Infrastructure Spending

[swansont]

Pulling some material on the infrastructure spending from the Bush tax Cuts thread

 

I support the president's proposal to spend another $50 billion on transportation infrastrature (even though I think Jon Stewart makes an excellent point that that was supposed to be covered by the $900B one)

 

The answer to this was yes — Stewart did indeed lampoon this

 

http://www.thedailyshow.com/watch/tue-september-7-2010/indecision-2010---are-you-ready-for-some-midterms-

 

ending with "didn't we do this already? Shouldn't we have like a 22nd-century infrastructure by this point where the bridges and tunnels just come and pick us up at our houses?"

 

 

We have almost 150,000 structurally deficient bridges, and most of them are in use.

http://slacktivist.typepad.com/slacktivist/2010/08/5-bridges.html

 

The stimulus package included $50 billion of transportation infrastructure. That's $333k per bridge, if money is spent all on bridges, which it isn't. That's puny. The Wilson bridge reconstruction cost $2.5 billion. The repairs on the Tappan Zee is estimated at $6.4 billion

 

 

 

 

For sure. I had no problem with the President's new $50 billion infrastructure bill in theory. I'd just like to know why those repairs weren't covered by the $900 billion stimulus bill, as I thought had been planned. That's the point Jon Stewart raised, at any rate.

 

If we hear nothing further about it, does that mean it was just a political play that didn't reflect an actual need, and that the original $900 billion stimulus bill is still working on those repairs as planned? I have no idea, but it seems like it would be a good thing to know.

 

 

 

The total amount of work that needs to be done is much larger than what was in the stimulus bill is why; I don't think the stimulus was sold as curing all of the issues. We have been scrimping on maintenance for decades to help fuel the illusion that low taxes is a viable condition. Preventative maintenance not sexy, so nobody cares too much, until there's a catastrophe. (But then it's a crisis, and we temporarily respond well to crises these days — we ask no questions and are even willing to make some sacrifices) I don't think not hearing about it has any more weight than not hearing about it in the past; it's more "out of sight, out of mind."

 

Yes, $48.1 billion was in there for it.

 

$27.5 billion for highway and bridge construction projects

$8 billion for intercity passenger rail projects and rail congestion grants, with priority for high-speed rail

$6.9 billion for new equipment for public transportation projects (Federal Transit Administration)

$1.5 billion for national surface transportation discretionary grants

$1.3 billion for Amtrak

$1.1 billion in grants for airport improvements

$750 million for the construction of new public rail transportation systems and other fixed guideway systems.

$750 million for the maintenance of existing public transportation systems

$200 million for FAA upgrades to air traffic control centers and towers, facilities, and equipment

$100 million in grants for improvements to domestic shipyards

 

http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

 

 

I decided to look into this further. The part where Jon Stewart goes for the laugh — $50 billion on top of a previous $27 billion (from the video — for highways and bridges, from the $48 billion total assigned to infrastructure) is a lot of money. But how does it really stack up against the problem?

 

As it turns out, the American Society of Civil Engineers (ASCE) does a periodic assessment of the infrastructure in the US. As far as I know they are nonpartisan (though they might be biased toward overstating the problem, as they are the ones who would be working on the solution), but here is the pertinent information from the report card for 2009:

 

Bridges

"A $17 billion annual investment is needed to substantially improve current bridge conditions. Currently, only $10.5 billion is spent annually on the construction and maintenance of bridges"

 

The good news? Bridges got the second-highest grade in the report: C (behind solid waste, at C+)

 

Roads

"Americans spend 4.2 billion hours a year stuck in traffic at a cost of $78.2 billion a year--$710 per motorist. Roadway conditions are a significant factor in about one-third of traffic fatalities. Poor road conditions cost U.S. motorists $67 billion a year in repairs and operating costs--$333 per motorist; 33% of America's major roads are in poor or mediocre condition and 36% of the nation's major urban highways are congested. 1 The current spending level of $70.3 billion for highway capital improvements 2 is well below the estimated $186 billion needed annually to substantially improve the nation's highways. 3"

 

 

Estimated spending of $380.5 billion vs. an estimated need of $980 930 billion, over a period of 5 years, for bridges + roads, a $549.5 billion shortfall. For all infrastructure, the estimated 5-year spending need is $2.2 trillion, with actual planned spending (at that time) at less than $900 billion (i.e. a shortfall of over $1.3 trillion). So the satire of the Daily Show belies the fact that no, what we're spending isn't going to get us to a "22nd century infrastructure." The stimulus and proposed additional spending on infrastructure, totaling ~$100 billion, is less than 10% of what is needed to make up that shortfall. We've inherited a whole bunch of infrastructure, and have squandered our inheritance by not maintaining it properly in order to propagate the illusion that low taxes are sustainable. And the problem with this is that it's gone on long enough that we erroneously think of these relatively low taxes as an entitlement.

[Pangloss]

Cool, thanks for digging into this.

 

I'm a litle confused about their math -- 186x5=930, not 980, right? -- but they might explain that in the full article (and hey, what's $50B these days anyway? <grin>).

 

It's pretty staggering to think that we might need $186 billion every year for five years just to fix everything. That's a whopper of a sum -- more than the second stimulus bill.

 

Holy cow.

[swansont]

My typo — it's 930. Looked like 980 when I read it.

[iNow]

So, to summarize, the question was why didn't the $49 billion with a B in the stimulus bill handle the infrastructure needs of our country, and the response was because it didn't properly scale to the overall requirements... The infrastructure need according to the ASCE is $5.5 trillion with a T over the next 5 years, and we paid only for less than 1% of that with the stimulus.

[swansont]

$2.2 Trillion

[iNow]

$2.2 Trillion

Figures I would also make a typographical error. Thanks. That means stimulus was only enough to pay for about 2% of the need.

[CaptainPanic]

Cool, thanks for digging into this.

 

I'm a litle confused about their math -- 186x5=930, not 980, right? -- but they might explain that in the full article (and hey, what's $50B these days anyway? <grin>).

 

It's pretty staggering to think that we might need $186 billion every year for five years just to fix everything. That's a whopper of a sum -- more than the second stimulus bill.

 

Holy cow.

It's a lot of money.

I'll continue my new hobby, which is to compare US government expenses to the Dutch expenses... just to illustrate how another country works... I hope it's interesting.

 

Today, I looked up the Dutch annual budget (2011 numbers) for national infrastructure and public transportation. It's 11.6 billion euro.

We have 16 million people. Scaled up to the size of the USA (300 million plus), that would be 217.5 billion euro (289 billion US $) for 2011. This money is already allocated, although it's probably going to be debated on a more detailed level.

The 2009 budget was 10.1 billion (scaled up to USA, that's 189 billion euro).

 

Mind you, the 11.6 billion are divided over a number of categories:

5 billion euro for the railroads and public transportation (so: trains, bus, trams, metro, etc., and necessary infrastructure) - probably including subsidies for the transportation companies, and not just construction and maintenance

3 billion euro for roads, bridges and tunnels (trains not included)

1.5 billion euro for coastal protection and dikes (also on rivers)

1 billion euro for waterways (canals, rivers, possibly harbors too)

1 billion euro for the "knowledge infrastructure". Not sure what that means actually. I guess phone lines and other data cables?

 

source (in Dutch): http://www.prinsjesdag2010.nl/miljoenennota/huishoudboekje_van_nederland

 

I've been trying to find the numbers of the local governments (municipalities), because I am pretty certain that they have their own budgets for all roads within the city limits... but I cannot find it.

 

It's necessary to point out that the Dutch pay more tax (link to another thread). Therefore, it is expected that this tax money is also spent on something.

In addition, the money for public transportation isn't a fair comparison in this case, since the popularity of public transportation is not comparable.

[swansont]

What happens if you scale by area instead of population? Transportation, among other aspects of infrastructure, has an area dependence.

[CaptainPanic]

What happens if you scale by area instead of population? Transportation, among other aspects of infrastructure, has an area dependence.

That's yet another factor why a one on one comparison isn't valid.

 

At the end of my previous post, I pointed out some reasons why a comparison is problematic.

 

Obviously, the size of a country, its population density, geology, tax system, popularity of types of transportation all affect the way investments are made for infrastructure... and all those factors complicate any comparison.

[JohnB]

I'm not sure that even area helps. We're about the same size, but you have more than 10 times our population.

 

FWIW, the Feds are spending $5.6 Billion on new infrastructure and $1 billion to renew the rail networks next year. On top of that each State has its own spending.

 

For Queensland it's; $7.3 billion on transport infrastructure, including $3.3 billion on roads this fiscal year.

 

For comparison, we have some 4.4 million people in a State of 715,000 square miles.

[Mr Skeptic]

Well, it also matters how the population is distributed. Canada for example, has a rather small population in a large area, but most of the population is in huge cities. So really most of the people are in a small area.

[swansont]

I agree, it's not going to be a simple function of either population or area, it's going to depend on population density and distribution, and other variables, and probably not in a simple way.

[JohnB]

Agreed.

 

Although you might be able to get some comparisons if looking at $ spent per year per 10,000 miles of rail lines, or 10,000 miles of road. I don't know what the figures are, but a comparison might be possible.