Portraits of a nation in decline. An unnecessary and easily fixed decline.

Summary:  Many important stories can be told simply, sometimes even in pictures. So it is with one aspect of America’s decline. Our decisions and the results are easily shown in this post. Fortunately we hold elections every two years, should we wish to organize and change the direction of America’s public policy — and put America back on the path to prosperity.

It need not be like this.

Contents

  1. A portrait of a nation in decline
  2. Another portrait of a nation in decline, showing the cause
  3. Here we see madness
  4. Portrait of a well-managed rival
  5. For More Information

(1)  A portrait of a nation in decline

Here we see a sinkhole in bankrupt Harrisburg PA (story here), one of the worst among the many America cities unable to pay for maintenance of their infrastructure.  Since many cities underfund their infrastructure, this will become an increasingly common story during the next decade.

By Donald Gilliland, The Patriot-News
By Donald Gilliland, The Patriot-News

(2)  Another portrait of a great nation in decline

This graph shows non-defense public investment by local, state, and Federal government as a percent of GDP. This underfunding is what allowed America’s once fine infrastructure to decay into the shabby decay that one sees today across much of America.

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This portrait shows three phases of public investment since WWII, which we line up well by the Presidents then in office:

  1. Building a great nation: Eisenhower, Kennedy, Johnson — high rates of investment in America.
  2. Starving the beast (ie, induced anorexia to produce a weak nation with low taxes): Nixon, Ford, Reagan (with a brief interruption by Carter)
  3. Slow rebuilding:  Bush Sr, Clinton,  Bush Jr
  4. A burst of activity, then resumed starvation (ie, slashed investment, lower taxes):  Obama

To see the result, read the Report Card for America’s Infrastructure by the American Society of Civil Engineers. See their descriptions of a great nation allowed to decay. From their 2009 report:

The 2009 Report Card for America’s Infrastructure grades 15 categories of infrastructure, including a new category: levees. For the second time, America’s infrastructure rates a cumulative grade of D. While not all categories fare as badly or are plagued by the same problems, delayed maintenance and chronic underfunding are contributors to the low grades in nearly every category.

We must do these repairs eventually.  The 2009-2012 period was the ideal time to start.  But instead…

(3)  Here we see madness

Same data as above, but from 2000 through July 2012. A brief surge of investment in shovel-ready projects, then starvation of investment back to near the insane lows of the Reagan Administration. A decaying infrastructure, unemployed workers, and the ability to borrow for long-terms at lifetime low rates — so our leaders decided to slash spending.  It’s most important to them that the 1% pay taxes at multi-generational low rates (far below those during the years of rapid growth after WWII).  One must have priorities.

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(4)  Compare with a well-manged rival

China unveils ‘world’s fastest train’“, AP, 27 December 2009:

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STR/AFP/Getty Images

Chinese workers put the final touch on the interior of a new Railway Station in Wuhan, central China’s Hubei province on December 24, 2009.

China plans to build 42 high-speed railway lines by 2012 in a massive system overhaul that is part of efforts to spur economic growth amid the global downturn, state media have reported.

Many economists, closely counting the beans, proclaim China to be over-investing.  Certainly that’s true.  Just as Britain and America did in the 19th century, producing the boom-bust investment cycles in canals and railroads. For example, the Transcontinental Railroad was a boondoggle in purely accounting terms. It required massive subsidies to build, and annually for many years afterwards. But the benefit to the nation was well-worth the money.

Similarly, China is building a world-class transportation system when it costs little, with land and labor cheap.  While there might be no return for several decades, they’ll benefit from this investment for many generations.

Who would you bet on? A nation allowing itself to decay? Or one with exuberant confidence in its future, and willing to spend money to build that future? That was us, and is China today.

(5)  For More Information

  1. Obama proposes a new New Deal – like Japan, will we burn money to keep warm?, 8 December 2008
  2. Everything you need to know about government stimulus programs (read this – it’s about your money), 30 January 2009
  3. Government economic stimulus is financial heroin, 28 December 2009
  4. The evolution of the Republican Party has shaped America during the past fifty years, 8 May 2010 — Origin of the “starve the beast” policy.

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