a Spanish toll-road operator, had won an auction to lease the state’s turnpike. Momentum for change exists. Will politicians respond?

America has a grand tradition of national planning, from Thomas Jefferson’s vision for roads and canals in 1808, which influenced policy for the next century (and led to America’s first transcontinental railway) to Dwight Eisenhower’s Federal Highway-Aid Act of 1956, which created the interstate system. Such plans stand in stark contrast to the federal government’s strategy today. America invests a mere 2.4% of GDP in infrastructure, compared with 5% in Europe and 9% in China, and the distribution of that money is misguided. The more roads and drivers a state has, the more federal money it receives, explains Judith Rodin of the Rockefeller Foundation, which funds infrastructure research. This discourages states from trying to cut traffic. And because the petrol tax pays for transport projects, if America drives less, there is less money for infrastructure.

Even worse is the influence of the pork-barrel. Only around 20 states use cost-benefit analyses to evaluate transport projects; of these, just six do so regularly. Alaska’s “bridge to nowhere” is an infamous result of this sort of planning. But it is not exceptional. Two months after the bridge collapsed in Minneapolis, the Senate approved a transport and housing bill that included money for a stadium in Montana and a museum in Las Vegas.

The result is disarray. America’s ageing water infrastructure is sorely underfunded: the Environmental Protection Agency forecasts an $11 billion annual gap in meeting costs over the next 20 years. One heavy storm can cause ageing urban sewerage systems to overflow. Last summer an 83-year-old pipe in Manhattan burst, sending a geyser of steam and debris into the air. Competition for water itself has become vicious. Georgia and Tennessee are in an all-out brawl over it.

America’s transport network is similarly dysfunctional, says a recent Urban Land Institute report. Important gateways, such as the ports in Los Angeles and New York, are choked. Flight delays cost at least $15 billion each year in lost productivity. Commutes are more dismal than ever. Congestion on roads costs $78 billion annually in the form of 4.2 billion lost hours and 2.9 billion gallons of wasted petrol, according to the Texas Transportation Institute. Although a growing number of Americans are travelling by train, the railways are old. America’s only “high-speed” train runs between Boston and Washington, DC, on an inadequate track.

How can all this be fixed? In January a national commission on transport policy recommended that the government should invest at least $225 billion each year for the next 50 years. The country is spending less than 40% of that amount today. Yet more important than spending lots of money is spending it in better ways.

The Brookings Institution, a think-tank, recommends that America focus on metropolitan areas, or “metros”, the top 100 of which account for 65% of population and 75% of economic output. “America 2050”, led by the RPA and a committee of scholars and civic leaders, has a similar scheme for “megaregions”, or networks of metros. The federal government should do what it can to ensure that these areas, first of all, have the infrastructure they need to thrive.

This means, among other things, an enhanced federal role in projects that cross state borders, including not only the interstates but intermodal freight and high-speed rail. A better system for evaluating a project’s benefit—within a broader strategy for economic development, for example—would help the public get more for its money. Metros would be given more incentives to reduce congestion and sprawl.

Barack Obama, the Democratic presidential nominee, has echoed many of these ideas. John McCain, the Republican one, derides the “bridge to nowhere”; his website even has a video game, “Pork Invaders”. But so far he has no strategy. Mr Obama’s plans include creating an infrastructure bank to help finance transport projects, supporting high-speed rail and investing in subways and buses.

Most controversial will be the question of how to pay for all this. Mr Obama’s infrastructure bank would aim to attract private capital. But the private sector’s role remains contentious. Both the Senate and the House have passed bills to raise money for passenger rail, but the White House wants private operators to be more involved. Pennsylvania’s effort to lease its turnpike, which follows similar deals in Chicago and Indiana, must still be approved by a sceptical state legislature.

User fees, says Mary Peters, the secretary of transport, are a way to reduce congestion while raising revenue for other projects. Introducing road pricing in just the biggest 98 metropolitan areas would generate some $120 billion a year, according to a study by Brookings. But it will be hard. New York’s legislature has quashed a plan for congestion pricing, though the federal government had promised $354m.

There is reason to hope. Beyond the campaign trail, many politicians have made infrastructure a big issue. Mr Obama’s infrastructure bank is a variation on a scheme that Chris Dodd, a Democrat, and Chuck Hagel, a Republican, introduced in the Senate last year. (The bill, is still pending.) In the House, Earl Blumenauer has proposed a commission to guide infrastructure investment. Ed Rendell, Arnold Schwarzenegger and Michael Bloomberg, the political juggernauts in Pennsylvania, California and New York City respectively, have launched a coalition to make infrastructure a national priority.

The benefits of investment would be felt in many ways. Terence O’Sullivan, president of the Labourers’ union, says 47,500 jobs will be created for every $1 billion the government spends on infrastructure. “Make no little plans”, said Daniel Burnham, one of America’s great urban architects. “They have no magic to stir men’s blood.” It’s time to think big again.

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It's time to give up the empire. We should turn our focus away from our myriad of global "interests" and back to what matters most... keeping our country the most functional and resilient on the planet. We can't do that by pouring money into grand imperial projects in the Middle East or else where... we are going to need to use that money back right here at home... and as a benefit the money we spend on infrastructure won't be going into a hole... it will mostly be spent on American companies, and all the benefit will be for Americans (in the form of infrastructural capital, which will make all of our commerce more efficient). It's time to revitalize the country.

[ACW]

I can think off the top of my head how to get at least some of this. Divert money from the following:

-ONDCP (Drug Czar's office)

-DEA

-Some of the FBI (we don't need to stop adult porn; the War on Drugs must end)

-FCC (at least part of it)

-Farm subsidies :doh:

-In fact, most of not ALL corporate welfare

Oh, wait, that would all make SENSE

[DCsportsfan53]

I was just talking about this with friends earlier this week. When you think about it, we haven't gone into any great building projects since the 50s and the post war boom. We've been living off what was built then. It's about time. Also, given the current economic problems, investing in re-building the country would be a great way to put a lot of people to work in real, meaningful jobs and maybe help draw us somewhat away from a retail, bull**** based work force.

[Fergasun]

I was just talking about this with friends earlier this week. When you think about it, we haven't gone into any great building projects since the 50s and the post war boom. We've been living off what was built then. It's about time. Also, given the current economic problems, investing in re-building the country would be a great way to put a lot of people to work in real, meaningful jobs and maybe help draw us somewhat away from a retail, bull**** based work force.

So instead of borrowing money from China to go to war we borrow money from China to build up our infrastructure? Anyways, I'm not convinced our leaders are willing to divest from Iraq.

It's a good idea so long as we also draw down the deficit... if we just borrow more to spend more... well, we're on the way to being no longer a 1st rate country anyway.

So what if the private companies wanted to make all the new "infrastructure" toll roads, etc? Furthermore... didn't a bunch of towns build new stadiums for NFL teams in the past 30 years... hey, maybe those things are excess that we can no longer afford when our roads are crumbling... but sports are much more sexy than potholes and levees...

[Prosperity]

I don't think it really matter whether its the private or public sector, but we need the planning to be done on a national scale for the best long term consequences. But deficit spending isn't nearly as bad when its spent on productive stuff like roads, bridges, and rail. On the plus side, since so much of our infrastructure is old we can replace it with the newest high tech ****... high speed trains anyone? As an added bonus, this is one of the few ways we can spend money that ought to be bipartisan, I mean infrastructure is never going to be a divisive issue (though the money taken from other programs will be). We may need a big national project to make us think big and united again.

[twa]

""Yet more important than spending lots of money is spending it in better ways.""

Not much faith here in the Feds actually taking that advice,they are quite accomplished at throwing money at a problem though(in a bi-partisan manner)

[SnyderShrugged]

Now wait a minute, I learned in another thread that these are the "benefit for society" projects that our esteemed govenment uses our looted tax dollars for.

So much for the getting our moneys worth argument.

[Prosperity]

They are, we just haven't spent enough money on them, instead we waste our money in bombs and bribes

[Fergasun]

Let's build a pipeline powered by nuclear power plants that will pump water from the east coast to the west coast and desalinate it... so when "global warming" hits, no one will be under water and Arizona, Neveda, and parts of California that are really dry (and other areas without a lot of water) and continue to be habitatable.

[Dallsux]

The biggest problem is the MISUSE of what money they have received for these things already. Road projects, building projects, infrastructure...the money usually ends up in some rich greedy *******'s pockets while the American public suffers. To be honest, you can throw all the money in the world at these projects, but the problem will still remain as long as we continue to allow these greedy politicians & corporate owners to pocket the money & misuse it for THEIR personal gain. Every politician-EVERY-is as crooked as the letter 'S' & I believe that they will not act until it is far too late & we have far too little money to fix these problems. It seems we may already be reaching that point, tho. :2cents:

[ChocolateCitySkin]

eh i said this a week ago -- but most people seem more concerned with nuclear power.

[Prosperity]

The biggest problem is the MISUSE of what money they have received for these things already. Road projects, building projects, infrastructure...the money usually ends up in some rich greedy *******'s pockets while the American public suffers. To be honest, you can throw all the money in the world at these projects, but the problem will still remain as long as we continue to allow these greedy politicians & corporate owners to pocket the money & misuse it for THEIR personal gain. Every politician-EVERY-is as crooked as the letter 'S' & I believe that they will not act until it is far too late & we have far too little money to fix these problems. It seems we may already be reaching that point, tho. :2cents:

I don't think giving up and complaining is the best policy

[ChocolateCitySkin]

what interest me about obama is he wants the US to become a global green leader and export our green products and technology. what would be interesting is if he can create a movement that involves converting our failing infrastructure into a green infrastructure. it would have tobe something akin to the new deal but could potentially reinvent america and absolutely put us on top of things again.

of course, that would be a social program and thats a no no right????

[The Sisko]

what interest me about obama is he wants the US to become a global green leader and export our green products and technology. what would be interesting is if he can create a movement that involves converting our failing infrastructure into a green infrastructure. it would have tobe something akin to the new deal but could potentially reinvent america and absolutely put us on top of things again.

of course, that would be a social program and thats a no no right????

Don't you know he's a Muzlum? He hates "whitey" and won't wear a flag pin. What's wrong with you?

[ChocolateCitySkin]

Don't you know he's a Muzlum? He hates "whitey" and won't wear a flag pin. What's wrong with you?

you forgot to add "i hads enough of them hussein fellers"

[The Sisko]

:laugh: :laugh:

[Larry]

So instead of borrowing money from China to go to war we borrow money from China to build up our infrastructure?

At least in the case of infrastructure, 5 years from now, you'll have something to show for the money you spent.

[ChocolateCitySkin]

At least in the case of infrastructure, 5 years from now, you'll have something to show for the money you spent.

Fix the infrastructure. You're a fascist. BTW, I'm never gonna let that one go.

[Fergasun]

I'm not arguing against it, just saying please use the money wisely. Also, don't borrow beyond what we can afford.

None of you guys like my idea of the water pipeline? I mean if everyone is predicting NYC will be underwater in 10 years... why not divert the water nationwide to places that need it?

Also, the western states can build solar array's the size of pyramids and pipe that electricity back east. Just imagine building the huge solar towers you could build...

[Smoot Point Really]

IMO, this is a States issue... Not Federal. I'm even pissed that my own State tax dollars get sent to improve roads that I don't drive on, now I'm supposed to feel responsible that I didn't send even more of my tax dollars to Louisiana or Minnesota? All States get Federal dollars already... If they want to be "3rd world", they do it to themself.

[SUSkinsFan]

IMO, this is a States issue... Not Federal. I'm even pissed that my own State tax dollars get sent to improve roads that I don't drive on, now I'm supposed to feel responsible that I didn't send even more of my tax dollars to Louisiana or Minnesota? All States get Federal dollars already... If they want to be "3rd world", they do it to themselves.

That doesn't work because if Maryland is solely responsible for its portion of I-95 and doesn't maintain it then the number of accidents involving trucks that deliver things go up, and then the price of the goods they deliver is going to go up which effects not just the people of Maryland.

The reason your tax dollars go to roads you don't drive on is because the trucks that deliver the food to your local grocery store drive on them. The reason your tax dollars go to schools (even if you have no children) is because the doctors and nurses that will eventually take care of you attend those schools. You have to look at the big picture. Just because something doesn't DIRECTLY affect you doesn't mean it doesn't affect you

I think spending federal money on infrastructure is a great idea. I would love to see America dive headfirst into building new roads, rail lines, power plants, schools, universities etc.

[Smoot Point Really]

That doesn't work because if Maryland is solely responsible for its portion of I-95 and doesn't maintain it then the number of accidents involving trucks that deliver things go up, and then the price of the goods they deliver is going to go up which effects not just the people of Maryland.

Why shouldn't Maryland be solely responsible for its own roads? Virginia solely responsible for its roads? Better yet, the people who drive on those very roads be responsible for the maintenance of those roads? This is a very "libertarian" argument. I don't normally employ libertarian arguments, but this one makes sense to me.

Anyway, we already give money to these states (like Louisiana) to fix their infrastructure and the State and Local governments divert those funds (like New Orleans) and misappropriate them (dike fund).

The people of Hawaii shouldn't be paying to maintain the roads of Maryland, but they already do... Advocating them send more is what I have a problem with... It's bad enough we send as much as we do already. The author of the article uses Katrina and the Bridge in Minnesota as examples, but those are examples of State and Local government failings and should not become an excuse to pump more funds out of the Federal government.

BTW, the gentleman who recommended we cut some Federal government areas was correct that there are places we should cut (not saying I agree with what to cut, but that is a different argument). However, I'm not advocating we throw that money into this bucket.

[SUSkinsFan]

Why shouldn't Maryland be solely responsible for its own roads? Virginia solely responsible for its roads?

Because more than the people of MD rely on those roads.

[SnyderShrugged]

Heres an idea....

Maybe Congress should stick to the rules layed out for them specifically

Article 1, section 8

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and Post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

It seems to me (and many, many, others) that Congress has overstepped it's bounds in many of these, yet gave away some their powers that were supposed to be limited to them, and them only, to the executive branch and even the judicial.

Any item that isnt specific in this article (meaning not needing someones interpretation or case law) is a power reserved for state and local government. There was a good reason to have these strict sepatation of powers, and we are seeing the results of strying from that foundation. (IMHO)

All of our nations woes would be on the mend if we simply followed the original structure and intent of the founding documents of our fair nation.

now I'll prepare myself for the inevitable "Pile on"! lol

I still love you guys!

[Zen-like Todd]

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

That's the relevant clause when it comes to federal transportation infrastructure.