Some of the infrastructure here in the U.S. is in need of replacement or improvement/overhauled to keep our economy going. Most of our large infrastructure was built during the expansion years of the early 20th century when the country had its meteoric growth and positioned itself as the world’s most dominant economy. Credit has to be given to government officials- both federal and local- for their vison in designing and building the infrastructure that helped consolidate the country as a world power. Without the vision for the development of this infrastructure-like the interstate highway system, colossal bridges, seaports and airports- expansion of the economy in terms of jobs and GDP would not have been possible.
Back then, the country was young and had small debt, so incurring in more debt was no issue, but as a consequence to all this expansion debt has increased substantially and today the US is the largest debtor in the world. We have constant scares in Washington about the fiscal cliff and the default of foreign debt when politicians use this as a way to negotiate their party interests. That is how close things are today in terms of budget constraints and being able to come up with capital for the many projects that we have today is a major challenge. The days when the federal government assumed 100% percent of the bill for capital spending are mostly gone and is the reason why things are stagnant and not much progress seems to be achieved and the years go by. Politics is another reason why projects aren’t executed in a diligent way and there is constant bickering over where the money is going to come from to cover issues like defense spending, Obama care, immigration, jobs creation, Social Security, VA system and infrastructure.
The future for our infrastructure is to be developed in a joint way between the federal/state governments and the private sector with long term projects. The list of infrastructure needed is available today and we know what is required, but the question is how to pay for it and how to get politicians to move forward like they did in the last century. Now that the economy is in decent shape-depending on who you ask- we need to start prioritizing which projects go to the Federal government-mainly large ones- which ones for the state level and which ones for private equity and/or joint ventures. This is a national commitment we need, in the same way that we had in the early 20th century that enabled the country to prosper. When I say joint ventures, I mean that all parties involved will share the bill. The general public is also going to have to assume some of the cost of some of the projects via tolls and/or revise the gas tax. Since the price of gasoline has decreased dramatically, the situation is even more dire because revenue is down from the gas tax and there are less resources to fix roads and bridges. After viewing the State of the Union speech last week, President Obama mentioned infrastructure among other things and that we need more cooperation between politicians to move forward, the problem seems that there is more talk than action.
One example of a piece of infrastructure need to be replaced is the Portal rail bridge over the Hackensack river in New Jersey, carries over 450 trains a day and more than 150,000 passengers. The railroad bridge is the busiest in the western hemisphere, it is 104 years old, its replacement costs almost a billion dollars and it is a big bottleneck for commuters and the economy. Everybody knows it needs replacement, but until now it is still a project.
The Dingman’s Ferry Bridge over the Delaware river is a beautiful example on how private enterprise can take care of some projects. This toll bridge is over 100 years old and is owned and operated by the Dingmans Choice and Delaware Bridge Company. It has a toll of $1 and performs its own maintenance each year.
My post of last October 29th “Made in USA”, requires infrastructure update and replacement to compete in the globalized economy. We need to be competitive and we have been too passive recently because of the amount of problems we have faced recently as a nation. We are currently in a great position to start this endeavor because our economy is on the upswing, our troops are returning home and defense spending will be more targeted than ever and we are not involved in major wars anymore. We need infrastructure that will create jobs. We need to take care of our veterans in the VA system and also transition them into civilian life by providing jobs for them.
Finally, one great example of cooperation between the government and the private sector is the space industry. NASA con no longer afford to fly alone so many projects are being developed and outsourced with the private sector and the industry is booming right now. Everyday more and more companies are working with the government and on their own to reach far away galaxies. That is way to move forward.
Space, the final frontier…