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* From the Economist…
Total public spending on transport and water infrastructure has fallen steadily since the 1960s and now stands at 2.4% of GDP. Europe, by contrast, invests 5% of GDP in its infrastructure, while China is racing into the future at 9%. America’s spending as a share of GDP has not come close to European levels for over 50 years. Over that time funds for both capital investments and operations and maintenance have steadily dropped (see chart 2).
Although America still builds roads with enthusiasm, according to the OECD’s International Transport Forum, it spends considerably less than Europe on maintaining them. In 2006 America spent more than twice as much per person as Britain on new construction; but Britain spent 23% more per person maintaining its roads. […]
The Congressional Budget Office estimates that America needs to spend $20 billion more a year just to maintain its infrastructure at the present, inadequate, levels. Up to $80 billion a year in additional spending could be spent on projects which would show positive economic returns. Other reports go further. In 2005 Congress established the National Surface Transportation Policy and Revenue Study Commission. In 2008 the commission reckoned that America needed at least $255 billion per year in transport spending over the next half-century to keep the system in good repair and make the needed upgrades. Current spending falls 60% short of that amount.
And the accompanying graph…
Discuss.
* Business roudup…
* ADDED: Move made to exempt bakeries from artificial trans fat ban
* ADDED: Editorial: Give craft brewers an exemption
* Amtrak can’t get new cars fast enough - Rail line to receive $286M fed grant: Additional rail cars and locomotives can’t come soon enough on three Illinois Amtrak lines expected to carry well over 1 million passengers this year, a spokesman said Monday… According to an Amtrak study released in February, the average rail passenger car in Illinois has traveled 2.5 million miles and is 20 to 21 years old.
* Caterpillar CEO tells industry to lobby Quinn on biz agenda: Noting that Illinois’ workers’ comp rate is seven times that of Indiana’s, Mr. Oberhelman said lawmakers must rewrite the law so it protects only workers hurt on the job. He also said the state should adopt the American Medical Assn.’s physician guidelines for compensation settlements, which are used by 37 states. “Those are two things we’re very close on,” he said.
* Transit agencies fear ‘loophole’ in tax bill: Addison Mayor Larry Hartwig is among numerous local mayors also concerned about losing revenues. Rival downstate counties are wooing suburban businesses with low taxes and promises of rebates, he said. And that’s unfair to towns that provide roads, police and fire protection and snowplowing to companies that send their tax dollars elsewhere.
* Whitley: Time is now to rebuild Illinois economy
* Courts see fit to certify window class-action suit - Pella case includes consumers who have not suffered any financial damages but may in the future
* Home sales in Chicago area fall in first quarter
* Smaller towns looking to lure in tourists
* Fox cancels ‘The Chicago Code‘
* Illinois to lift smoking ban at casinos?
posted by Rich Miller
Wednesday, May 11, 11 @ 7:49 am
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If you spend time in other developed and even developing nations one notices the infrastructure differences over the years. The Economist article is dead on in identifying the deterioration in America. It used to be the rest of the world that looked shabby. Now it is us. It is more than an embarassment. Its a tragedy. We don’t need high speed rail, we need more regular and widespread normal passenger rail along with bridges that don’t fall down.
Comment by cassiopia Wednesday, May 11, 11 @ 7:58 am
Not surprising that U.S. spends relatively more on new construction, vs. maintenance. It’s more challenging and fun to build new roads than to repair and maintain old roads. (No engineer ever won an award for fixing a road.)
Comment by Sir Reel Wednesday, May 11, 11 @ 8:05 am
Not surprising and it shows when you visit Europe. Europe also invested in rail service during the oil crisis in the seventies. It’s nice to be able to go just about anywhere/on-time by passenger rail. I take Amtrak often and have gotten to know many of the employees. They tell me there is no money for repairs on aging cars and they are left with no real explaination for broken seats, heating/cooling problems, out of service rest rooms, etc.
Comment by Way Way Down Here Wednesday, May 11, 11 @ 8:27 am
Any day now the invisible hand of the free market will show itself and make it all better. Right?
Comment by MikeMacD Wednesday, May 11, 11 @ 8:37 am
On the federal level, we’ve been cutting taxes while fighting two wars for a decade and borrowing like crazy. Hard to see where infrastructure money is going to come from.
Comment by wordslinger Wednesday, May 11, 11 @ 8:42 am
Hey Economist! Have you been watching Inspection America on the History channel? That guy has been screaming about the America’s infrastructure problem. His estimate: $22 Trillion to make it right.
The Economist may have numbers, but the show shows just the tip of the deterioration of America. Give a watch to get a glimpse of the neglect. It’s mind-numbing.
Comment by PaGo Wednesday, May 11, 11 @ 8:44 am
It’s easier to put a politician’s name on a new road than to change the name of an existing road named after a politician. Perhaps we should sell the naming rights to highways, how about the US Cellular Freeway?
The sex appeal of new construction is almost irresistible when compared to the mundane task of maintenance. In addition, the highway, and its associated bridges, suffer from the fact that they are used by the dreaded automobile.
Environmentalists are always throwing their support to mass transit and high speed rail, which will need taxpayer subsidies in perpetuity for not only rail maintenance, but operating costs. Until we except the physics of transpiration (there is no better and economic mobile fuel than gasoline), acknowledge that we are an enormous country (compared to European countries), and realize that there is no viable alternative to moving people and goods around the US other than roads, we will see this problem forever.
Comment by Cincinnatus Wednesday, May 11, 11 @ 8:44 am
- MikeMacD - Wednesday, May 11, 11 @ 8:37 am:
“Any day now the invisible hand of the free market will show itself and make it all better. Right?”
How can that happen, Mike? The transpiration and energy markets suffer from the heaviest hand of government regulation. I believe this is a result of their being around for so long. We are already seeing the intrusion of government into the newer fields of modern communications and the internet, among our most vibrant industries that have been relatively free of government regulations, and where market forces have been allowed to operate. Their advantage is coming to an end as the “people who know better than you” begin their fiddling.
More directly to your point, have you driven on either the Ohio or Indian Turnpikes lately? They’re way better than the Kennedy, the Tri-State, I-88 and even I-355 (our newest highway).
Comment by Cincinnatus Wednesday, May 11, 11 @ 8:50 am
Roads? Roads may be important, but what about bridges and especially clean water delivery? America’s underground water and sewage systems seems to get lost in the infrastructure debate/discussion. How would you feel about not being able to take a shower every morning?
Comment by PaGo Wednesday, May 11, 11 @ 8:52 am
==Environmentalists are always throwing their support to mass transit and high speed rail, which will need taxpayer subsidies in perpetuity for not only rail maintenance, but operating costs==
As opposed to the myriad U.S. highways, which rely solely on user fees and private funding, right? Or are roads magically maintained with Laffer-esque pixie dust?
I don’t hear anyone, anywhere, suggesting that rail would replace roads. But a much more expansive rail network (including both intercity and intracity rail) certainly could supplement the highway system.
Comment by The Doc Wednesday, May 11, 11 @ 8:58 am
Cincy–
Roads and highways don’t pay for themselves either. They get “subsidies in perpetuity.” Airports don’t pay for themselves. They get “subsidies in perpetuity.” Locks and dams. Bridges. You name it.
You just don’t like trains, so they shouldn’t get the subsidies all other forms of infrastructure get. Just admit it.
Comment by Ray del Camino Wednesday, May 11, 11 @ 8:59 am
I have no problem with maintaining rail lines as part of public expenditures. There is a major problem when one needs to subsidize operating expenses. There is only one commuter rail line I know that runs at a profit (in the densely populated NE corridor), all others run at enormous losses.
Comment by Cincinnatus Wednesday, May 11, 11 @ 9:06 am
Paraphrasing from the Ohio Turnpike Commission:
The maintenance, operation and security of the Ohio Turnpike are funded almost exclusively through tolls - NOT TAXES. State taxes pay for other roads and interstates in Ohio, not the Turnpike. The Ohio Turnpike receives NO federal funding and only a small portion of state tax ($0.05 per gallon from gasoline purchased ONLY at service stations on the Turnpike.) The small portion of state tax money received by the Ohio Turnpike Commission is specifically allocated to the maintenance and repairs of the bridges and overpasses that are state routes. Turnpike tolls serve as a user fee and only those who use the Turnpike pay for it.
Tollways don’t work in all instances, obviously. But these types of roads can have at least some of their funding shifted to the users of the highway.
Comment by Cincinnatus Wednesday, May 11, 11 @ 9:10 am
- Until we except the physics of transpiration (there is no better and economic mobile fuel than gasoline) -
I’m starting to have a hard time believing you actually went to school for engineering. But then again, apparently it wasn’t economics or English either. Petroleum has the highest energy concentration among common fossil fuels, yes, but that doesn’t make it the best, and it certainly doesn’t make it the most economic.
- The transpiration and energy markets suffer from the heaviest hand of government regulation. -
Yes, I’m sure if it weren’t for the government we’d have privately funded highways to the moon by now.
Comment by Small Town Liberal Wednesday, May 11, 11 @ 9:19 am
If you read the entire Economist article, it takes the United States to task for its failure to properly fund all modes of transportation - roads, rail, air. Its comparison to other nations is a stark reminder of how far we are falling behind in each of these modes.
As to “subsidy,” the fact is that Tollways are paid entirely by user fees (including our own unfairly maligned Tollway system). And as to the interstate system, until very recently it too was paid for entirely by user fees - namely the gas tax. (save the argument about how much it costs to fight for oil in the Mideast - petroleum happens to be used in making just about everything we consume). That the GRF has been used recently only points to the fact that (1) the gas tax is static and has not been increased since 1993, which means purchasing power is off by 40%; (2) our nation continues to grow, and new lanes are added, further burdening a shrinking revenue source; (3) some of the gas tax is used for non-highway purposes, including transfers to transit, enhancement programs (e.g. bike lanes), and even some for “deficit reduction” in a deal struck back in the early ’90’s.
To the Republicans who oppose raising the gas tax, I would remind you that it was Ronald Reagan himself who gladly signed the Surface Transportation Assistance Act of 1982, which increased the federal gasoline and diesel tax by five cents per gallon (the first increase since 1961). The added revenue helped reverse the 1970s trend that saw our highways and bridges deteriorating faster than they could be repaired.
President Reagan said as he signed the legislation that “Common sense tells us that it will cost a lot less to keep the system we have in good repair than to let it disintegrate and have to start over from scratch. Clearly, this program is an investment in tomorrow that we must make today.”
Folks, it’s tiresome to read the online fights over which transportation mode is “better.” All are needed to keep the United States competetive, vibrant, and, yes, green. Let’s keep our eyes on the ball here.
Comment by phocion Wednesday, May 11, 11 @ 9:34 am
- Tollways don’t work in all instances, obviously. But these types of roads can have at least some of their funding shifted to the users of the highway -
Illinois doesn’t have tollways? Dang, why did I buy that Ipass gizmo? But I think you’re right, every time I drive down 57 south of Mt. Vernon, I think to myself “If only every car on this road paid a toll of ~$2000, this highway wouldn’t require any other tax dollars!”
Comment by Small Town Liberal Wednesday, May 11, 11 @ 9:36 am
* Fox cancels ‘The Chicago Code‘
I’m sure that Alderman Gibbons is behind this.
Comment by Leave a light on George Wednesday, May 11, 11 @ 9:54 am
There are too many power blocs who want spending in other areas, and legislators who do their bidding.
Comment by 42nd Ward Wednesday, May 11, 11 @ 10:24 am
=== Noting that Illinois’ workers’ comp rate is seven times that of Indiana’s, Mr. Oberhelman said lawmakers must rewrite the law so it protects only workers hurt on the job. ===
The premium rate is $3.05 in Illinois and $1.16 in Indiana, according to a national study.
What Oberhelman leaves out is that Indiana places a lifetime cap on benefits for injured workers of $350,000…so yeah, if you can get away with completely disabling a guy at age 25 and paying him an average of $8,333 a year until he qualifies for social security — at which point he’ll ONLY have social security of course because he won’t qualify for a pension — then yeah, you are going to save a lot of money.
The same national study noted “Employers can reduce their workers’ compensation rates through accident prevention, safety training, and by helping injured workers return to work quickly.” Three things that are not included in any legislation being proposed by employers. Go figure.
North Dakota has the lowest worker’s compensation premiums in the country. Their secret? Worker’s compensation insurance is provided through state government, just like unemployment insurance - with no for-profit insurance providers - and they place a big emphasis on workplace safety.
Comment by Yellow Dog Democrat Wednesday, May 11, 11 @ 10:33 am
BTW, the History Channel did a great series about America’s crumbling infrustructure, featuring an interview with CUB Executive Director David Kolata.
It was pretty fascincating.
There are cities in the Northeast whose water lines are so bad that they lose as much as 20% of their fresh water supply through leaky pipes.
Insane.
Comment by Yellow Dog Democrat Wednesday, May 11, 11 @ 10:37 am
When it comes to infrastructure, our parents and grandparents were more willing than we are to tax themselves for future generations.
Some research suggests that as diversity grows, so does resistance to public spending.
Comment by reformer Wednesday, May 11, 11 @ 11:16 am
* Fox cancels ‘The Chicago Code’
My wife will be heartbroken.
Comment by Yellow Dog Democrat Wednesday, May 11, 11 @ 11:36 am
- Yellow Dog Democrat - Wednesday, May 11, 11 @ 11:36 am:
* Fox cancels ‘The Chicago Code’
“My wife will be heartbroken.”
My wife liked it too, but I think for an unusual reason. Not being born here, she never really could get her head around the lay of the land in the city. The outdoor shots, and especially the opening sequence, helped her understand where differnt areas were (she recognized various landmarks), and was getting to the point where she would question the errors in geography (the most frustrating thing about the show).
Comment by Cincinnatus Wednesday, May 11, 11 @ 11:47 am
@Cincy -
My wife liked it because the wardrobes, dialogues, dialects and plot lines all reminded her of New York City.
In fact, aside from the shots of Chicago in the opening and the fact that, for some reason, undercover cops and their handlers always choose the lakefront at McCormick Place to meet to discuss ‘ops’ (it IS a nice view of the skyline), the whole thing could have been based in NYC.
Comment by Yellow Dog Democrat Wednesday, May 11, 11 @ 12:02 pm
I loved Chicago Code, always enjoyed recognizing the locations. The plot arcs were good, I liked the shooting and editing, the acting was great. Ironic to lose the show the same week Quinn promotes a new studio in town. But this is probably mostly about what (redacted) the FOX executives are (I am still burned about “Firefly”). Dose guys should get a tune-up for canceling what may have become the next “:Hill Street Blues”. They renewed “The Cleveland Show”, but not this??? Maybe the show will get picked up by another network like USA, which keeps building steam by picking up well-written and offbeat shows stressing character.
Comment by Gregor Wednesday, May 11, 11 @ 12:37 pm
@Rich -
BTW, I think you and the Daily Herald both buried your lead:
“(Illinois Chamber President Doug) Whitley praised Gov. Pat Quinn’s attentiveness to business concerns in contrast to that of Rod Blagojevich, he argued that the way to retain businesses is not through $100 million incentives as in the case of Motorola Mobility Inc., but by the creation of a vibrant economy with a level playing field.
Whitley could not speak to the specific issues involved in both AT&T and Sears’ recent announcements about the possibility of their leaving their Hoffman Estates campuses. But he suggested AT&T’s decision is being triggered by the dramatic changes within its own industry which have already reduced the workforce at its Midwest headquarters.”
Whitley’s leading the overthrow of the Corporate Overlords - i LOVE IT!
Comment by Yellow Dog Democrat Wednesday, May 11, 11 @ 12:53 pm