Our Infrastructure Emergency
February 3, 2009
“The American Society of Civil Engineers, in a report released last week, essentially described the state of American infrastructure as dreadful. More than a quarter of the nation’s bridges were rated structurally deficient or functionally obsolete. Public transportation systems and the nation’s dams and levees are generally in sorry shape, many of them more than a half-century old.
Listen to what the report had to say about the water we drink:
‘America’s drinking water systems face an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful life and to comply with existing and future federal water regulations. This does not account for growth in the demand for drinking water over the next 20 years. Leaking pipes lose an estimated seven billion gallons of clean drinking water a day.’
The society gave the nation’s infrastructure an overall grade of D and said it would require an investment of $2.2 trillion over five years to get it back into decent shape.
When you juxtapose this tremendous national need with the wholesale destruction of employment that has occurred over the past several months (and that is expected to continue for some time), you have to wonder why President Obama and Congressional leaders are not moving with extraordinary quickness to put together an infrastructure investment program that is both vast and visionary.”
The Republicans don’t. The latest mantra (witness Jim DeMint on Stephanopoulos) is that the stimulus bill isn’t even a stimulus bill, it’s a “spending” bill. WTF does that mean?! Apparently only tax cuts (of course!) represent a stimulus, especially tax cuts to the wealthy, who of course are going to create necessary demand in the economy by spending the money. Spending on infrastructure, among other things, is not stimulus. Michael Steele, the new RNC chairman went as far as to say that the government has NEVER created a single job. Even as a result of defense spending, Michael? WWII didn’t create any jobs? The Cold War? When I hear things like this, I begin to think: what is the point? How can you argue with these people if they are not following even the most basic tenets of reason?
OF COURSE government spending represents a stimulus to the economy. This is the CORE PRINCIPLE of Keynesian economics. OF COURSE rebuilding our troubled infrastructure would create jobs. Does Michael Steele honestly believe that the creation of the Interstate Highway System did not create a single job? Or does he believe that our National Parks did not create a single job? NASA? Amtrak? These projects – and I think this should go without saying – put millions of people to work. It puts salaries in their pockets. They spend these salaries on goods and services, creating necessary demand in our economy. Tax cuts to the top 20% won’t be spent – that money will be saved. Companies right now have excess inventory. There is a supply overhang. The wealthy are NOT going to invest their money in production. The only way to dig ourselves out of this hole is to put money into the pockets of people who are going to SPEND it. That’s the STIMULUS we need.
And if this spending accomplishes other long-term goals, that’s not a problem, that’s a benefit. Our nation’s infrastructure is in terrible disrepair. Any doubt about this could easily be relieved by traveling to almost any other wealthy democracy and riding on their trains or visiting their airports or looking at their roads and bridges. And the reason things are like that is because of underinvestment. Not waste, not earmarks, not pork, but underinvestment in necessary infrastructure, from highways to public transit to intercity rail to telecommunications to air travel. Among other things, this state of disrepair is inefficient. It raises the cost of doing business here. Business, quite obviously, rely on the ability to send people, goods, services, and information from place to place efficiently. The more efficient and more reliable our roads and rail systems are, the lower the costs for businesses that use them, which in turn means that less money has to be invested in order to get a return, which in turn means that more money will be invested.
And why not let the companies or whoever is using these infrastructure projects pay for them themselves on the free market? Imagine you live at the end of a short street that ends in a cul-de-sac. Imagine that the government won’t pay to pave your road or provide street lights, and instead insists that this be done on the free market. Will your road be paved? Will you get street lights? Imagine the government refusing to pay for air traffic control. It instead insists that this be arranged by the airlines themselves. Would you like that system? Would it be efficient? The extreme libertarian arguments put out there toughtlessly by many on the right ought to be dismissed out of hand. At a minimum it should be universally recognized that such arguments, whether you agree with them or not, are far outside the mainstream in economics. And, as a result, they should be subjected to tremendous scrutiny. Yet they are not treated this way – not by the media, not by the public. Why is this the case?