Fix our water infrastructure

The American Society of Civil Engineers recently rated the US C- in their Infrastructure Report Card. They found that 6 billion gallons of clean, safe drinking water (enough to fill 9,000 swimming pools) are lost every day through leaky pipes, while a water main breaks every 2 minutes, totaling nearly 238,000 breaks per year. In many towns and cities, our drinking water infrastructure — which brings clean water to our families — is not managed with the best technology available. 

And, climate change is not going to make it better. It’s expected to include changes in precipitation patterns, resulting in urban flooding, burst pipelines, forest fires, and unpredictable and extreme rainy seasons. We are risking losing access to clean drinking water, contamination from sewer spills, and threats to home and safety from storms and flooding. 

Biden’s infrastructure plan does include funding for state and local governments to upgrade their water infrastructure. They can modernize the technology they use to manage their water systems. Will they?

America First

This Dubai Ports deal and subsequent commotion has brought out the isolationists. There are now twelve bills aimed at 'protecting America's infrastructure' being introduced by our esteemed Representatives and Senators.

Perhaps, the most ridiculous bill is that sponsored by Representatives Hunter of CA (the same genius who wants to build a wall between the US and Mexico) and Saxton of NJ. Their bill would make it illegal for foreign companies to own or manage US critical infrastructure. The bill leaves the definition of infrastructure to the President, who, at one time, included agriculture and food as part of our infrastructure. If this bill passes and that definition of infrastructure is used, forget about drinking Poland Springs or eating Danone yogurt and a heck of a lot more things.

Not wanting to look unpatriotic but willing to look stupid, Senator Clinton has a bill to make the owning or managing of US ports by foreign companies illegal.

Where have these people been for the past sixty years when American companies were moving into most countries around the world? Where have these people been the past five years when the financing of our deficit has been done by foreign companies?

When do we start addressing our infrastructure problem?

Last week's explosion in San Bruno is another warning that we have to get our infrastructure under control. One piece of this infrastructure - gas pipelines (the cause of the San Bruno explosion) - seems to be crying out for help. More than 60% of our gas pipelines are more than 40 years old; the San Bruno line was 50 years old and at the end of its useful life.

In the past 20 years there have been 2,840 "significant gas pipeline accidents"; that's more than 2 a week. More than 900 of these accidents have resulted in deaths or serious injury. Isn't it time to get serious about our infrastructure?

Barney's Doing Something?

I was surprised to learn that Barney Frank was instrumental in the formation of the Sustainable Defense Task Force, which has proposed a number of cuts in the defense budget, which Obama and company seem to consider a sacred cow. I was even more surprised that there are other Congressmen behind the movement and that the others include people such as Ron Paul, who is diametrically opposed to Barney in many areas. Barney is involved with the task force even though he has said he would vote for keeping GE working on the F-35 which the Pentagon does not want. The question, of course, is whether these guys will follow through.
The report lists a number of places where the defense budget could be cut without damaging us. It's rationale is to ask rather obvious questions:

• Is the weapons system based on proven and/or reliable technology?
• What is the cost-benefit of a particular program?
• Does the program mesh with the changing challenges faced by the military?
• Are the cost-saving opportunities that are not being investigated?

But these rather basic questions yield areas where we can save a bundle without damaging our military capabilities. Here is their list of areas of potential savings:

Strategic Capabilities

1. Reduce the US nuclear arsenal; adopt dyad; cancel Trident II

• 1000 deployed warheads

• 7 Ohio-class SSBNs

• 160 Minuteman missiles                                                                           $113.5 b.

2. Limit modernization of nuclear weapons infrastructure and research              $26 b.

3. Selectively curtail missile defense & space spending                              $55 b.

Conventional Forces

4. Reduce troops in Europe and Asia, cut end strength by 50,000                     $80 b.

5. Roll back Army & USMC growth as wars in Iraq and Afghanistan end $147 b.

6. Reduce US Navy fleet to 230 ships                                                          $126.6 b.

7. Only retire two Navy aircraft carriers and naval air wings                                $50 b.

8. Retire two Air Force fighter wings, reduce F-35 buy                                    $40.3 b.

Procurement and R&D

9. Cancel USAF F-35, buy replacement                                                          $47.9 b.

10. Cancel USN & USMC F-35, buy replacement                                   $9.85 b.

11. Cancel MV-22 Osprey, field alternatives                                            10 b. – $12 b.

12. Delay KC-X Tanker, interim upgrade of some KC-135s                               $9.9 b

13. Cancel Expeditionary Fighting Vehicle, field alternatives                         $8 b. – $9 b.

14. Reduce spending on research & development                                           $50 b.

Personnel Costs
15. Military compensation reform                                                                            $55 b.
16. Reform DoD’s health care system                                                                      $60 b.
17. Reduce military recruiting expenditures as wars recede                                        $5 b.
Maintenance and Supply Systems
18. Improve the efficiency of military depots, commissaries, and exchanges               $13 b.
Command, Support, and Infrastructure
19. Require commensurate savings in command, support, and infrastructure             $100 b.


It's a big number, a very big number.

Will the system grind to a halt?

That's the prediction of the Urban Land Institute with regards to our transportation infrastructure. We are just too dependent on the automobile. There are 750 cars per 1,000 Americans, 500 per Englishman and much fewer around the world. And we don't like trains. We have 300 kilometers of high-speed rail; Japan has 2,000 and is building more. We are building exactly zero.

But it isn't just our transportation infrastructure. A few months ago I reported on problems with our water infrastructure.

Fix our infrastructure

Elizabeth Drew has an excellent article about our inability or unwillingness to maintain our infrastructure. The American Society of Civil Engineers (ASCE) gives it a grade of D+. Some excerpts from the article:

The water pipes underneath the White House are said to still be made of wood, as are some others in the nation’s capital and some cities across the country. 
We admire Japan’s and France’s “bullet trains” that get people to their destination with remarkable efficiency, but many other nations have them as well, including Russia, Turkey, and Uzbekistan.
The ASCE says that the estimated need of support for America’s infrastructure by 2020 is $3.6 trillion. Total spending at current levels is estimated by the ASCE to be $253 billion annually and estimated spending between 2013 and 2020, before passage of the highway bill, is estimated at $2 trillion, leaving us $1.6 trillion short.
The ASCE’s 2013 report card said that one in nine bridges was structurally deficient; that as of 2013 the average age of the nation’s 607,380 bridges was forty-two years, while the Federal Highway Administration estimates that “more than 30 percent of existing bridges have exceeded their fifty-year design life.” According to the ASCE, to have safe bridges by 2028, the US needs to invest $20.5 billion per year, but current spending annually on bridges is $12.8 billion.
Inland waterways, which get little attention, are, the ASCE says, “the hidden backbone of our freight network,” carrying “the equivalent of about 51 million truck trips each year.” But the waterways haven’t been updated since the 1950s and because half of the locks, according to the ASCE, are over fifty years old, barges have to be stopped for hours each day, “preventing goods from getting to market and driving up costs.”
32 percent of America’s major roads were “in poor or mediocre condition.
a backlog of nearly $78 billion in maintaining mass transit.
the level of federal investment in fixing the aging electrical grid and the pipelines for distributing energy was leading to an increasing number of power failures and interruptions.
the annual cost of rust to the country at more than $400 billion, or 3 percent of GNP.

The gas tax hasn’t been raised since 1993, when it was set at 18.4 cents per gallon—and wasn’t indexed for inflation. Had inflation been taken into account, the gas tax would now be 30.1 cents per gallon—almost twice what it is now. When the tax was first imposed the price of gasoline was around $1.00 per gallon.

Congress raids the funds held by the Federal Reserve system in case of an emergency need for liquidity in the economy, or to rescue a bank—it’s referred to as the Fed’s “rainy day fund.

A different approach to highway maintenance

Matthew Kahn and David Levinson are proposing a change in the way the federal government finances our highway infrastructure.

They think that our current highway infrastructure is so bad that all the money in the Highway Trust Fund should go to maintaining what we have today. Currently, about 30% of the Highway Trust Fund (money from gas tax and tolls) goes to new construction. Not only should all the money go to existing infrastructure but 1% of the fund should go to improving the capabilities and performance of state highway departments.

New projects would be funded by a Federal Highway Bank, which, they hope, would be self-financing after being initially funded by the government. Also, they feel that this bank would have more rigorous standards in allocating funds. And to put money on the table the Bank would reward especially good projects with subsidized loans and bonuses for projects which exceed performance standards.

Solve the infrastructure problem by making money

Thomas Hanna does not mean "making money" in the sense of earning it. He means it in the sense of the government issuing new money. Hanna argues that neither public-private partnerships nor the issuance of government bonds will solve the problem. He feels that the days of public-private partnerships are over in that the private company does not make enough money on what is a considerable investment. Governments suffer because of the high costs of the bonds. He is pushing a national infrastructure bank or a network of state-level infrastructure banks. He feels that this is what quantitative easing did when the Fed pumped trillions in new money into the financial system.

Infrastructure gets a grade of D+

The American Society of Civil Engineers (ASCE) evaluates the nation's infrastructure every four years.  Our grade this year is D+, which is an improvement over the 2009 grade of D.  D has been the typical grade since 1998; for twenty-five years we have seen basically no improvement in infrastructure overall. This is what a great nation does?

The ASCE evaluations are quite comprehensive.  They measure water and environment, transportation, public facilities and energy.  Each of these categories is brokne down into sub-categories, which are then evaluated as to eight criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation.  Overall, most grades fell below a C.

From 1 to 6

We have slipped from the first to the sixth position in something called the Global Competitiveness Index, a product of the World Economic Forum, the people who bring you the Davos forum. The countries ahead of us are Switzerland, Finland, Sweden, Denmark and Singapore. India is 43rd, China 54th.

The index is comprised of a country's standing in nine 'pillars': institutions, infrastructure, macroeconomy, health and primary education, higher education and training, market efficiency, technological readiness, business sophistication and innovation. Each pillar has sub-categories. It seems to me that we are weakest in

• institutions - public trust of politicians, favoritism in decisions of government officials, wastefulness of government spending, efficacy of corporate boards
• infrastructure - quality of transport infrastructure
• macroeconomy - government surplus/deficit, national savings rate, government debt
• higher education and training - quality of educational system, quality of math and science education
• market efficiency - agricultural policy costs
• innovation - availability of scientists and engineers
  

Gee, They May Actually Do Something

Congress and the administration seem to be moving towards a reasonable stimulus package. While I really find this hard to believe, obviously I'm hopeful that our leaders will finally exercise some responsibility.

Yes, we need to get money into the hands of those who will spend it - and spend it quickly. Hence, here is one case where a flat amount makes sense; $500 to someone making $25,000 is a heck of a lot more than the same amount given to someone making $100,000. And the lower income person will have to spend it just to get by. Helping those who are unemployed survive without a job for a longer period of time is another necessity. Increasing food stamps temporarily would also help.

The infrastructure of this country is in sad shape. Be it water, transportation, schools - something is wrong with a large segment of our infrastructure. If there were sensible projects ready to go, we should also jump start them.

But, we can't forget the trigger to where we are now: too much of our financial structure is no longer controlled by banks. We need to have greater control over our 21st century, global financial system, not just the banking system.

Surprisingly, Washington agrees with the UN

I'm talking about thirteen federal agencies, not the politicians. The agencies predict that if significant steps are not taken to rein in global warming, the damage will knock as much as 10 percent off the size of the American economy by century’s end. The UN produced a very similar report recently.

The US report lays out the devastating effects of a changing climate on the economy, health and environment, including record wildfires in California, crop failures in the Midwest and crumbling infrastructure in the South. It's possible that our exports and supply chains - especially trade and agriculture - could be disrupted, agricultural yields could fall to 1980s levels by mid-century and fire season could spread to the Southeast.

Climate change could slash up to a tenth of gross domestic product by 2100, more than double the losses of the Great Recession a decade ago. The report projects costs of $141 billion from heat-related deaths, $118 billion from sea level rise and $32 billion from infrastructure damage by the end of the century.

The change will affect every part of the country. More people will die as heat waves become more common, the scientists say, and a hotter climate will also lead to more outbreaks of disease.

What can be done? The report offers three main solutions: putting a price on greenhouse gas emissions, which usually means imposing taxes or fees on companies that release carbon dioxide into the atmosphere; establishing government regulations on how much greenhouse pollution can be emitted; and spending public money on clean-energy research.

Where is China Spending Its Stimulus Payments

Housing, infrastructure, agriculture, health care and social welfare. Rather a contrast to what we are spending $700 billion on. Granted China is still a developing country and our economy is more complex than China's, but are we doing that great with regards to housing, infrastructure, agriculture, health care and social welfare?

Infrastructure Report Card

Every four years the American Society of Civil Engineers publishes a report grading the country's infrastructure.  The 2013 report card has just been published.  The grades are based on on capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation.  And, surprise of surprises, there is an improvement over 2009.  It's not much - from D to D+ - but it is an improvement for the first time in fifteen years.

The grades in 2013 ranged from a high of B- for solid waste to a low of D- for inland waterways and levees.  Most grades fell below a C.  Solid waste, drinking water, wastewater, roads, and bridges all saw incremental improvements, and rail jumped from a C- to a C+.  No categories saw a decline in grade this year.

The report attributed the increased grade to greater private investment in the rail category, renewed efforts in cities and states and federal funding. 

Costs of Crappy Infrastructure

Shayne Henry and Samuel Sherraden have looked at a number of government publications and have created the following table which, in their opinion, shows that our crappy infrastructure is costing us $195 billion a year in lost efficiency.

Looking at our infrastructure problem

Bipartisan Policy Center has some thoughts about remedying our infrastructure problem.

Today is Climate Day

A group of high muck-a-mucks - four former presidents or prime ministers, two Nobel economics laureates and people from financial institutions such as the World Bank, IMF and Asian Development Bank -  have produced another report, "Better Growth, Better Climate". As the title indicates, the report argues that improved economic and intelligent growth will improve our climate picture.

The report advocates structural reform in urban infrastructure, in farmland and forests and in energy markets. The three of these areas account for the lion's share of greenhouse-gas emissions. Cities generate the most emissions and are where most of the population growth will occur. The authors believe that cities are too spread out. If they were more dense and had better transportation, urban sprawl would not be the problem it is today. And sprawl is costly; the authors estimate it costs us $400 billion a year and would be significantly reduced if we had more extensive systems of roads, sewers and the like. As important, a better infrastructure would cut greenhouse-gas emissions by the equivalent of 1.5 billion tons of carbon dioxide a year, mainly because commuters would switch from cars to public transport (or bicycles).

The solution is not restricted to cities. The authors believe we should double our investment in agriculture research and forests. Major cuts in subsidies for fertilizers would go far to eliminate greenhouse gas emissions. While we're on subsidies, let's look at those for fossil fuels which currently run at $540 billion a year. They say we should eliminate them and stop using coal.

Here is a summary of their plan.

Fix the bridges

Our infrastructure sucks. Some studies have shown we waste $195 billion a year because of this. As I've said before, fixing our infrastructure would be a worthwhile project to reduce unemployment. Even though there will be a time lag in many cases, there are some projects that are ready to go today.

Donna Cooper thinks we should begin with bridges. The Federal Highway Administration has flagged 150,000 of them as being deficient. Bridges contribute $8 billion of the wasted $195 billion and they are in every state. Here's a list of the states which have the most deficient bridges. Cooper has listed the number of unemployed in each state and a simplistic ratio of unemployed worker per bridge in need of repair.

A Better Use of Our Money

You'll feel very sad when you read the McClatchy article on construction projects in Afghanistan. In the U.S.A. the economy sucks and the infrastructure sucks, yet we are afraid to spend money on bringing our infrastructure into the 21st century. However, we are quite willing to piss money away in Afghanistan.

And we are wasting lots of cash trying to bring Afghanistan into the 19th century. Today in Afghanistan, we are sponsoring the kind of investment we should be making in this country. The problem is that the Afghanis do not have the expertise to complete many of these projects. We are willing to accept bids that are clearly too low. We are willing to accept sub-standard work. We are willing to re-hire companies that have proven, time and time again, they are incapable of getting the job done.

This is no way to help Afghanistan or ourselves. When will we smarten up?

Wall or Infrastructure?

Source: 2013 Infrastructure Report Card from the American Society of Civil Engineers