{"id":37562,"date":"2017-12-18T10:41:21","date_gmt":"2017-12-18T00:41:21","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=37562"},"modified":"2017-12-18T10:41:21","modified_gmt":"2017-12-18T00:41:21","slug":"infrastructure-report-for-the-us-dire-degradation-of-public-infrastructure","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=37562","title":{"rendered":"Infrastructure report for the US – dire degradation of public infrastructure"},"content":{"rendered":"

\t\t\t\tI recently wrote about the degraded infrastructure in Europe as a result of years of unnecessary fiscal austerity – see Massive Eurozone infrastructure deficit requires urgent redress<\/a>. Not only is the public amenity degraded but when transport cannot access key international trading routes (for example, bridges across the Rhine), then industrial prosperity and exports are undermined. The Eurozone nations are sinking into a mire of both human and physical infrastructure decay and the negative consequences will reverberate for decades to come. This is a global phenomenon. Recently, the American Society of Civil Engineers (ASCE) released its – 2017 Infrastructure Report Card<\/a> – for the US and the results are dire. This Report comes out every four years and provides a good guide to the “condition and performance of American infrastructure”. It gives grades (like “a school report card”) “based on the physcial condition and needed investments for improvements”. Overall, the US, the richest country in the World, was awarded a D+, which means “Poor at Risk” or mostly below standard and “approaching the end of their service life”. You don’t really have to be an engineer to appreciate this. Any drive or walk through a US city these days will allow you to see this decay. It is totally unnecessary, totally preventable and very damaging to the well-being of the people and firms that rely on the public infrastructure for their own activities. Myopic and ridiculous.
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I have written about my experiences in Manchester (UK) when I was studying for my PhD during the Thatcher years.<\/p>\n

Fiscal austerity starved essential public works maintenance with catastrophic results, which ended up requiring much higher public outlays to remedy the situation that would have been spent on on-going maintenance.<\/p>\n

That is why the myopic quest not to spend a few dollars today is ridiculous.<\/p>\n

Please read my blog – The myopia of fiscal austerity<\/a> – for more discussion on this point.<\/p>\n

More recently, the Cameron government in Britain demonstrated it hadn’t learned any lessons from that period – please read my blog – British floods demonstrate the myopia of fiscal austerity<\/a> – for more discussion on that point.<\/p>\n

Overall, austerity-obsessed politicians typically cut public infrastructure spending first because it is less obvious to people.<\/p>\n

Cutting a pension cheque, or some school support has fairly immediate impacts and, as such, invokes negative political consequences almost from the outset.<\/p>\n

But cutting maintenance spending on bridges, or failing to continue developing public transport systems is more easy to hide. The decay occurs by stealth as the infrastructure ages, or the population steadily grows to swamp the existing infrastructure.<\/p>\n

Eventually, we realise that our quality of life has been eroded but by then the political cycle has moved on and, in many cases, the culprits have retired on fat public sector retirement pensions and are swanning around on corporate boards channeling information and networks they built up during their political careers into the pursuit of their private prosperity.<\/p>\n

The lax rules which govern the shift of retiring politicians from Ministerial positions to private sector lobbying and <\/p>\n

Further, when governments impose fiscal austerity during recessed times, when the non-government sector is reluctant to spend, the typical asymmetry associated with private investment expenditure is exacerbated.<\/p>\n

The UK, for example, is suffering very low productivity growth at present. The reason is a lack of investment. But the reason for that is, in no small part, the extended austerity after 2010 and then the slow growth that followed when the British government realised the grand austerity plan was not even achieving its goals of reducing the fiscal balance.<\/p>\n

We often focus on the short-term negative impacts of fiscal austerity, but in this case, it also has serious long-term impacts on both the rate of business investment and the potential growth rate (which falls as capital formation stalls).<\/p>\n

The longer it takes for business investment to recover, the worse will be the long-term impact on potential GDP growth. In turn, this means that the inflation biases are increased because full capacity is reached sooner in a recovery – often before all the idle labour is absorbed.<\/p>\n

So, while George Osborne is long gone, the negative impacts of his policy folly will reverberate for a long time to come. His failings will continue on for many years and the flat productivity growth is one manifestation of that failing.<\/p>\n

It is the same the world over.<\/p>\n

The US situation is no different. The various levels of governments have imposed involuntary spending constraints on themselves with devastating consequences.<\/p>\n

I have written about the situation in Flint, Michigan before. Please read my blog – We starve the state and public infrastructure development at our peril<\/a> – for more discussion on this point.<\/p>\n

In addition, the blog cited discusses the release of an Australian Local Government Association (ALGA) report on the state of Australian infrastructure. <\/p>\n

Conclusion: 11 per cent of total public infrastructure assets were in a “poor or very poor condition”.<\/p>\n

So, the same the world over. The degradation of public infrastructure that hasn’t been privatised for a song and turned into profit is one of the defining characteristics of the neoliberal era and part of the process of suppressing the public and advancing the private.<\/p>\n

Except in the this context, we have been duped into believing the ‘private’ is all of us – we were sold the myth that privatisation would benefit all. The reality is that the sell-off of public assets transferred massive wealth from the public sector (all of us) to a small private elite cohort.<\/p>\n

And, the degradation of public infrastructure hurts most of us who rely on it for transit, education, health care, recreation, and the like.<\/p>\n

The American Society of Civil Engineers (ASCE) note that their ‘D grade rating’ – “Poor at Risk” – indicates that:<\/p>\n

\nThe infrastructure is in poor to fair condition and mostly below standard, with many elements approaching the end of their service life. A large portion of the system exhibits significant deterioration. Condition and capacity are of serious concern with strong risk of failure.\n<\/p><\/blockquote>\n

It sits between C (Mediocre, Requires Attention) and F (Failing\/Critical Unfit for Purpose) grades.<\/p>\n

The ASCE use the following criteria in assigning these grades:<\/p>\n

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