The Pharaohs Did It. Jefferson Did It. Both Roosevelts and Even Ike Did It.
Spent on infrastructure that is. The Pharaohs maybe don't count with the pyramids, but Thomas Jefferson built canals. Teddy R. was into power generation, and FDR rebuilt all of America. Even Herbert Hoover saw the benefits of government-backed public works projects and oversaw the construction of some 360 public buildings. But he signed the Smoot Hawley tariff, which choked off world trade, and that's his legacy. Ike oversaw a huge expansion in the nation's highway system. Along the way, jobs were created and tax revenues generated.
Whoever the new President is will be faced with challenges, to put it mildly. Mending the economy and nurturing a devastated financial system are long-term issues (opportunities), but almost immediately there will be a call for an additional stimulus package to be introduced. The Democrat-controlled Congress will opt for extension of unemployment benefits and expansion of the food stamp program at the least, but most observers feel an infrastructure-rebuild program will be front and center.
The idea of cutting checks and passing them out has never really worked, and the thought of resurrecting a program like that has receded into the background. Some think an infrastructure proposal of up to $300 billion will be on the agenda. It wouldn't prevent a recession, but if enacted quickly it could go a long way towards mitigating the depth of whatever recession we are in. Moody's Economy.com was mentioned in the Wall Street Journal as figuring that a program of this size could limit the unemployment rate to 7.7% in 2010 versus their fear that the rate could go to 8.9% without a spending package.
It's not as if a major program isn't needed. The American Society of Civil Engineers reckons there are 596,842 bridges in the U.S (how do you count all of those?), and that 26% of them are in serious need of repair. They figure close to $10 billion a year for 20 years is needed to avoid the potential for another disaster like the Minnesota bridge that collapsed in August 2007.
The same outfit -- ASCE -- totaled a need of $94 billion a year for a lot of years to repair and upgrade the highway system. This is before the planned expansion of 80% to the highway system by 2015.
The Engineers gave wastewater management a "D" grade (I know what they look like on a report card!) and claimed that $11 billion a year is needed. One only has to think of the horrific tragedy of New Orleans to realize that waterways, flood control systems, and dams need upgrading. There are 257 locks on 12,000 miles of inland waterways, and the Engineers figure 50% of them are structurally obsolete. There are some 3500 dams that are labeled unsafe as well.
Right now, about 75% of infrastructure spending is a state or local obligation. Governors Schwarzenegger and Rendell and Mayor Mike Bloomberg announced this past January a lobbying group called Building America's Future to push for federal investment in America's infrastructure. There will be a political donnybrook of gargantuan proportions, but the needs are unavoidable.
There will be many demands on the new administration. Some sort of universal health care might take priority in the long haul. But a stimulus package is probably on the front burner, and if it proves to be a one-off project, the decaying infrastructure doesn't go away. There could be a lot of ways to invest in this, and beyond the obvious are firms that could aid in the privatization of roads and airports, or underwriters of industrial revenue bonds which we haven't seen in a while.
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High Speed Rail System would be the first infrastructure I would undertake.
We are one of the few industrial countries that still have a railway system that has not changed much since the 1850's, it is time to modernize it so our trains can travel @ 300 miles per hour, this would bring us into the twenty first century and open up an entire world of new possibilities.
Actually, the railroad industry in the US has experienced a renaissance over the past decade, but it's all about transporting freight and not passengers. Our rail system infrastructure for transporting freight is very good and much better than in Europe, for example.
To me, "infrastructure" means a whole lot more than just "public spending for physical things." I would take this line of reasoning one step further: apply public policy to encourage America's own mothballed industrial infrastructure to be put back into service. Make it attractive to produce the things that are needed by "one factory" in another factory that's close-by ... not 10,000 miles away. There are lots of ways to do that, and as more money (and goods) starts to flow in close geographic proximity, it will once more be possible to afford infrastructure improvements without relying totally upon public money to do it.
Henry Ford wisely observed that the people who worked in his factories had to make enough money to allow them to buy Ford cars ... which they did. He also knew that he had to pay enough for materials to allow his myriad of suppliers to prosper, too. The rising tide promptly lifted all boats. Now, Henry was no saint and his factories were no heavenly-home, but the principle is sound.
"The public" is NOT, and can never be, "an endless wellspring of cash." It feeds from the economy that it serves. That economy feeds from strong domestic(!) trade. International trade feeds from that... and it is now "trade among equals." We've neglected infrastructure because we forgot where money comes from.
Mothballed industrial infrastructure???? What would that be? Cobweb covered sleeping beauty factories waiting for the return of prince charming workers?
I am sorry to say, but that's not how it works. The industries that went away did so for very obvious reasons (like cheaper labor). In most cases those reasons are still valid and those industries will not return. You might not like that but reality won't care. One could, of course, tax the heck out of foreign products to make home grown stuff competitive. The net result would be that all these products would get insanely more expensive and people would be able to afford even less.
I don't understand the Henry Ford comments. While the wages of factory workers certainly increased during boom times in the first part of the 1900's, it usually resulted in higher prices for products, in this case cars, which made them more expensive, often too expensive, for those who didn't work in the factory to afford, particularly those in the south and western portions of the United States. This was why folks from the South and West have traditionally supported free trade; they don't want to be at the mercy of the high prices of products from the northern factories. Eventually, wages and benefits became so high in these factories, that companies had to move operations just to stay competitive.
"...a need of $94 billion a year for a lot of years to repair and upgrade the highway system. This is before the planned expansion of 80% to the highway system by 2015."
I believe a high speed rail system along the Interstate highway rights-of-way is the best long term solution to our transport problems. Combine this with a hub and spoke Wal-Mart type local distribution system and a way to easily dock freight and passenger vehicles to the rail system, make it electric, build a battery storage system along the rails and solar panels to charge the batteries. Think of the jobs in R&D, development engineering, software (for controls and scheduling), manufacturing, construction, management.
Think of the efficiency, the removal of any dependence on oil, the easy travel, the more difficult terrorist targets (vs airplanes). I see no negatives to this except the effect on existing infrastructure such as trucking companies, airlines, oil companies, auto companies. And what an example of good environmental impact to the rest of the world!
We have thousands of miles of rail-lines most of which are used for freight service only. Unfortunately, locomotives cannot use many of the steep grades that are found throughout the Interstate Highway system. High-speed right-of-way is very expensive. Many long-haul trucks are unfortunately on the road because there is not enough long-haul rail capacity to handle them.
However, if we started moving our industrial production back to our own shores, the amount of "long haul" transportation would be reduced naturally because everything in our world would no longer be coming from the docks. If properly encouraged to do so, suppliers would naturally tend to locate themselves in close proximity to the factories that they served. Much of our rail network was originally devised around this model, which prevailed until the mid-20th century.
"If properly encouraged to do so, suppliers would naturally tend to locate themselves in close proximity to the factories that they served."
I can only hope for you that you are not in business or I will have to assume that your primary goal is to go bankrupt. Since I happen to work for a "supplier" I have to tell you that we make about 1% of our sales with customers within 50 miles, 50% with customers located in the US and the remainder with worldwide sales. According to your "business model" we would have to reduce our sales to one percent in order to be "local". That would make especially sense since the most critical components for our industry are being made in Asia. And some are being made ten miles from us, then they are being shipped to Asia for partial assembly and then they come back to us. I suppose we should demand from our suppliers to stop this and manufacture everything locally? Yeah, that would really work. In fairyland, maybe.
>> High-speed right-of-way is very expensive.
Most interstate highways in the United States cost just over $1 million (1996 $) per mile to build http://www
>> Locomotives cannot use many of the steep grades that are found throughout the Interstate Highway system.
Think broader - how can we adapt? Smaller lengths of trains. Slower speeds up-hill. Lighter carbon-fiber or nano-tube materials for transport systems. Regenerative systems that recharge batteries on down-hill slopes.
Best value in an infrastructure project?
Mass transit.
Make it so you don't even have to own a car to get around. Let GM and Ford go out of their misery. Tell Toyota to pack up and go home. Say goodbye to sky-high oil company profits and a massive transfer of weath from the US to the middle east.
Let me throw away my car and never have to make payments, shop for insurance, pay for reapirs or drive drive clogged freeways again.
I'll be happy.
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