Sunday, March 28, 2021

New Infrastructure Will Not Come Good, Fast, And Cheap

Anyone naive enough to think America is about to receive a big gift of newfangled "fixed installations" needed in order to function should look long and hard at what is really being proposed. The "underlying structure" a country and the economy rely upon includes things such as roads, bridges, dams, water and sewer systems, railways and subways, airports, and harbors. None of these things are cheap to construct and when it comes to infrastructure the words, good, fast, and cheap should never be clustered together. While many people see government spending on infrastructure as a job creator and a silver bullet for our ailing economy I would like to raise a word of caution, things are not that simple. The cynical part of me thinks the American people should get ready to get bent over and taken advantage of.

Spending Trillions Likely To Result In An Epic Fail

Now that Biden's massive Covid-19 relief package has been signed into law, talk is moving towards what is next on the agenda, That's where, most likely, his infrastructure plan resides, and this is a plan set to explode the budget. If you think that $1.9 trillion is a lot of money, it pales next to what the Democrats are going to propose as they continue on their spending spree. It appears that Biden wants $3 trillion or more which should scare away moderates such as West Virginia's Joe Manchin but it has not. Not only has Manchin not blinked at $3 trillion in new spending instead, he recently stated Congress should do “everything we possibly can” to pay for it. He said there should be “tax adjustments” to former President Donald Trump’s 2017 tax law to boost revenues, his endorsement of raising the corporate rate from the current 21 percent to at least 25 percent, however, would do little.

The debate over how much we need to spend and on what, could go on for ever but this is not the answer. Please note, this is not "free money" but that message is likely to be ignored in the same way a great deal of the population fails to appreciate that most of the $1.9 trillion has yet to be spent. An example is how screwed up this flow of money can be is apparent in Fort Wayne, Ind. the city announced only days ago it had  hired Homebase, a nationally recognized consulting firm to evaluate “the state of homelessness” in the city and layout a plan to address it. The project should take nine months, the city said. (Funding came through the CARES Act passed in late March of 2020.)

Many people seem to see money flowing from Washington, such as this infrastructure bill, as not costing us anything because the bill is shrouded with the message the project will more than pay for itself over time by creating greater growth. The problem is that when it comes to such spending, politicians often prefer to use such funds on what they view as legacy projects that will shape the future of their area or shiny pet projects that will enrich their cronies. Many of these tend to be rather wasteful and controversial and it is not uncommon to see them plagued by cost overruns.

In truth, when it comes to infrastructure, the Democrats and Republicans are not on the same page. While Republicans may be willing to spend federal money on things like highways, bridges, and airports, many Democrats are interested in using much of this money to build what they call "green infrastructure " and promoting clean energy or things such as electric vehicles. In short, Democrats wish to use this money in a giant experiment to create what they hope will be a more sustainable world. Instead, we should prepare to see more "bridges to nowhere" and wasted spending exists than most taxpayers can imagine.


  1. Throw on top of the Ponzi-type structure of our economic/financial/monetary systems the finiteness of our resources (especially energy) and the dilemmas get even more complex and problematic. We are 'building' up to an epic boom that precedes the catastrophic collapse witnessed throughout pre/history in complex societies that overreach and overspend.

  2. Hi,

    nice blog. Any chance to support an RSS feed, too?

  3. I often wonder how far into its decline, Rome continued with its expanding infrastructure? The overlooked costs of long term maintenance is the inherent flaw in every infrastructure project. All of the sanitation systems alone put in place in the last 50 years are coming up on their expiration date. Repairing or replacing them will not add to expansion of wealth but rather maintain the status quo.