Tag Archives: infrastructure

Defining Infrastructure

A few days ago, Talking Points Memo ran a story about Republicans’ assault on Biden’s infrastructure bill. That bill is extremely popular, even with the GOP base, so the party’s determination to oppose it had to be something other than “hell no, don’t fill those chuckholes or reinforce the electrical grid…”

According to the story, they’ve chosen to defend their opposition by arguing that the bill improperly defines the term “infrastructure.”

“You look at this bill, the $2 trillion in the bill that, only about 5 to 7 percent of it is actual roads and bridges and ports and things that you and I would say is real infrastructure and that we tried to get passed under the last administration with President Trump,” former Office of Management and Budget Director Russell Vought said recently on Fox News radio. 

That statistic is particularly misleading, as it doesn’t count even things like rail and water systems — improvements that fall into the traditional infrastructure bucket. 

Republicans charge that expenditures for broadband and green energy, among other provisions of the bill, aren’t infrastructure.

That argument prompted me to look at some of the academic literature. It turns out that there aren’t many publications dealing with the definition of infrastructure, although there’s more than I ever imagined on the economics involved–the returns on investment, the pros and cons of “public-private partnerships,” and various aspects of construction. But there was some, and it was enlightening.

For example, a number of scholars use the term “social overhead capital.” It evidently grew out of  Samuelson’s theory of public goods; Samuelson understood infrastructure to be  investments by the state that are a precondition for the successful development of the private sector– the basic services without which primary, secondary and tertiary types of production activities cannot function.

In other words, infrastructure is a support system, a floor built by government, that allows businesses and individuals to be productive. That certainly includes roads, bridges, and other elements of our transportation requirements. It also includes technology we need in order to communicate–hence broadband–and the need to keep the lights on–hence the electrical grid. It rather obviously includes water and sewers.

But these days, what constitutes that supportive floor has also come to include social infrastructure–services as well as brick and mortar assets. Social infrastructure includes educational institutions, libraries, parks…It definitely includes police and fire protection, courts of law, garbage collection and other municipal services.  In saner countries, it includes healthcare and a menu of social services.

Effective government is a mechanism through which we provide a network of support that allows individual citizens to prosper. That network of support is Infrastructure and it isn’t  something the market can supply. Using government to provide foundational systems and services is simply the process of doing collectively what we cannot do individually. 

In that literature I consulted, there was ample evidence that physical infrastructure is required if business and the economy are to thrive, and a substantial amount of emerging evidence that social infrastructure is equally necessary to support and empower individuals and families.

Biden’s American Jobs Plan would invest $400 billion in the caregiving economy; $137 billion in schools, early learning centers, and community colleges; $111 billion in clean drinking water; and $621 billion in various transportation projects. All of those investments are part of a supportive network that will pay dividends by enabling more Americans to live productive lives.

That supportive network is certainly infrastructure.

 

 

A (Collapsed) Bridge Too Far

The liberal political site Daily Kos maintains an infrastructure series; recently it posted an entry titled “Another Week, Another Bridge Collapse in America.”

This past Monday, news came of another bridge collapse in the United States, this time in Chattanooga. The fact that a bridge collapse has to be qualified with the determiner ‘another’ in the richest Country the World has ever known is distressing, even more so considering said bridge was also part of the largest infrastructure project the World has ever know.

Late Monday morning, the side of an overpass on I-75 collapsed, tumbling onto the ramp headed to Chattanooga. This bridge had been built in the 1950’s, and was recently inspected in July 2018. The condition of the bridge was found to be ‘Fair,’ which sounds more like a weather report than something very large that can collapse and kill you.

This particular collapse was evidently caused by an oversized truck that had slammed into the bridge and weakened it. But nationwide, the number of structurally-deficient bridges is staggering; assuming funding at current rates, engineers estimate that it will take 82 years to repair all of them.

The American Road and Transportation Builders Association has issued a report based upon 2018 data. It shows

  • There are 616,087 bridges in America
  • Of those, 47,052 (nearly 8%) are “structurally deficient” and need urgent repairs
  • 235,020 bridges (38%) need some sort of repair
  • Americans cross structurally deficient bridges 178 million times a day, including such landmarks as the Brooklyn Bridge and the San Mateo-Hayward Bridge over the San Francisco Bay
  • The average age of a structurally deficient bridge is 62 years

Structurally deficient doesn’t necessarily mean that the bridge is in imminent danger of collapse, but it also isn’t a label affixed to bridges with minor problems. The post included the definition used by Virginia’s Department of Transportation:

Bridges are considered structurally deficient if they have been restricted to light vehicles, closed to traffic or require rehabilitation.Structurally deficient means there are elements of the bridge that need to be monitored and/or repaired. The fact that a bridge is “structurally deficient” does not imply that it is likely to collapse or that it is unsafe. It means the bridge must be monitored, inspected and maintained.

More than 1200 bridges in the state of Indiana are considered structurally deficient.

The Daily Kos post links to a list of the bridges in the worst shape. As the list makes clear, the worst bridges are exclusively urban interstate bridges.

Why are highway bridges in urban areas the most dangerous of all in America?

  • Decades of neglect of urban infrastructure by state and federal authorities who feel taxpayer dollars are better spent on rural and suburban constituents. (Thanks to gerrymandering, this is the case in Indiana.)
  • Lack of public transportation, or overcrowding of public transportation, forcing these structures to carry far more vehicles than they were ever designed for.
  • Replacing these structures in an urban environment, where service cannot be interrupted and there is no available real estate to build a new bridge alongside, is extremely costly.

When you think about it, governments exist to provide infrastructure–not just physical infrastructure, but also the social infrastructure that prevents what Hobbes called “a condition of war of everyone against everyone.”

When a government can’t even sustain the physical infrastructure, it is a failed government.

Penny Wise…

Investigators looking into those raging, destructive fires in California a couple of months ago have determined that the fires were caused by power lines that came into contact with each other during high winds.

According to Engineering News Record (I know–you have a copy on your coffee table, don’t you?),

The resulting arc ignited dry brush on Dec. 4, 2017 , starting the blaze in Ventura and Santa Barbara counties that resulted in two deaths and blackened more than 440 square miles (1,139 square kilometers), according to the investigation headed by the Ventura County Fire Department .

The arc “deposited hot, burning or molten material onto the ground, in a receptive fuel bed, causing the fire,” said a statement accompanying the investigative report.

Investigators said the Thomas fire first began as two separate blazes started about 15 minutes apart that joined together. They determined Southern California Edison was responsible for both ignitions…

The fire destroyed more than 1,000 structures before it was contained 40 days after it began near the city of Santa Paula . A firefighter and a civilian were killed.

If the damage from the fire itself wasn’t destructive enough,

A month after the blaze started, a downpour on the burn scar unleashed a massive debris flow that killed 21 people and destroyed or damaged hundreds of homes in the seaside community of Montecito . Two people have not been found.

Here’s my complaint. (Okay, my diatribe.)  The ravages of the fire–the destruction of homes, the deaths, the dislocations– could have been avoided had the power lines been buried. And it isn’t just California, and it isn’t just the enormous amount of damage done every year by downed or otherwise unsafe power lines–there’s also an aesthetic issue, at least in cities, where poles and lines clutter the sky.

The immediate response to this complaint is always the same: burying power lines is too expensive. That response is typical of America’s approach to infrastructure generally, which can be perfectly summed up by the old adage “penny wise and pound foolish.”

Over the long term, buried power lines will require less maintenance and will cause far less damage. (Southern California Edison is now in bankruptcy, thanks to the fires.)

It’s the same story with other infrastructure. Streets that are properly paved and repaired last longer and require less annual attention. (Indianapolis’ third-world streets are the result of many years of “fixing” recurring potholes with haphazard and ungainly patches and the application of paper-thin asphalt coatings to untouched, steadily deteriorating street beds.)

There’s an old saying that “long term” to a politician means “until the next election.” The political system’s incentives are all perverse: spend as little as you can (pretend it’s the result of “efficiency”); whatever you do, don’t raise taxes; do the repairs that you absolutely must as cheaply as you possibly can, and let the next guy worry about it.

The problem is, when we don’t do it right–we have to do it over. And over.

Uncomfortable Parallels

I realize that this blog has become something of a “downer,” and I apologize in advance for this particular post.

The other day, I was trying to cheer myself up by thinking of times in U.S. and world history when the prospects seemed bleak but the challenges were ultimately surmounted–the civil war, the 60s, etc. Then I thought about the Dark Ages, so I did a bit of googling. It appears that there is a fair amount of scholarly bickering about how long and how “dark” the Dark Ages actually were, but what made me sit up and take notice was an article on a history site titled “The Five Major Causes of the Dark Ages.”

According to the article, those five causes were 1) the fall of the Roman Empire; 2) the little Ice Age; 3)Famine; 4) the Black Plague; and 5) a lack of good roads.

If you think of the last century or so as an “American Age” during which the U.S. has dominated the world in much the same way that Rome dominated its time,  America’s current retreat from international leadership becomes especially ominous. It was concerning when George W. Bush’s cowboy demeanor and war in Iraq incurred the strong disapproval of many of our allies, but that faded with the international popularity of Obama .

Trump’s ignorance and bellicosity–not to mention the embarrassing buffoonery that has generated barely veiled personal disdain from world leaders–has diminished America’s stature, undermined important alliances and generated pushback from longtime allies. Books and articles comparing the current status of the U.S. to Rome are proliferating.

We are unlikely to see an Ice Age, but we are increasingly likely to see dramatic environmental degradation, thanks to the current administration’s anti-science unwillingness to confront climate change. (Gotta keep those fossil fuel donors happy!) Current predictions include warnings that areas of the globe where millions of people now live will become uninhabitable–or “best case” (!)– that huge portions of the earth that are currently being cultivated will become unsuitable for farming and food production. Famine, anyone?

I don’t know enough about medical science or the likelihood of pandemics to form an opinion, so let’s assume that isn’t a major threat (although millions of migrants and not enough food sounds like a breeding ground for epidemics).

But a lack of good roads?

We’re there. For years, America has allowed its infrastructure to decay–we wouldn’t want to pay taxes to fix those crumbling roads and bridges. We especially wouldn’t want to tax those “makers” whose corporations have profited from an infrastructure that has allowed them to receive raw materials and ship finished goods….

You’d think that intelligent self-interest would cause us to modify behaviors that are so obviously destructive. Take climate change: if we act to protect the environment, and the scientists are all wrong, we’ll just end up with clean air and drinkable water. Bummer. If we don’t act, and the scientists are right, welcome to the Dark Ages. Much bigger bummer.

Or take infrastructure. When those profitable companies that are fat and happy using their tax breaks to buy back their stock suddenly face major expenses or even a complete inability to do business due to failing roads and bridges or the degradation of the electrical grid, who are they going to blame? (We know the answer to that one….)

Wasn’t it Santayana who said “Those who don’t know their history are doomed to repeat it?”

 

 

 

 

 

 

Taxes and the Common Good

I know “real Amuricans” sneer at the notion that we might learn from the experiences of other countries. Universal healthcare? A commie plot! Decent mass transit? People who can’t afford–or don’t want– cars shouldn’t be coddled! A comprehensive social safety net? You are a commie!

Every so often, however, a “real American” finds living in a country that actually offers these and other subversive services is pretty attractive. Vox recently published an essay by one such person, whose job and that of his wife requires that they split their time between Wisconsin and “high tax” Sweden.

My wife and I have been dividing our time between jobs in Sweden and Wisconsin for the past dozen years, and I’m here to tell you that taxes in Sweden are not that high. To my surprise, I found that there are lots of things to love about the Swedish tax system. Swedish taxes are easy to pay, rational, and efficient. Best of all, rather than take away opportunities, Swedish taxes expand them.

The writer goes on to list things he loves about Swedish taxes. No kidding.

It turns out the average Swede pays less than 27 percent of his or her income in direct taxes. As I’ve written elsewhere, my wife and I pay about 22 percent of our US income in taxes. Our Swedish income tax was 31 percent. So, yes, our income taxes in Sweden were higher than in the US, but we still paid less than one-third in tax.

And you get far more for your taxes than you do in the US. In Sweden, college is free and students get a housing stipend. A colleague’s daughter, Kerstin, just completed a five-year dental program. Her family paid nothing for her education.

In Sweden, tax forms are simple, and they come already filled out. The author points out that tax-preparation services cost American taxpayers more than $32 billion per year–not to mention hours of citizens’ time and effort.

And in Sweden, there are no property taxes.

When the conservative government, favoring lower taxes, came to power in Sweden in 2006 one of its first steps was abolish the property tax and replace it with a fixed fee. The real estate fee for services is 7,112 SEK per house ($825 at current exchange rates).

This is the same for everyone no matter what the assessed value of the dwelling. The fee is $12 a month for our co-op apartment in Stockholm. If we owned the same property in Madison, our taxes would be $18,000 a year.

There are sales taxes in Sweden, and they’re high, but even then the author finds mitigating factors:

Sales taxes are high in Sweden, but you don’t see them, and that makes them easier to pay. If something costs 100 kronor, you pay the 100 kronor! Only when you look at the receipt do you see that it costs 80 kronor and 20 kronor for VAT (value-added tax). Many things are taxed at lower rates — 12 percent to have dinner out or buy groceries, 6 percent (only half a percent higher than our sales tax in Madison) for books and tickets to cultural events and in-country travel. Health related items: zero percent.

It is true that sales taxes are regressive; poor people pay a higher proportion of their income in this tax. In the US, a 25 percent sales tax would have to be offset with some kind of subsidies for our many poor. But because Sweden has a narrower income distribution, its sales tax is less regressive than in the US.

A fascinating difference between the U.S. and Sweden is that, in Sweden, if the government wants to encourage an activity, they don’t do it through the tax code.

One of the reasons US income tax preparation is so awful is that we try to reward certain activities by providing a tax deduction. If you do some good deed (like putting in a solar panel) and if you can find the receipt and documentation…, then you can list a number on Form H, line 36, that will lower your taxes.

Does this feel good? Do you feel rewarded for your solar panel?  Or is it just another damn number on a tax form?

If the Swedish government wants you to do something, they give you the money. For example: Having children is good for the society and costs parents money. In the US, you get a deduction on your income tax for dependents. In Sweden, you get a check every month and you can use it to buy shoes. For one child you get $120 a month and up to $620 for four children. Every parent gets a check.

The most persuasive argument for Sweden’s approach (at least, from my perspective) is that the taxes generate income used to provide collective goods that make life better and less costly for citizens.

Not having to pay for college gives the best and the brightest the opportunity to attend any school they choose — equalizing opportunity on merit, not parents’ wealth.

It’s not just college. Public amenities like parks and hiking trails, excellent and frequent public transportation, and–oh yes– universal health care.

Paradoxically it turns out the bloated, heavily lobbied, privatized US system spends more tax money ($4,437) per person than Sweden’s socialized health care ($3,184).

This is due to Swedish efficiency rather than poor service. I do get to choose my doctor, have high-quality care a short walk from my home, same-day appointments and short waits when I walk in unannounced.

Keep chanting “We’re number one! We’re number one.” Maybe we’ll convince someone besides ourselves..