Crumbling Infrastructure

Here is a case study of old crumbling dams.  If they break down, then the flooding will start.   A similar issue arises for our rundown highways and bridges.  This friday I will be at Brookings for a conference on state and local investment choices.   My paper with David Levinson focuses on how to encourage states to direct more resources to investing in road and bridge maintenance.   When I was in Beijing in fall 2009, I was struck by how new and shiny were their airport, highways and their subway system.   Thomas Friedman writes pieces contrasting JFK airport with its counterparts in developing countries.   We can agree that our infrastructure needs a “makeover” but who pays for it?  How much will the makeover cost?  How much safer will be from such a makeover?     Is our “old infrastructure” a cause or an effect of our nation’s current malaise?

Author: Matthew E. Kahn

Professor of Economics at UCLA.

12 thoughts on “Crumbling Infrastructure”

  1. Is our “old infrastructure” a cause or an effect of our nation’s current malaise?

    I think its an indicator.

    And out here, we seemingly weekly read about a water main break nearby. I’m not sure, but I would guess this has negative effects. I think the ASCE agrees with me.

  2. Indeed, an indicator. And all we have to do to pay for the required renewal is to stop with the wars of choice in Afghanistan and Iraq, which my counter tells me are up to $1.1 trillion in direct costs since 2001. OK, the original excursion into Afghanistan wasn’t a war of choice, but through fecklessness and stupidity it became one in fairly short order.

  3. Well, obviously it’s the union cartels and environmentalists making things so damn expensive. That, and the government should spend other peoples money. It should spend its own.

  4. Highways and bridges are in about the best shape they’ve been in 20 years. Which is not to say they couldn’t have been in better shape 20 years ago.

  5. We the people via the federal and state governments do a whole bunch of really valuable things such as copyright, negotiate treaties with other countries, protect investments via incorporation and license the radio spectrum to name a few. We ought to charge money for these (maybe something like the market value) and spend the money on stuff that helps us provide these services, things like infrastructure. Just a thought.

  6. Michael, it seems like that framing intends to focus on specific things the government does that create a specific value. Yet couldn’t the frame expand to *everything* the government does – in that such things have been determined by some portion of the electorate to create value, however diffuse or difficult to quantify – such as schools or libraries?

    Thus, the “charging” of money for such things is taxation; the “fee” for doing what a democracy wants done.

  7. I’m a green infrastructure guy, and one of the benefits I relate is the shadowing of pavement by trees prolongs repaving cycles on roads. Neglect of tree canopy leads to all sorts of quantified outcomes: increased stormwater flow, increased WWTP costs, increased urban heat island which results in greater conditioning costs and higher smog impacts (from VOCs outgassed from cars and other sources mixing with NOx in high temps), and so on.

    One would think an intrepid economist who has worked on the greenness of cities would look at failing infrastructure and come up with some model that expresses a range of costs from crumbling gray infrastructure. And how that negatively impacts a city’s greenness. And whether regular periodic maintenance is a cost or a benefit. Surely the ASCE is looking for justification for such maintenance, as annually they issue a report decrying the poor state of our gray infra….

  8. Too bad we never got that infrastructure bank, eh?

    But as Politico points out, Republicans “weren’t very bipartisan” when Obama first announced his $50 billion infrastructure plan last month. Republican Senator Mitch McConnell then said:

    “After the administration pledged that a trillion dollars in borrowed stimulus money would create 4 million jobs and keep the unemployment rate under 8 percent … the administration wants to do it again, this time with higher taxes for even more new spending.”

    In his New York Times column yesterday, Paul Krugman explains once again that the entire concept of big government spending—on infrastructure or otherwise—is a “myth”:

    There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.

    But no one expects Republicans to play ball on the eve of elections, and Joan Walsh at Salon wonders why Obama even bothers to try:

    Republicans are rejecting infrastructure spending because they think it’s good politics to do so right now, and the fact that such spending creates jobs as well as builds or modernizes crucial public projects doesn’t seem to matter. In fact, the job-creation aspect of Obama’s infrastructure plans probably counts against it, as Republicans seem determined to block any effort to put Americans back to work if it could benefit Democrats politically.

    Whether or not such efforts help Republicans in next month’s elections, they seem to ignore the wishes of the American people. According to the White House report released yesterday (prepared by the Treasury Department and the Council of Economic Advisers), the public favors infrastructure by a landslide…

    Yep. Too bad. Too darn bad.

  9. “There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.”

    Translation: Sure, bleeding will cure your anemia, the problem is that we just stuck a needle in your vein, rather than slashing your throat.

    Absent here is any notion that there are limits to how far we can afford to go into debt as a nation. You wanted infrastructure? Maybe you shouldn’t have insisted on us using up our borrowing power on OTHER stuff. Not that the Republicans were much better, with their wars. It took both parties to bring this country down.

    The infrastructure isn’t going to get fixed, because our political class is firmly in “after me, the deluge” mode. They see the end coming, and long term planning just isn’t worth it. It’s time to plump up the overseas bank accounts, and party down until the collapse, while making excuses so that nobody else gets to do the partying down in their place.

  10. The American political economy has a parasitic infection. Kill the parasite.

    It is not possible to sustain a stable economy, and currency, without investment, including substantial public investment in education and infrastructure, and without taxing away most economic rents.

    A top personal income tax rate of 70% (on household incomes over $1,000,000), confiscatory inheritance taxes on estates over $5,000,000, corporate taxes that corporations actually had to pay, including a 50% tax on corporate income — such policies would cure the American malaise in short order. What we are doing instead — allowing the worst mega-rich and giant business corporations to dominate government and culture, while deriving their incomes from a scam-economy of fraud, deceit, monopoly capitalism, environmental degradation and general disinvestment is taking the express route to ruin.

  11. Any commonality of view between myself and Brett is a purely coincidental by-product of living in the same plane of physical reality.

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