America’s Infrastructure Problems — Why We Should Invest [View all]

[liberal N proud]

This post is focus on a 2 part story about America's Infrastructure. Part 1 can be found here: http://www.mbtmag.com/blogs/2014/04/just-how-bad-are-america%E2%80%99s-infrastructure-problems


The infrastructure problems are increasing business costs and it will only get worse. Whether it is missing a delivery promise because of a freeway jam, losing water pressure in a food plant, loss of electricity during a blackout, or being fined by a government agency, infrastructure problems will continue to increase business costs and make business less competitive. They will also increase consumer costs through user fees and service bills.



Our current strategy seems to be to use our limited resources to react when the bridge falls, the water main explodes, or the sewer overflow dumps raw sewage into the city’s river — and then depend on our emergency forces to get us out of the jam with around-the-clock TV coverage. But, dealing with these kinds of problems during an emergency is the most expensive solution and most often there is no budget and the local government has to rely on deficit spending.



Besides reducing reactive spending, another very good reason to consider a comprehensive plan to deal with the infrastructure problems is that it would create a lot of jobs in both construction and manufacturing.



What Does the Government Propose?



After several budget proposals by the Obama administration that never got traction, the American Jobs Act was submitted in Sept 2011. After two years of political wrangling by both parties, the bill was finally passed by Congress in March 2013 at a total cost of $450 billion. Unfortunately this wasn’t really an infrastructure, transportation, or jobs bill. The need for infrastructure spending was trumped by politics and only $60 billion (or 13 percent) of the bill went to infrastructure problems. The other $390 billion was appropriated for unemployment benefits (13 percent), payroll tax reductions (54 percent), and aid to state and local government (19 percent).



The majority of the $60 billion for infrastructure was dedicated to loans and grants and for the development of an infrastructure bank. Only $27 billion of the appropriation was dedicated to transportation infrastructure. And, if you take out the monies for high speed rail, Amtrak, and airport improvement, the budget is further reduced to $19 billion.


http://www.mbtmag.com/blogs/2014/04/america%E2%80%99s-infrastructure-problems-part-2-%E2%80%94-why-we-should-invest?et_cid=3882646&et_rid=652347563&type=image