2008 Election and Infrastructure Investment

Wed, 2009-09-23 22:26

I find it interesting all of the competing priorities that occupy the news and the presidential candidate speeches this fall. There’s the war in Iraq, the war on terror, the domestic economy, healthcare, globalization, oil prices, and the federal budget deficit. I’m sure that there are more. What’s interesting is that I think the focus or the winning solution to many of these issues lies with infrastructure.

Oil Prices & the Energy Crisis: First, it will take massive infrastructure investments in renewables, nuclear, and clean coal to attain the vaunted energy independence. Second, The New York Times reported that investment in high tension power lines is about $48 billion short of what’s needed to transport all of the potential renewable energy that we have in this country and to avoid a repeat of the four-day blackouts that plagued the Northeast. So we invest in our energy infrastructure, and we can solve the energy problem (it will take a while though).

The Federal Deficit: Infrastructure investment pays off in higher collected taxes. So if we invested in our country’s infrastructure (trains, airports, roads, ports, Broadband, etc.), we’d improve our productivity and generate new tax revenue, which should be more than the initial investment and could help pay down our deficit. What has New York City’s ROI been on its 100-year-old subway system?

The War in Iraq: If we weren’t spending $10 billion/month in Iraq, how many power plants, solar arrays, transmission lines, highways, etc. could we build?

The Domestic Economy: Infrastructure investment produces immediate jobs and a long-term benefit. Infrastructure investment should have a more lasting economic benefit than consumer spending oriented rebate checks.

Globalization: Infrastructure investment increases productivity, which makes us more competitive on the world stage. Additionally, if we invest in our energy infrastructure and independence, we could reduce our trade deficit and stop sending nearly $800 billion per year to the Middle East, Russia, and Venezuela.

The only one I’m not sure if infrastructure would help solve is healthcare. But, hey, if infrastructure (especially energy infrastructure) investment can help solve half a dozen of our nation’s most pressing problems, why shouldn’t we advocate it? Another way to think of it, the last major surge of infrastructure investment started in the 1930s and peaked in the early 1950s. It’s time we got serious about it again.