Streams

30 Issues: Borrowing for Infrastructure

Thursday, September 27, 2012

30 Issues in 30 Days is our election year series on the important issues facing the country this election year. Today: The necessity of borrowing to initiate and maintain essential infrastructure projects. Visit the 30 Issue home page for all the conversations.

 

Open Prep: Questions, Articles, and Links to Get You Started

Key Questions

 

  • Should the government trade infrastructure for debt?
  • What are the major ongoing infrastructure projects across America?
  • Can government projects stimulate job growth? 

What are your key questions on this topic? Post them below and get the conversation going!

 

Guests

Links

ASCE's Report Card on America's infrastructure

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Comments [30]

Jeremy from NYC

Assuming that we should invest much more resources into infrastructure overall, I am interested in more debate about good vs. not so good investments. Specifically productivity around dimensions of productivity, social and environmental impact. Highways and bridges are big money but can they compete with railway, wind farms and rural broadband in ROI over 50 - 100 years?

Sep. 27 2012 11:36 PM
amalgam from NYC by day, NJ by night

Besides developing human capital (education, job skills, etc.), improving and building infrastructure is the most important investments the United States can do for its economy, workforce and environment.

This is where public-private partnerships are worthwhile for all involved. One of the best options is to create an Infrastructure Bank that accepts investment funds from numerous sources, like the federal govt., local govt.s, corporations, bond sales, etc.

For instance:

Infrastructure Bank: Fixing How We Fix Roads
NEW YORK (CNNMoney) -- It sounds like the latest Apple product, but it has the power to create far more jobs with little government money...
http://money.cnn.com/2011/09/07/news/economy/jobs_infrastructure/index.htm

There is simply no excuse to oppose infrastructure improvement in the U.S.

Finally, I will take this time to again lambaste my Gov., Gov. Christie, for his foolish, short-sighted, economically harmful decision to shut down the ARC Tunnel project, something that is sorely needed and would have improved the productivity and economy of the NYC metro area. productivity/economy

Sep. 27 2012 04:02 PM
Margaret from NYC

Unfortunately, I missed this show - I have never understood why the government budget does not differentiate between day-to-day expenses and long-term capital projects. It is 100% appropriate and legitimate to borrow for infrastructure projects that will last for years and promote economic growth. I think most people could grasp this, since businesses and households often borrow for large, long-term investments like a new factory, a house or an education. It's when you are borrowing to keep the lights on day to day that you are getting into trouble. But "all government debt is bad" is an unhelpful, short-sighted attitude.

Sep. 27 2012 03:07 PM
Jackie

This country needs to go to war against somebody. There are simply too many unemployed people here. The government and business has nothing for them to do, and they might get restless. The country, frankly, needs a war to occupy (and thin out) those ranks. Will happen soon.

Sep. 27 2012 01:12 PM
Imports should pay their share for infrastructure from Are China & India freeriding on our infrastructure ?


Imports should pay for their share of infrastructure.

When goods are imported from abroad they still use
the US's infrastructure : ports, roads, rails, bridges,
tunnels, information and energy - but they do not pay
for their share.

Some might even argue that imports add substantial additional
costs to keep the sea lanes open (eg. some defense spending).

This is not a problem when trade is balanced, but it is when
countries continually run a substantial trade surplus.
Their surplus goods FREE-RIDE on our infrastructure.

Proposal : A 20 % tax on all bilateral trade SURPLUSES
paid by the country with the surplus to the
country with the bilateral deficit to pay
for the free ride on their infrastructure.

For most countries - bilaterally - the payment will be
minimal. For a few who abusively run continual surpluses,
it will level the playing field.

If countries don't pay their due, a unilateral punitive
VAT of 3 times the rate can be paid in subequent years until
the difference is paid with interest.

Sep. 27 2012 12:40 PM

John from NYC: if you take the accepted figure of $130 billion to build the interstate system as of 1991 and inflate it from 1970, when the most construction was going on the "cost in today's dollars" using the Bureau of Labor Statistics inflation calculator is $772 billion, almost twice what you assert. If you use 1960 as your base it's more than $1 trillion. It's fine to make an argument, but let's start with accurate figures.

Sep. 27 2012 11:41 AM
Jim

@Jack Jackson

Yes, please go on. And tell us all the reasons why Obama is not responsible for his own record.

Sep. 27 2012 11:39 AM
Lisa from Staten Island

I live on staten island and because of high tolls (mta $13.00 and pa $12.00) I weigh very heavily if I will leave this island because of the high cost to return. I do not believe these high bridge tolls are the result of infrastructure improvements but salaries. I think the time has come when we need to address the cutting of salaries that are dependent on tax revenue not whether taxes should be lowered or raised. A tax revenue salary is by definition a public employee and was not meant to be a high paying with benefits that bankrupt the people that pay the salary. It would be crazy if a business owner sacraficed his financial security to pay his employees, he/she would let people go and cut costs. The tax payer is the owner, we want the services but cannot afford the employees or their benefits.

Sep. 27 2012 11:36 AM
Jack Jackson from Central New Jersey

@Jim -
"We squandered an opportunity to turn the Great Recession into a new era of public projects by bailing out bankers. And that's all Romney's fault."

Romney's fault? No. The GOP's fault and Grover Norquist, yes. The GOP did what ever it could to make certain that the path to recovery and full employment were blunted. Slow-walked stimulus approval; killed Cap and Trade; killed high speed rail; killed Vet's job bill; no action on BHO's JOB initiatives. Do I need to go on?

Sep. 27 2012 11:35 AM
Anil Nigam from Stamford

I believe that a majority of Americans take the infrastructure for granted - it's there, it will always be there, it will happen magically. There is some serious educating that needs to be done to bring us at par with Europe and even parts of South East Asia.

Sep. 27 2012 11:33 AM
jgarbuz from Queens

It's still cheaper and better for the economy and the infrastructure if we all order our goods ONLINE and let a few UPS and FedEx trucks deliver them, than for all of us to to all get into our cars and ride out to huge shopping malls alongside those highways.

Sep. 27 2012 11:32 AM
scott from soho

There goes Brian praising China again. They have great airports, unfortunately they also have a billion people living under a tyrannical government and many are still crapping into holes in their backyards.

The problem is that our taxes are being misspent by our government officials. We don't get the value we should with regard to government spending. We overpay for just about everything when the government is involved. We pay a gold rate for education and get a lead result. We pay for public roads and get pothole littered highways. No one should be asked to pay more in taxes until the government can demonstrate it is spending our money wisely.

Sep. 27 2012 11:31 AM
jgarbuz from Queens

So, come the growth rate in the US, as anemic as it is, is still larger now than in Europe or in Japan with all their high speed rail and all? Europe is back in recession. Their unemployment rates are higher than ours.

Sep. 27 2012 11:26 AM

In France most new superhighways are built by private companies who collect substantial tolls for 20 or more years as they operate them and recover the capital investment and make a profit. They are superb.
Where do we draw the line between "social overhead capital" that the government pays for outright and others like French highways the public pays for gradually as they use them?

Sep. 27 2012 11:26 AM
Jeff Pappas from Dumbo

Well Infrastructure could be funded by US Govt Bonds. A new WPA could also put Artists to work documenting like in the 1930's. We could also have a progressive tax on luxury cars.
Also by cutting our insane War Budjet.

Sep. 27 2012 11:25 AM
Truth & Beauty from Brooklyn

This guest is a politician in the making. Unable to answer a direct question.

By the way, before we invest in NEW infrastructure, we should make sure that our CURRENT infrastructure is in good shape. It's ridiculous to invest in new infrastructure if we don't take care of what we've already got. That would mean that the new infrastructure will fall apart from neglect in a few years as well.

A perfect example is the MTA, which has spent quite a bit redoing various subway stations, but after the initial work, they then remain neglected and descend into their original disgusting condition.

Part of any infrastructure project is UPKEEP (as well, of course, as proper planning). If we are not willing to do that, then we shouldn't be building any more.

Sep. 27 2012 11:24 AM
Jim

So to sum it up... Our infrastructure is aging and failing. We squandered an opportunity to turn the Great Recession into a new era of public projects by bailing out bankers. And that's all Romney's fault. Oh WNYC... where have you gone.

Sep. 27 2012 11:24 AM
John A.

I could use less pleading and more facts. How much more than what is paid is needed? Express as a percentage. I'm expecting a 150% increase.
-
Not paying necessary expenses is a fools bank loan.

Sep. 27 2012 11:23 AM
rita lasar from manhattan

arent airmarks investing in infrastructure

Sep. 27 2012 11:20 AM
Jack Jackson from Central New Jersey

@JoeCarrao -

What the what?? All societies need some form of infrastructure regardless of their form of economic organization. America's emphasis for education and intelligent use of the commonweal are what sets us ahead of other countries. Too much money in the hands of too few is setting us all back. Reagan and Bush gave personal thrift a knuckle sandwich 30 years ago. It's up to us to make it worthwhile for the private citizen to save money.

For BL - Consider yourself absolved for misusing that "You didn't build that." quote a couple weeks back.

Sep. 27 2012 11:19 AM
Timothy from montclair, nj

Brian,
Please inquire: It was my understanding that the money for infrastructure was allocated to the state for the states to decide what to build. The states then decided to use the money for to pay current employees which delayed the municipal jobs decline witch we saw in 2011 and early 2012.

Sep. 27 2012 11:18 AM
jgarbuz from Queens

Who is going to build this "infrastructure," the aging baby boomers? Illegal immigrants? The 50 million aborted babies? Who's got a strong enough back to do this "shovel ready" back breaking work? Most of this "infrastructure" stuff is nonsense. What we should do is reinstitute the draft, and build up the youth and prepare them for work or for battle or for infrastructure work.

Sep. 27 2012 11:16 AM
Ken from Bronx

Infrastructure needs to mean more than things made out of concrete.

We have thousands of unemployed IT professionals. Why are they not giving every government agency a modern IT system and website?

How come when you deal with a government office, they only take faxes, they can't e-mail you ANYTHING, and the information you need to comply with regulations is not on the web? And they close at 4:30PM?

Why are we not building Internet Access to rural and poor areas?

IT spending will create WHITE COLLAR JOBS. I respect the hard-hats, but they are not the only ones who build useful things.

Sep. 27 2012 11:16 AM
Allen from NYC

"Divisiveness" is the key word, with a reactionary, uninformed electorate who will respond to a four word audio clip from the President( "You didnt build that!") rather than making the most cursory review of the issues at hand.

Sep. 27 2012 11:13 AM
John from NYC

I am all for “infrastructure improvements.” But where are they? Where is our new Tappan Zee Bridge?

The Interstate Highway System cost $425 billion in today’s dollars.

That means the $800 billion “Stimulus” could have paid for almost two totally new Interstate Highway Systems. Where are they? Is there some secret road system just for elite government officials, like the one they used to have in the Soviet Union, that I don’t know about????

On top of that, the federal gasoline tax collects $28 billion per year, enough for a new Interstate Highway System every 15 years. Are they keeping those secret somewhere also?

Then we are told that the $800 billion “Stimulus” went to the states to cover budget shortfalls. THAT IS NOT WHAT THE LEGISLATION AUTHORIZED. If I misspent $100,000 of my company’s money I would go to jail. But the administration can misappropriate nearly $1 trillion, and no one says boo????

The “rule of law” is gone? The administration just rules by fiat?????

Obama is the President! He is running against a Washington that “Will not invest in infrastructure.” We did!!!! Twice!!!! Plus every 15 years!!!! How many times are we supposed to pay for something we are not getting?

Sep. 27 2012 11:12 AM

Ps I noticed Christie had no problem expanding the turnpike in south jersey. i guess that’s where his vote come from.

Sep. 27 2012 11:10 AM

I never thought the quote was taken out of context but the premise is that government set up a system that allowed buisness to grow. Capitalism caused the need for infrastructure, not the other way around.

Sep. 27 2012 11:02 AM
Jim B

In light of today's news about the growing financial instability in Europe, does large investment in infrastructure become more important as an antidote to the effects of a contracting European economy?

Sep. 27 2012 10:55 AM
RUCB_Alum from Central New Jersey

Would you borrow the money to put a new roof on the house? If you were creditworthy, you certainly would!

Infrastructure projects that America needs to spend money on in order to 'make us better off'...

MUST DO's
-Safety of our roads and bridges
-Water, gas, electricity and data delivery
-FASTER Broadband cable to ALL HOMES

Ought to Do's
-High speed rail network between cities of 2M+ population

Three of these projects need a reliable source of domestic steel to keep as much of the production on our shores.

Congress needs to get to work but their shortsightedness on tax increases is handcuffing the effort.

Sep. 27 2012 10:36 AM

Infrastructure, education and healthcare spending are unavoidable keys to modernity.
The problem, with Christie killing the tunnel btw NY and NJ, I have is it was so short side and just to prove some “I’m a tough guy” point.
Also we all know that the tunnel will be built one day, after commuters and truckers have spent needless hours waiting to cross the river wasting productivity and money. Plus it will be more expensive tomorrow.
Short sided Christie could have reduced unemployment during the great depression.
He traded that to be a GOP hero by acting like this was a tunnel to nowhere!

Sep. 27 2012 10:29 AM

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