Engineers Say $2.2 Trillion Needed For Nation’s Infrastructure. Stop Wasting Precious Money On Wall Street.Friday, January 30th, 2009
The American Society of Civil Engineers have estimated that it will take $2.2 trillion over the next five years just to provide adequate infrastructures. In their 2009 annual report, the ASCE gives the nation’s infrastructure an overall grade of “D.”
The report card lists 15 categories, from Aviation to Wastewater, with a brief description of the problems in each category.
In Energy the engineers comment that “Public and government opposition and difficulty in the permitting process are restricting much needed modernization. Projected electric utility investment needs could be as much as $1.5 trillion by 2030.”
America’s drinking water facilities face an annual $11 billion shortfall to replace ageing facilities “that are near the end of their useful life.” The average tow barge can carry the equivalent of 870 tractor trailer loads yet of the 257 inland waterway locks still in use 30 were built in the 1800s and 92 are more than 60 years old. Expected life of a lock is 50 years. Cost to replace locks is $125 billion. For the complete list of categories, and comments, look here.
These kinds of projects are what need to be funded, and these are the projects that worldwide wealth will flock to fund by purchasing Treasuries. The US government should be selling longer dated maturities now, of the 20 and 30 year variety, because interest rates are at historic lows due to the global recession.
Great wealth is represented not by stock holdings, but by fixed income holdings. By the credit markets, in other words. Wealth is primarily interested in safety. It is looking for secure investments that offer return of principal and consistent cash flow, or income.
The current financial meltdown of Wall Street came about because Wall Street, lacking enough of these types of investments, basically manufactured them (sometimes synthetically) from mortgages that were given phony AAA ratings. This entire straw house came about because America was not investing in itself. It was not building infrastructure. There was a “deficit” of this kind of investment for wealth to fund. So Wall Street made something up for wealth to buy instead.
Unfortunately, the Wall Street collapse and the huge sums being tossed about in bailout money threatens to cripple America’s ability to fund infrastructure. Failure to fund infrastructure fueled the collapse, which now threatens our ability to fund infrastructure. A vicious circle.
Breaking this circle is why President Obama must walk away from shovelling trillions of taxpayer dollars into Wall Street. Not only will this be ethically wrong because insolvent banks and their investors should be the ones to bear the losses, but it will unnecessarily add to America’s debt when so many worthwhile projects need funding, and global wealth desires these safe investments now more than ever.
Let’s avoid doing what was done during the Great Depression, where according to then Great Britain central banker Montagu Norman, “..we collected money from a lot of poor devils and gave it over to the four winds.”
PS. The Montagu Norman quote was lifted from this week’s New Yorker review by John Lanchester of Liaquat Ahmed’s new book “Lords of Finance.” It’s a great read.
Beezer’s email address is firstname.lastname@example.org