Infrastructure
| Mon Oct. 20, 2008 9:12 AM PDT
INFRASTRUCTURE....Time to rebuild our nation's infrastructure? Support for the idea is growing:
Public officials, engineers and policy experts have been warning for years that crumbling infrastructure is a ticking time bomb....A third of the nation's major highways are in poor shape, according to the Department of Transportation. The list of unsafe dams is growing. Mass-transit systems, water-treatment plants, hazardous-waste sites and more are falling apart.
The civil engineers association gave the country a "D" on its 2005 infrastructure Report Card. It called for a $1.6 trillion five-year improvement program.
Now, sure, you'd pretty much expect a civil engineers association to back a program of civil engineering projects. Still, the time is right. The usual argument against infrastructure projects as fiscal stimulus is that they take too long: you have to identify projects and draw up plans first, and only then do you put people to work building stuff. By the time the projects get started, the recession is over.
But not this time. The recession we're going into now promises to be deep and long, and a big slug of infrastructure improvements would not only be handy things to have, their timing is pretty good too. And politically it's doable too since there are plenty of projects available for all 50 states.
McCain hasn't bought into this because (I'd guess) he still doesn't really appreciate the scope of our financial problems. Plus he probably associates infrastructure projects with earmarks, so he has a Pavlovian reaction against them. Obama has done a little better, but only a little. It would be smart, both politically and substantively, for him to at least start making more aggressive noises on a big, bold infrastructure plan.
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The Japanese tried this infrastructure investment solution. It did not work. Too much public debt.
From this week's Economist (http://www.economist.com/finance/displaystory.cfm?story_id=12437739):
"The government's response was to spend. It forked out about ¥120 trillion between 1992 and 1999, mostly on useless construction projects in the hard-hit hinterland. It acted as a form of welfare. But in temporarily alleviating one problem, it created other, longer-term ones. The gross national debt soared to 180% of GDP?three times more than America's and the largest within the OECD."
The Bank of Japan kept interest rates at zero for nearly six years. Since February 2007 they have stayed at 0.5%. This acts as a subsidy from individuals (who earn almost nothing from their massive savings) to banks. But raising rates would increase the government's debt obligations."
Expect to hear more about the theories of Nikolai D Kondratieff.
Actually, the Japanese had been employing enormous amounts of bad/pointless infrastructure projects for years as a means for the ruling party to keep up its votes in rural areas. That's why adding yet more money to the waste-heap did nothing to help the economy. There is a very strong case for renovating the infrastructure of the US,not just to lessen the recession, but to provide a solid basis for future economic growth.
Also, Kevin, you might note the following:
New Jobs Through National Infrastructure Investment
Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure ? its highways, bridges, roads, ports, air, and train systems ? to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.
* Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation's most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity.
This was the result of doing a 30 second Google, as McSadsack calls it. It's easily available on the Obama campaign website, and seems a considerable advance on what McCain is offering. You might want to amend your post somewhat.
The Japanese tried this infrastructure investment solution. It did not work. Too much public debt.
From this week's Economist (http://www.economist.com/finance/displaystory.cfm?story_id=12437739):
"The government's response was to spend. It forked out about ¥120 trillion between 1992 and 1999, mostly on useless construction projects in the hard-hit hinterland. It acted as a form of welfare. But in temporarily alleviating one problem, it created other, longer-term ones. The gross national debt soared to 180% of GDP?three times more than America's and the largest within the OECD."
The Bank of Japan kept interest rates at zero for nearly six years. Since February 2007 they have stayed at 0.5%. This acts as a subsidy from individuals (who earn almost nothing from their massive savings) to banks. But raising rates would increase the government's debt obligations."
Expect to hear more about the theories of Nikolai D Kondratieff.
Actually, the Japanese had been employing enormous amounts of bad/pointless infrastructure projects for years as a means for the ruling party to keep up its votes in rural areas. That's why adding yet more money to the waste-heap did nothing to help the economy. There is a very strong case for renovating the infrastructure of the US,not just to lessen the recession, but to provide a solid basis for future economic growth.
Also, Kevin, you might note the following:
New Jobs Through National Infrastructure Investment
Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure ? its highways, bridges, roads, ports, air, and train systems ? to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.
* Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation's most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity.
This was the result of doing a 30 second Google, as McSadsack calls it. It's easily available on the Obama campaign website, and seems a considerable advance on what McCain is offering. You might want to amend your post somewhat.
Sure, the fiscal stimulus is the cherry on top for public works and in this case, with the economy already inrecession, the economic effects will be almost immediate.
More important, though, is that the country has been neglecting infrastructure and "legacy works" (think national parks) for almost two decades. Bridges, airports, hiking trails, public lodges and rail projects are all much better expenditures of tax dollars (or deficit spending) than wars and tax cuts for people who don't need them.
The usual argument against infrastructure projects as fiscal stimulus is that they take too long: you have to identify projects and draw up plans first, and only then do you put people to work building stuff.
I hear there's a bridge and a pipeline in Alaska that are ready to build on day one if you elect McCain/Palin.
From the McClatchy article:
The civil engineers association gave the country a "D" on its 2005 infrastructure Report Card. It called for a $1.6 trillion five-year improvement program.
McCain and Obama haven't embraced anything as dramatic as that.
... (snip)
(Obama) wants to set up a national infrastructure investment bank to invest $60 billion over 10 years in projects to improve roads, ports and mass transit. Nearly 2 million new jobs would result, he predicts.
I had mentioned this in a tangentially related comment last week, but Felix Rohatyn & Everett Ehrlich develop the idea of this idea (though on a much greater scale than Obama seems to envision) in considerable detail here. Currently, legislation to enact such a bank is pending in both the Senate & the House. It would be nice to apply the existing Democratic majorities in those chambers to just this type of legislation.
McInsane doesn't buy into the infrastructure improvement idea simply because Obama already has. It's no-win for him, supporting government spending for infrastructure won't help him with independent voters, but he can hope that some of those voters are uninformed and can be swayed by the "big spending liberal" tag.
Unfortunately, he's probably right.
I hope that any infrastructure initiative will not be limited solely to steel-and-mortar kinds of projects, but will also tackle issues like broadband access and capacity where we are also falling behind the rest of the world (and where such failure is arguably even more critical for our future economic success). I'd also like to see some dollars thrown at strengthening our basic research capabilities.
I think we need to take care that we select that infrastructure that will serve our future needs. If we are really entering the twilight of the oil age, then investment in increasing roads, and airports capacity is wasteful. Building out rail lines and improving the long distance power distribution grid should provide more long term benefits. Of course fixing, and maintaining what we have is important as well, we don't want to lose our past infrastructure investment because of lack of maintenence. But long term benefit, with a view towards out future energy needs should be a primary consideration when it comes to selecting projects.
Other than Al Gore, Obama is the only national politician I have heard speak about the need to rebuild the USA's electrical grid, specifically to support both centralized large-scale and distributed small-scale wind and solar electricity generation. Gore has dubbed this next generation smart grid initiative the "Electranet" and suggests a role for the federal government analogous to the DARPAnet project that led to what we now call the Internet. Obama referred to this briefly in one of the debates (the first one if I recall correctly).
I hope that any infrastructure initiative will not be limited solely to steel-and-mortar kinds of projects, but will also tackle issues like broadband access and capacity where we are also falling behind the rest of the world (and where such failure is arguably even more critical for our future economic success).Posted by: Glenn
Where in the urban areas, corporations and business, and at universities and schools is this supposed deficit in broadband access? The more I hear people harp on this the more it reminds me of the "missile gap."
A significant amount of infrastructure maintenance has already been planned but has been postponed due to budget shortfalls. This is particularly true in states like California. So it would be quite possible to create useful employment fairly quickly.
The Japanese tried this infrastructure investment solution. It did not work. Too much public debt.
From this week's Economist (http://www.economist.com/finance/displaystory.cfm?story_id=12437739):
"The government's response was to spend. It forked out about ¥120 trillion between 1992 and 1999, mostly on useless construction projects in the hard-hit hinterland. It acted as a form of welfare. But in temporarily alleviating one problem, it created other, longer-term ones. The gross national debt soared to 180% of GDPthree times more than America's and the largest within the OECD."
The Bank of Japan kept interest rates at zero for nearly six years. Since February 2007 they have stayed at 0.5%. This acts as a subsidy from individuals (who earn almost nothing from their massive savings) to banks. But raising rates would increase the government's debt obligations."
Expect to hear more about the theories of Nikolai D Kondratieff.
tpx: I don't buy your argument, because Japan's infrastructure was already in good shape in the early 90s, for one thing almost everything was much newer than the corresponding American infrastructure, since they started from scratch after the war.
On the other hand, in the US we have tons of deferred maintainance, to the point where many bridges are rated as having structural deficiencies. Fixing them won't be make-work.
The Japanese infrastructure efforts have been extensively documented (in The Economist over several years for instance). What they show is (what a surprise!) bad infrastructure investment creates bad results. They were essentially spewing concrete everywhere with no overall plan.
Avoiding inflating the national debt beyond something reasonable and keeping interest rates artificially low is the lesson to be learned from the Japanese. The US cannot give a trillion borrowed dollars to Wall St., borrow another trillion for infrastructure, borrow another trillion for the military and keep interest rates low by Soviet-like decree if it wants to avoid Japan's Lost Decade. Even if Obama wins and Congress has a super majority, it is difficult to imagine America not making bad infrastructure investments.
Where in the urban areas, corporations and business, and at universities and schools is this supposed deficit in broadband access?
Well gee, if you're going to artificially define penetration however you please then, I guess I can't argue with you!
For anyone else interested in a non-artificially-defined reality, here's one article about how the US is slipping behind other countries in penetration, speed, and cost, based on the OECD study.
http://www.webpronews.com/topnews/2008/05/20/us-slips-to-15th-in-broadba...
What Joe Buck and Butch said. The Japanese invented the bridge to nowhere. The concrete lobby in Japan is the strongest in the world. Well, was.
Forty or fifty years ago, the infrastructure projects undertaken by the LDP dominated government made sense for the most part. In many ways it was a lot like rural electrification in the U.S. in the first half of the 20th Century. However, the LDP continued to use this to bolster the rural gerrymand that gave them their power long after it was difficult to find a (likely dying) rural village that needed a new bridge, community center or "dangerous" hillside covered with gunite. What little done (in comparison) in the last 15 years or so has been ill-conceived pump priming at a time when, in spite of the economic stagnation, urban development continued a pace.
Japan's next move in intensive infrastructure upgrade should be "green" technologies. The country is ripe for solar and wind power.
The Economist is pretty horrible. It's not a particularly reliable magazine anymore. It's like it's written for Tories from the 1970s. Remember, David Brooks wrote the Lexington Column a few years back.
If they haven't done so already, I wouldn't be surprised if they endorsed McCain as they endorsed Shrub twice.
For anyone else interested in a non-artificially-defined reality, here's one article about how the US is slipping behind other countries in penetration, speed, and cost, based on the OECD study. Posted by: Glenn
I read it. So? My point still stands. The parts of the population here that actually need and can economically or academically benefit from broadband have it
already. Care to point out the urban and suburban areas of the U.S. lacking in broadband to such a degree that it it causing problems?
It's a matter of fact that a good portion of broadband here and throughout the rest of the world is consumed by "entertainment" in one form or another.
If you want to get all hot and bothered about IT concerns, I'd say making sure the federal government had compatible and integrated hard- and software across departments is a bit more pressing (particularly the good folks at DHS) than worrying about whether denizens of small towns can compete in the online gaming "community."
Jeff II: The Economist is pretty horrible. ... It's like it's written for Tories from the 1970s.
It's like it's written for Tories from the 1870s.
There, fixed it for you. I can't imagine the shock to their editorial staff when they discover that Disraeli is no longer the PM.
Jeff II - as someone who lives in one of those rural areas, I can assure you that greater access to broadband is about a lot more than gaming (though gaming would be certainly be a part - but why should it not be?).
A neighbor of mine with dial-up access can't help her kids find resources on the net for school projects, research, etc. nearly as quickly or easily as their counterparts even in the small town nearby. For them, broadband isn't even offered. Is that fair?
cv is right Jeff II. Lots of fiber in major metropolitan areas, lots of dark fiber as a matter of fact. And links between major metro is also sufficient. It's the access to small towns dotted here and there. And lots of ag people have a need for good internet access, in addition to finding resources for their kids.
Regarding compatible and integrated coms between different fed agencies. We have that already. Stone tablet and chisel!
Actually, the Japanese had been employing enormous amounts of bad/pointless infrastructure projects for years as a means for the ruling party to keep up its votes in rural areas. That's why adding yet more money to the waste-heap did nothing to help the economy. There is a very strong case for renovating the infrastructure of the US,not just to lessen the recession, but to provide a solid basis for future economic growth.
Also, Kevin, you might note the following:
New Jobs Through National Infrastructure Investment
Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure its highways, bridges, roads, ports, air, and train systems to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.
* Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation's most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity.
This was the result of doing a 30 second Google, as McSadsack calls it. It's easily available on the Obama campaign website, and seems a considerable advance on what McCain is offering. You might want to amend your post somewhat.
Man...that money we poured into Iraq sure looks good now.
The fact that most Republicans have been proven to HATE Arabs and Muslims...their attitude towards Obama as proof, must really make them look like they were swindled.
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