Tag Archives: infrastructure

The annual Budget Games begin: Trump vs. Congress to control spending

Summary: Now that the Anything But Issues election is over, the media realize that there are issues other than racism and sexism — and debates other than those over the ephemera that dominated the election. Alexander Bolton of The Hill kicks off serious coverage of the Trump administration with “Deficits could stand in the way of Trump’s agenda“. It’s a powerful sequel to yesterday’s post, See the warnings about Trump’s infrastructure plan. It’s betraying populism.

Remember all those GOP tirades about Obama’s deficits?

The GOP majority seems unlikely to allow the fantastic deficits necessary to fund Trump’s promised hat trick of programs: more money for America’s already massive military, rebuilding America’s infrastructure, and tax cuts for the rich. Unfortunately for the 1%, the Federal government doesn’t spend enough on the poor to feasibly balance the budget on their backs. Congress seems likely to fully fund only increases for the military (fertilizing the MIC money tree) and tax cuts for their 1% paymasters.

Net impact on America: zero, leaving only debts for the future — much like the Reagan and Bush Jr. deficits. The tax cuts of those two Presidents came close to wrecking the government’s solvency. Third time’s the charm!

When reading this, remember that a properly led Congress is the most powerful branch of the Federal government. A President inexperienced in managing Congress further boosts their power.

Excerpt from “Deficits could stand in the way of Trump’s agenda
by Alexander Bolton at The Hill.

“Trump called during the campaign for a $1 trillion infrastructure package, $5 trillion in tax cuts, increases in military spending and the repeal ObamaCare, which could cost more than $350 billion over 10 years. At the same time, the president-elect has promised “not to touch” Social Security or make cuts to Medicare.

“…’We did not hear anything about entitlement reform from either of the candidates, and that’s a serious issue,’ said Michael Sargent, a research associate at The Heritage Foundation. ‘You cannot address the growth in spending without addressing entitlement issues.’

”…Congressional Republicans assailed President Obama early in his tenure over soaring federal deficits, which exceeded $1 trillion dollars during his first four years in office. Debt reduction was the main focus of GOP leaders after they took back control of the House in 2010.

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See the warnings about Trump’s infrastructure plan. It’s betraying populism.

Summary: US stocks have risen since the election on expectations that Trump will bring massive debt-financed infrastructure spending and tax cuts for the rich (with droplets for everyone else). As we learned from the Reagan and Bush Jr. programs, we should beware the details. These articles warn what to expect, giving us time to fight back.

Donald Trump digging

Donald Trump breaking ground for new hotel in Washington, 23 July 2014. Photo: Evan Vucci, STF/AP.

“Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement,” he says. “It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.”
— Steve Bannon, Trump’s Chief Strategist, in The Hollywood Reporter.

This massive infrastructure plan sounds alluring, like debt-funded tax cuts. Ronald A. Klain warns us about the probably results: “Trump’s big infrastructure plan? It’s a trap.” To understand why, see the details in “Trump Versus Clinton On Infrastructure” by Peter Navarro (prof of economics and public policy at UC-Irwin) and Wilbur Ross (billionaire LBO entrepreneur) — both senior advisors to Trump. Paul Krugman gives the summary (read it in full).

Trumpists are touting the idea of a big infrastructure build, and some Democrats are making conciliatory noises about working with the new regime on that front. But remember who you’re dealing with: if you invest anything with this guy, be it money or reputation, you are at great risk of being scammed. So, what do we know about the Trump infrastructure plan, such as it is?

“Crucially, it’s not a plan to borrow $1 trillion and spend it on much-needed projects — which would be the straightforward, obvious thing to do. It is, instead, supposed to involve having private investors do the work both of raising money and building the projects — with the aid of a huge tax credit that gives them back 82 percent of the equity they put in. To compensate for the small sliver of additional equity and the interest on their borrowing, the private investors then have to somehow make profits on the assets they end up owning.

“You should immediately ask three questions about all of this. … All of these questions could be avoided by doing things the straightforward way: if you think we should build more infrastructure, then build more infrastructure, and never mind the complicated private equity/tax credits stuff. You could try to come up with some justification for the complexity of the scheme, but one simple answer would be that it’s not about investment, it’s about ripping off taxpayers.

We have recent experience with this strip-mining of the public for private gain: the privatization of education, including the student loan business. Rana Foroohar reviews seven new books about this at the New York Review of Books.

“When the financial industry — banks, hedge funds, loan companies, private equity — gets too involved in any particular activity of the economy or society, it’s usually time to worry. The financial sector, which represents a mere 4% of jobs in this country but takes a quarter of all private sector profits, is like the proverbial Las Vegas casino — it always wins, and usually leaves a trail of losers behind.

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China takes the lead in supercomputing while America sleeps

Summary: The Apollo program demonstrated America’s superpower status in the 1960’s. Today’s contests are more diffuse, such as the race to build the most and largest supercomputers. China has moved into the lead in this, another milestone in its quest to again become the Middle Kingdom. Helping in their quest is America’s unwillingness to invest in itself, preferring to fund the 1%, a massive military, and foreign wars.

Sunway TaihuLight Supercomputer

China’s New Supercomputer Puts the US Even Further Behind

By Brian Barrett, Wired, 21 June 2016 — Excerpt.

“This week, China’s Sunway TaihuLight officially became the fastest supercomputer in the world. The previous champ? Also from China. What used to be an arms race for supercomputing primacy among technological nations has turned into a blowout.

“The Sunway TaihuLight is indeed a monster: theoretical peak performance of 125 petaflops, 10,649,600 cores, and 1.31 petabytes of primary memory. That’s not just “big.” Former Indiana Pacers center Rik Smits is big. This is, like, mountain big. Jupiter big.

“TaihuLight’s abilities are matched only by the ambition that drove its creation. Fifteen years ago, China claimed zero of the top 500 supercomputers in the world. Today, it not only has more than everyone else — including the US — but its best machine boasts speeds five times faster than the best the US can muster.

“…Its 10.6 million cores are more than three times the previous leader, China’s Tianhe-2, and nearly 20 times the fastest U.S. supercomputer, Titan, at Oak Ridge National Laboratory. ‘It’s running very high rates of execution speed, very good efficiency, and very good power efficiency,’ says University of Tennessee computer scientist Jack Dongarra. ‘It’s really quite impressive.’  {Its peak power consumption under load (the HPL benchmark) is 15.37 MW, or 6 Gflops/Watt. It would have taken the #2 spot on the November 2015 Green500 list.}

“…TaihuLight is faster than anything scheduled to come online in the US until 2018, when three Department of Energy sites will each receive a machine expected to range from 150 to 200 petaflops. That’s ahead of where China is now — but two years is half an eternity in computer-time.

“…The other significant TaihuLight achievement stings US interests even more, because it’s political. China’s last champ, Tianhe-2, had Intel inside. But in February of 2015, the Department of Commerce, citing national security concerns — supercomputers excel at crunching metadata for the NSA and their foreign equivalents — banned the sale of Intel Xeon processor to Chinese supercomputer labs.

“Rather than slow the rate of Chinese supercomputer technology, the move appears to have had quite the opposite effect. ‘I believe the Chinese government put more research funding into the projects to develop and put in place indigenous processors,’ Dongarra says. ‘The result of that, in some sense, is this machine today.'”

—————————- End excerpt. —————————-

The operating system is a Linux-based Chinese system called Sunway Raise. Bloomberg gives more detail about this remarkable achievement by China.

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Watch other nations build infrastructure for 21st C prosperity. We can, too.

Yesterday the BBC wrote about the “Swiss Gotthard rail tunnel – an engineering triumph“, the world’s longest and deepest rail tunnel — part of a massive project to build world-class rail network for Switzerland.  It included a typical graphic for these kind of articles. Note what major nation does not appear on the list, and seldom appears on these lists.

Worlds longest tunnels

There have been many such articles lately, as nations upgrade their infrastructure for success in the 21st century. They build tunnels, fiber optic networks, high speed trains (fast, reducing pollution), etc. America appears in few of these stories.

News about America’s infrastructure has a different tone. “Why the U.S. Has Fallen Behind in Internet Speed and Affordability“.  CNN reports that damaged pipelines are a ‘ticking time bomb’, “the busiest rails shut down by failing power cables”, and “Bridges supported by crumbling 90-year-old beams.” You can use this interactive tool to see the Sorry State of America’s BridgesUS Airports are Awful; Here’s the problem.

And so forth, and each year brings forth new stories about the results of our underinvestment in critical public infrastructure. Visitors to America often remark about our decrepit third-world-like infrastructure for transportation and communication, while Americans exult over our shiny new weapons.

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Four graphs showing a nation in decline. An unnecessary and easily fixed decline.

Summary:  We mock China for their over investment in infrastructure. Gleaming new factories, high-speed trains, subways. Foolish ants. Exceptional America does it better. As a third in this series, we look at some pictures of how much America invests in itself.  These are snapshots, not a comprehensive assessment. Still, they tell a chilling story.  We can fix this; it takes only our wisdom and will to do so.  Probably new leaders, too.

“In a field one summer’s day a Grasshopper hopped about, chirping and singing. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest. …”


  1. Corporate profitability
  2. Business Investment
  3. Government Investment
  4. Government investment in infrastructure
  5. For More information

These graphs show totals as a per cent of GDP.  All of the investment graphs show declines.
(1)  Corporate Profits After Tax (without IVA and CC Adjustments)

The growth and level of US corporate profits are exceptional.  What did the CEOs’ cut to produce these profits? Among other things, wages and investment. It’s the sort of short-term thinking that has come to characterize American business. It produces a lavish bloom of profits, but long-term decay for America.

% GDP: Corporate profits

% GDP: Corporate profits

(2)  Net domestic investment by domestic businesses

This does not include overseas investment by US businesses.

% GDP: Net domestic business investment

% GDP: Net domestic business investment

(3)  Net domestic investment by Government

A nation works only as well as its public infrastructure.   Let’s hope elves come to fix ours tonight.

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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.


  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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A look at the future (it’s already here, but it’s not in the USA)

Summary:  Compare and contract this key difference between China and America.  Between future prosperity and failure.

(1)  Infrastructure in America

From the executive summary of “The 2009 Report Card for American Infrastructure”, published by the the American Society of Civil Engineers (ASCE):

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. 

Update:  “Third world America“, Macleans, 14 September 2010 — “Collapsing bridges, street lights turned off, cuts to basic services: the decline of a superpower.”

(2)  Infrastructure in China

From “China: A future on track“, Financial Times, 23 September 2010 — Photo of the new railroad station in Wuhan (central China):

Other posts about China

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