The real trick to making America great again

Cross posted from RestoreReason.com.  There is a path to getting America back on track, but it has nothing to do with whom we elect to be our next president. The singular most significant action each of us can take this year is to demand the members of Congress put the good of the country ahead of partisan gamesmanship and special interests. And, if they don’t, vote them out of office!

Here’s the deal. Experts agree the best way to get out economy moving again is for the Federal government to invest big in repairing the country’s infrastructure. It is up to the government to do it because of what Nobel Prize-winning economist Joseph Stiglitz calls “a deficiency of aggregate demand, brought on by a combination of growing inequality and a mindless wave of fiscal austerity.” Basically, no matter how much they spend, the wealthy just can’t spend enough to adequately stimulate the economy. At the same time, as of the second quarter of 2015, corporate America had more cash on-hand that the economies of Belgium and Sweden combined ($1.43 trillion for S&P companies excluding those in the financial sector.) Tech companies are especially cash rich with Microsoft having $96 billion in cash, Google $70 billion and Cisco $60 billion. Although this hoarding means companies are positioned to weather tough economic times, it hurts the economy (especially since most of this money is held in off-shore accounts to reduce tax liability.)

We are all aware that our country’s infrastructure is in bad shape. Are roads are pothole laden and our bridges are structurally unsound.   The most recent Infrastructure Report Card from the Americans Society of Civil Engineers (ASCE) gives our Nation’s infrastructure a D+, and states that we need to invest $3.6 trillion by 2020 just to get it up to standard. The number one solution toward beginning to raise the grade according to ASCE is to “increase leadership in infrastructure renewal” and the organization maintains, “America’s infrastructure needs bold leadership and a compelling vision at the national level.

Such leadership and vision was provided by President Franklin Roosevelt in his establishment of the Works Progress Administration (WPA.) He designed the public works program “to put more men back to work, both directly on the public works themselves, and indirectly in the industries supplying the materials for these public works,” because “no country, however rich, can afford the waste of its human resources.” 2014 marked the 80th anniversary of the WPA, a Federal government program that provided 8 million Americans jobs during the Great Depression. According to the Smithsonian, “the WPA built, improved or renovated 39,370 schools; 2,550 hospitals; 1,074 libraries; 2,700 firehouses; 15,100 auditoriums, gymnasiums and recreational buildings; 1,050 airports, 500 water treatment plants, 12,800 playgrounds, 900 swimming pools; 1,200 skating rinks, plus many other structures. It also dug more than 1,000 tunnels; surfaced 639,000 miles of roads and installed nearly 1 million miles of sidewalks, curbs and street lighting, in addition to tens of thousands of viaducts, culverts and roadside draining ditches.” The San Antonio River Walk, the development of the park which paved the way for St. Louis’ Gateway Arch, and Camp David in Maryland are also just a few amazing products of the WPA.

Unfortunately, attempts to start even mildly ambitious efforts today have gone nowhere. Ray LaHood, who says, “our infrastructure is on life support”, was the secretary of transportation during Obama’s first administration. He is now co-chairman of Building America’s Future, a bipartisan coalition of current and former elected officials urgently pushing for more spending on infrastructure. In an interview on 60 Minutes, LaHood talked about the federal Highway Trust Fund, which gets its revenue from the federal gas tax of 18 cents per gallon which will be broke in 2016 unless something is done. The last time we raised the gas tax (how we funded the interstate system) was in 1993 said LaHood and spending on infrastructure has fallen to its lowest level since 1947. This reality he said, has caused us to fall from having the best infrastructure in the world, to being ranked 16th according to the World Economic Forum.

Big business recognizes the dire need to find solutions and has been vocal about sounding the alarm. In 2015, the conservative U.S. Chamber of Commerce voiced strong support for raising the gas tax for the first time in 20 years. It isn’t just roads and bridges that they are worried about. Our shortage of airport runways and outmoded air traffic control systems have made US air travel the most congested in the world, only two of our 14 major ports will soon be able to handle the biggest cargo ships, and although there are 14,000 miles of high speed rail around the world, none of it is in the US. ASCE says “by failing to invest in our vital transportation systems by 2020, businesses would pay an extra $430 billion in transportation costs, household incomes would fall by $7,000 and U.S. exports would fall by $28 billion.”

Former Pennsylvania Governor Rendell says, “The cost of inaction is greater than the cost of doing something. It’s become this literally crazed idea that spending money is bad. Federal governments and state governments have to spend money on certain things that are important.” In fact, just to maintain infrastructure as it is, an expert panel at the University of Virginia determined we need to spend $134 to $194 billion more each year through 2035. Total cost estimates to modernize top $2.3 trillion plus over the next decade, just for our transportation, energy and water infrastructure needs. Unfortunately, our infrastructure investment, currently at 2.4 percent of GDP, is only half of what it was 50 years ago.

Continuing to kick this can down the road only means there’s going to be hell to pay. There are over 240,000 water main breaks each year and rail congestion caused Midwest farmers to lose over $500 million in 2013 and 2014 in rail delays. The average ages of bridges and roads exceed 45 years and the average elementary school is 45 years old. “Our substandard roads, for example, cost urban motorists $700 to $1,000 per driver in repairs, wear and tear, and fuel. This doesn’t count the lost time involved in lower speeds and detours.”

And, with the U.S. Treasury’s ability to borrow at essentially zero (low interest rates offset by inflation), this is the perfect time to make the necessary investments in our infrastructure. Even if we only invested $18 billion per year, according to the Economic Policy Institute, it would produce a $29 billion increase in GDP and a net addition of 216,000 jobs within the first year. Of course, our real needs in terms of infrastructure investment are over $1 trillion, so the jobs eventually created could easily top one million.

So why won’t Congress get off the dime on infrastructure spending? There are a number of reasons, but I believe it basically boils down to the exact opposite of “it would be amazing how much we could get done if no one cares who gets the credit” and, the desire to starve the beast that is the Federal government. So, once again, ideology and partisan gridlock is keeping our Nation, and the rest of the world by association, from moving forward. Want to do your part to drive the required action? Use the only power many of us have left. VOTE!

Stay tuned for a subsequent discussion about Arizona’s infrastructure story.

14 responses to “The real trick to making America great again

  1. John Huppenthal

    From 1980 to 2008, we brought in 25 million immigrants, primarily from Mexico, Central and South America. The minimum wage in these countries ranges from 50 cents an hour to no minimum wage at all in Venezuela. Immigrants from these countries are people who can’t get jobs even at these wages.

    Our population and middle class have been redefined by this huge population movement.

    If you are going to do a longitudinal analysis, you have make sure you adjust everything by the baseline incomes of these immigrants. Once you do that, the entire picture changes.

    Of course you also have to adjust for the fact that you are and your compatriots are nuclear bombing the population with false compassion. The welfare system has become a massive trap for a large portion of the population which can’t escape it.

    In the 1980’s, 3% of our population was on permanent disability, today that number is at least 7%. That means unemployment is really 10 percent, not 5 percent.

    When Newt Gingrich ended the welfare trap in 1996 in a significant way, half the welfare population poured into the workforce, economic growth took off, the federal budget was balanced and money was available for infrastructure.

  2. John Huppenthal

    Experts agree? Hardly? We are 11 trillion plus off trend on tax revenues. We need to invest in infrastructure but that is an egg and first we need a chicken.

    Things seem bad but they may soon get a lot worse. We have two morons running for president, Sanders and Trump and they are both saying the same thing. They will go to war with china and Mexico on trade.

    When the probability of Obama becoming president hit 70%, the economy collapsed. Now with the probability of trump or sanders being president at over 50%, the stock market has dropped over 10% and the economy might soon collapse.

    Lucas won the Nobel prize in the 90s for rational expectations.

    Our exports to china have risen from 20 billion to over 100 billion and over the next decade will rise to a trillion if these two morons don’t mess everything up. A major trigger for the great depression was embarking on a trade war.

    Economists get well paid and become famous for denying economics. Stiglitz denies that tax rates depress economic growth, Friedman denied that higher taxes and regulation caused the great depression, Kruger denies that the minimumwage reduces incomes for the poor. Diamond denies that higher taxes and welfare reduce the flow of adults into the labor force and into employment. Lucas denies that rational expectations apply to fiscal policy as well as monetary policy. But guess what, in the past, business people could find a way around all these morons and heal the economy that’s not true any more. Escape hatches are limited.

    Tax rates are too high, regulation at 90,00 pages is too burdensme and welfare too comfortable. Its that simple. Reduce tax rates, reform welfare and alliviarte the regulatory burden on small business.

    • Sorry John, but I think you are stuck in a deep, deep right wing rut. Either of us can find data to support just about any position we want to take, the trick is to determine which data is factual. The only thing trickle down economics has done for the vast majority of Americans is to position us at the receiving end of the urinal.

      • It really bothers me to no end that the guy who was in charge of education in Arizona can’t do math, doesn’t know history, and doesn’t “believe” in science.

        Falcon9’s super power is to be impervious to facts.

        Johnny, dear dear Johnny, those 90.000 pages of tax code are almost all escape hatches for the top 1% of the top 1%.

        How many deductions apply to you and me? Mortgage and some medical bill relief, the rest is for billionaires and multi-national corporations.

        Escape hatches are only limited by the amount of money you have to bribe a congressman into slipping something into some unrelated bill.

        Such ignorance.

        • John Huppenthal

          Nothing but sneers based on ideology. What about some evidence?

          Let’s hit it again. In 1980, an adjusted gross income of $80,000 put you in the top 1%. Adjusted for inflation, that is $240,000 in 2008.

          Taxpayers with an adjusted gross income of $240,000 or more paid $500 billion in taxes up from $100 billion in 1980 (both numbers adjusted for inflation). This was despite incurring a much lower tax rate.

          Supply side economics was a spectacular success. Both your sneers are based on the intellectual sludge of economists like Piketty who says that the US and France grow at the same rate.

          From 1980 to 2008, France did not produce a single additional hour of work for the working man and woman. In the US, jobs grew 50% from about 95 million to 140 million and while hour quality declined about 10 percent, we still netted in excess of 35 percent.

          This resulted in household income hugely higher in the United States than in France.

          This is evidence. Big time. Where is yours? Your economists are frauds.

          • In the decades after Roosevelt, the middle class grew and prospered.

            In the decades since Reagan, the middle class has been in decline.

            From the NY Times:
            Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.

            The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

            From Brookings:
            Last month, the Census Bureau released its latest data on wealth, updating earlier figures from 2005 to 2010. The numbers confirm findings from a Federal Reserve Board survey showing unprecedented declines in the net worth of the typical American household. The Census figures indicate a drop of 35 percent between 2005 and 2010 in median wealth-the wealth of the household right in the middle-from $103,000 to $67,000. The estimates from the Federal Reserve show a decline of 28 percent between 2004 and 2010. From 2007 to 2010, median net worth declined by an astonishing 39 percent in three years.

            This loss of wealth surely hurt many people counting on these funds to pay for retirement, children’s schooling, and other needs. Others counted on being able to sell their homes to take advantage of opportunities in other parts of the country but are now underwater on their mortgage and stuck in place. Viewed in context, however, the wealth levels of middle-class Americans are in better shape than these dramatic figures would suggest, though they have not improved markedly over several decades.

            From Business Insider:
            The recent decline of middle class incomes is because almost all of the economic growth since the latest recession has been gobbled up by the super-rich. Large leaps in wealth for the top 5% have masked declines in income for the bottom 95%, giving the appearance that the economic recovery has benefitted all parties.

            Even in good economic times (such as 2001-2007), median household income stayed flat. These trends, says Madland, are 30 years in the making — the result of “trickle down” economic policy and the loss of workers’ economic power to get higher wages.

            From Forbes:
            The biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status. This process, which has been going on intermittently since the 1970s, has worsened considerably over the past five years, and threatens to turn this century into one marked by downward mobility.

            Get some new talking points Falcon9, no one is buying supply side anymore, it’s been discredited.

            You know what discredited means, right?

          • Tom, you’re wasting your time trying to reason here. Thucky is in a special place where none of us can ever go. Not that we’d want to…

      • John Huppenthal

        500 billion up from 100 billion paid by the top 1% is not a trickle, it is a tsunamie. The myth of a trickle is like believing in Santa Claus. Warm and comfortable but false.

        • John, you’re talking about one particular group, what about the other 99% of the country?

          You’re not seeing the forest.

          Wealth is moving from the middle class to the top. The myth of supply side “voodoo” economics is to blame. This is bad for the country. The country does best when everyone participates economically.

          A rising tide lifts all boats, right? The tide is the middle class, and the tide has been going out since Ronnie was in diapers.

          Please tell me where you’re getting your “facts”, I really want to learn.

  3. captain*arizona

    we have term limits in state legislature in the republican fascist police state of arizona what good has that done? demanding good governance from this scum is like demanding nazis stop being nazis. Getting minorities registered and voting will work wonders!

  4. Robert Francis

    It’s time for reasonable term limits and it’s time for the people of this country to understand having such a voice for change means an end to career politicians staying in one place. Perhaps after working in congress they could go back to their states and be a mayor for a change. Or even open their gym or bar. Necessary and reasonable adjustments to their retirement program should follow as well. In my humble opinion this seems like a simple and wonderful way to make America Great again,,,with the people.

    • I mostly agree Robert, but with shorter term limits, you usually end up with career staffers who wield the real power. I personally think the House of Representative term limits are too short. U.S. Representatives have to start fund raising for the next election, the day they get in office and I’ve heard they must raise $5,000 per day. How can they effectively do the job we sent them there to do. Of course, the campaign finance laws are another huge problem we need to solve. No easy answers here, but the ONLY way we can begin to get the change we want is to elect candidates who will do OUR work instead of their own (or those of the wealthy or with special interests.)

      • Food for thought — I’m in the middle of Jane Mayer’s book right now, and just read about how Koch money was behind all the initiatives to impose term limits. The Kochs are a lot of things, but stupid they’re not. There was a reason they wanted term limits.