Funding Infrastructure
Right way/wrong way
It is estimated that America's infrastructure (mostly transportation systems) needs care and feeding of around $1.5 trillion to prevent further decay and disaster. The New York Review of Books magazine has an article recommending a new GSE (government sponsored enterprise) bank t0 help reduce the financing costs of doing so and also to help remove the special interest politics (more than 1,000 earmarks in the Tranportation Appropriation for example) from funding decisions.
Workers respectfully disagrees. The LAST thing we need is another GSE (like Fannie and Freddie) which just leads to moral hazard disaster and trillion dollar bailouts in the long-run. The current budget deficit is teetering at above 3% of national income (the US would not be allowed into the Euro-area monetary union with a deficit this high) with each American owing the federal government approximately $175,000 based on the government's current commitments. The bailouts of the current financial crisis is currenlty pegged at around $2 trillion dollars with no end in sight. Why on earth would we want to commit to another large-scale government funding scheme, in whatever shade of red it comes ?!
There are alternative to mass centralized infrastructure investment decisions, and local communties are already taking action. For example, Chicago's Midway airport is leasing itself for 99 years, this will net the community $2.5 billion, and create private incentives to improve the operation of the airport, bringing growth and development. However there are too setbacks, for example, Pennsylvania, has many great private toll roads (why should those not using roads have to pay for those that do use the roads? Tolls roads are the solution to the this collective action problem). However further fiscal rationalization was vetoed by the state legislature (not of course that the protection of state jobs and public labor union contributions to political campaigns had anything to do with the decision). In sum, the more decentralized a public funding is the more its costs and benefits can be weighed and judged by the people affected. A GSE infrastructure bank just does not meet this requirement.
It is estimated that America's infrastructure (mostly transportation systems) needs care and feeding of around $1.5 trillion to prevent further decay and disaster. The New York Review of Books magazine has an article recommending a new GSE (government sponsored enterprise) bank t0 help reduce the financing costs of doing so and also to help remove the special interest politics (more than 1,000 earmarks in the Tranportation Appropriation for example) from funding decisions.
Workers respectfully disagrees. The LAST thing we need is another GSE (like Fannie and Freddie) which just leads to moral hazard disaster and trillion dollar bailouts in the long-run. The current budget deficit is teetering at above 3% of national income (the US would not be allowed into the Euro-area monetary union with a deficit this high) with each American owing the federal government approximately $175,000 based on the government's current commitments. The bailouts of the current financial crisis is currenlty pegged at around $2 trillion dollars with no end in sight. Why on earth would we want to commit to another large-scale government funding scheme, in whatever shade of red it comes ?!
There are alternative to mass centralized infrastructure investment decisions, and local communties are already taking action. For example, Chicago's Midway airport is leasing itself for 99 years, this will net the community $2.5 billion, and create private incentives to improve the operation of the airport, bringing growth and development. However there are too setbacks, for example, Pennsylvania, has many great private toll roads (why should those not using roads have to pay for those that do use the roads? Tolls roads are the solution to the this collective action problem). However further fiscal rationalization was vetoed by the state legislature (not of course that the protection of state jobs and public labor union contributions to political campaigns had anything to do with the decision). In sum, the more decentralized a public funding is the more its costs and benefits can be weighed and judged by the people affected. A GSE infrastructure bank just does not meet this requirement.
posted by Cameron Weber at 12:50 PM
