Big Issue #3 – Investing in our Infrastructure

As a very positive sign, the President-elect has emphasized the need to reinvest in our infrastructure which is in need of repair. This is consistent with the plans that his opponent had envisioned and with policies that the current President has pleaded with Congress to do. It should be noted that this bipartisan desire echoes testimony by the leaders of the US Chamber of Commerce and Labor Unions who beseeched Congress to invest more in our infrastructure, and is reinforced by former Director of Transportation Ray LaHood and former PA Governor Ed Rendell.

These investments pay huge dividends beyond the repair, upgrade or rebuilding of our deteriorated assets of roads, highway bridges, railway bridges and lines, power grids, airports, cabling, etc. These investments create jobs. This is a key reason for Labor Union leaders backing the investment.

This is how we used to invest in our country, with government investment partnering with private investment to do things private investors could not do alone or where the ROI was insufficient for one entity. This history is well captured in a book by Thomas Friedman and Michael Mandelbaum called “That Used to be Us: How America fell behind in the World it Created and How it can come back.” A new book by Jacob Hacker and Paul Pierson called “American Amnesia: How the War on Government led us to forget what made America Prosper” echoes this theme. We have forgotten what made us great.

Yet, we should not lose sight of the reluctance of Congress to part with the money because of our debt. Former Speaker of the House John Boehner greased the skids by getting some Highway Trust funding before he retired at the end of October 2015, but that is not near enough. An economist whose name escapes me said in an interview, borrowing to invest in an asset is different from borrowing to pay for operations and with interest rates so low, we are letting the ideal time pass to do this.

We should be concerned with our debt, but like corporations, while cutting in some areas are needed, we need to invest in our deteriorated assets. This is an area where some obvious funding could be created and aligned through an increase to our comparatively low gas tax. By increasing the federal gas tax by 35 cents per gallon, per the nonpartisan The Concord Coalition, it would raise $469 billion in revenue over ten years. Plus, it would provide further incentive to purchase better miles per gallon vehicles, which will help the environment.

Investing in our infrastructure is needed and we should begin discussions early in the term of our next President. It is long overdue and will get even more people back to work, especially in areas where underemployment is higher.

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9 thoughts on “Big Issue #3 – Investing in our Infrastructure

    • Hugh, it may seem small, but we have a number of railway bridges that take 500 trains a day and it will not be surprising if one fails. Congress would then be all in a dither as to how this could happen. Then we have the highway bridges like the one that fell in Minnesota a few years ago. The Stimulus plan fixed one in NC just like it and Rendell said they fixed a number of them in PA, but have a lot left to go.

      One of my favorite examples is the Army Corp of Engineers said the New Orleans’ levee systems would breech with a direct hurricane hit a few years before Katrina. Nothing was done and we all know what happened.

      Keith

  1. Dear Keith,

    This investment is long past due. We need to be competitive in a global world and this means updating our ports and other modes of transportation. Then there has been the recent news of widespread floods which could be prevented or the damage mitigated in the future by better infrastructure planning. In short, spending monies wisely for updating our infrastructure is a crucial for our economic development.

    Ciao, Gronda

    • Gronda, totally agree. The ports need to be deepened to take in the larger ships that will come through the bigger Panama Canal. People forget that we did not win the 2016 Summer Olympics because our infrastructure was outdated, especially airports. Keith

  2. Note to Readers: How we go about this is important. It should not be based solely on tax credits, nor should it be solely government funded and managed. There are elegant combinations of both. A bad case study are these so called Lexus Lanes where a private contractor builds a toll road where it reaps income for years. Often, these added lanes only delay a problem and there is a mismatch on the financial period. A young girl testified against one such plan in my city, saying we will be paying for this for fifty years, by which time you will all be dead speaking to City Council.

    • Lisa, thanks. That was the gist of my add on Note to Readers. Privatizing will focus the priorities on what the companies want to do and how they want to do it. To me, there is a collaboration of efforts that is needed blending federal, state, local money with private dollars.

  3. The only sure thing about the next 4 years is that we can expect the unexpected. Perhaps because he is a Republican, he will actually be able to get things done that Obama only dreamed of. But, as you point out, will he do them the right way or the worst way? Time will tell.

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