Archive for February 25th, 2011

Friday, February 25th, 2011 | Author: lawrence

Trying to give economic advice to the USA is like trying to give career advice to an alcoholic: until they are ready to pull themselves together, there will be no improvement. Clearly the USA needs to invest more in infrastructure, but much of the public feels otherwise.

Alex Marshall writes about the political battle:

In December, Virginia Gov. Bob McDonnell, a rising Republican star, announced a plan to borrow $4 billion to build more roads, saying, “Right now is the best time in modern Virginia history to get new roads and bridges built,” because of “low construction costs and interest rates in an economy struggling to rebound.” The state, he says, needs to “put people back to work.”

A few weeks before McDonnell made his announcement, another rising Republican star, New Jersey Gov. Chris Christie, announced that his state could not commit $2.7 billion to a new commuter rail tunnel under the Hudson River to New York City, even though the project — 20 years in the making — was already under construction, and the federal government and a bi-state agency, the Port Authority of New York and New Jersey, were paying most of the $8.7 billion cost.

Although Christie campaigned in support of the tunnel, he now says the state cannot afford it, given the potential for cost overruns. Little mention was made of jobs, lower construction costs and the project’s long-term benefit.

What is going on here? Two Republican governors, of similar ideological hues, both elected in 2009, give different rationales for starting and stopping big infrastructure efforts. It’s as if the two lived not only in different states, but also different realities. The governors’ actions are a sign of how political infrastructure building has become. While there was a time when infrastructure efforts were in large part bipartisan, much of it now, particularly when the word “train” is involved, has become tied up with partisan battles about the state’s role in lean economic times.

These lines were in evidence when Ohio and Wisconsin governors-elect, John Kasich and Scott Walker, respectively, pledged to throw more than $1 billion in federal funding back to Washington, D.C., for intercity rail service. Such projects, championed by President Barack Obama, would waste the state’s money in frugal times, they said.

For leaders in state and municipal governments, when it comes to infrastructure spending, the choices are about who to believe and follow. While distinguished economists back deficit spending, angry citizens advocate fiscal restraint. And while China, Western Europe and much of the world build high-speed train lines, they are still unproven in the U.S.