The Foreseeable Future

Even if the optimists are right in arguing that the U.S. economy is experiencing some sort of a rebound (that's a big "if," by the way, that I don't agree with), it doesn't take away from the fact that many other issues are likely to get in the way of a sustainable recovery, now and for the foreseeable future.

Aside from the burgeoning financial crisis in Europe (where an unhappy ending seems assured) and the likely prospect of a severe downturn there and in China as well, there are other factors dimming the outlook. These include our nation's ballooning debt burden, the rapidly rising costs of an aging population, and a financial system that remains largely broken.

Then there are longer-term structural issues, including the cost of bringing the country's infrastructure up to a first world standard. As I (and others) have noted previously, the American Society of Civil Engineers (ASCE), in its 2009 Report Card for America's Infrastructure, gave a grade of "D" to America's bridges, dams, roads, and other infrastructure, and estimated a five-year investment need of $2.2 trillion.

That was almost three years ago. In the meantime, financial Armageddon erupted in spectacular fashion, and money that could have been put to work in a more productive fashion was squandered on bailouts for banks and other boondoggles. That means things are generally no better than they were -- in fact, they appear to have gotten worse. Here are three reports that indicate as much:

"More Broken Bridges than Golden Arches: U.S. Urban Infrastructure Infographic" (PR Newswire)

"There are more deficient bridges in our metropolitan areas than there are McDonald's restaurants in the entire country," stated James Corless, Director of Transportation for America.

T4America's report highlights data from the National Bridge Inventory 2010 research by the Federal Highway Administration (FHWA). Transportation Management System provider CTSI-Global illustrated the recent findings in an infrastructure infographic.

Structurally deficient bridges are defined as "in need of more frequent monitoring and critical, near-term maintenance, rehabilitation or replacement."

How many bridges in U.S. urban areas have been rated as structurally deficient? One in nine.

 

"America's Transport Infrastructure: Life in the Slow Lane" (The Economist)

America, despite its wealth and strength, often seems to be falling apart. American cities have suffered a rash of recent infrastructure calamities, from the failure of the New Orleans levees to the collapse of a highway bridge in Minneapolis, to a fatal crash on Washington, DC’s (generally impressive) metro system. But just as striking are the common shortcomings. America’s civil engineers routinely give its transport structures poor marks, rating roads, rails and bridges as deficient or functionally obsolete. And according to a World Economic Forum study America’s infrastructure has got worse, by comparison with other countries, over the past decade. In the WEF 2010 league table America now ranks 23rd for overall infrastructure quality, between Spain and Chile. Its roads, railways, ports and air-transport infrastructure are all judged mediocre against networks in northern Europe.

...

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.

 

"Failure to Act: The Economic Impact of Current Investment Trends in Water & Wastewater Treatment Infrastructure" (American Society of Civil Engineers)

By 2020, the predicted deficit for sustaining water delivery and wastewater treatment infrastructure will be $84 billion. This may lead to $206 billion in increased costs for businesses and households between now and 2020. In a worst case scenario, the U.S. will lose nearly 700,000 jobs by 2020. Unless the infrastructure deficit is addressed by 2040, 1.4 million jobs will be at risk in addition to what is otherwise anticipated for that year.

The impacts of these infrastructure-related job losses will be spread throughout the economy in low-wage, middle-wage and high-wage jobs. In 2020, almost 500,000 jobs will be threatened in sectors that have been traditional employers of people without extensive formal educations or entry-level workers.23 Conversely, in generally accepted high-end sectors of the economy, 184,000 jobs will be at risk.24 Unless the infrastructure gap is addressed, by 2040 its impacts will put at risk almost 1.2 million jobs within basic sectors, while a relatively stable net amount of 192,000 jobs in knowledge-based industries may be jeopardized. In this latter grouping, approximately 415,000 jobs will be threatened; however, medical services are expected to grow between 2020 and 2040 due to increasing outlays to fight water-borne illnesses.

The impacts on jobs are a result of costs to businesses and households managing unreliable water delivery and wastewater treatment services. Between now and 2020, the cumulative loss in business sales will be $734 billion and the cumulative loss to the nation’s economy will be $416 billion in GDP (Table 3). Impacts are expected to continue to worsen. In the year 2040 alone, the impact will be $481 billion in lost business sales and $252 billion in lost GDP.26 Moreover, the situation is expected to worsen as the gap between needs and investment continues to grow over time. Average annual losses in GDP are estimated to be $42 billion from 2011 to 2020 and $185 million from 2021 to 2040.

Comments

[Tom]

Yeah - amid all the "happy talk" we get from the biased/pro-corporate media no one even talks about this stuff. There have been sinkholes the size of city blocks, gas line explosions (due to old pipes leaking usually) that take out entire streets of homes, and municipalities having to go into hock to provide sewer treatment and we don't hear a peep from the news (because that's just "local" news). We're heading for a crisis any way you look at it - financially, in infrastructure and building degradation, climatically (especially), and via standard of living collapse - and of course they are all interrelated.
Rotsa ruck with yer future Amurika.

[Tom]

Sorry for the double post, but here's today's evidence of "where we're at":

http://www.bbc.co.uk/news/magazine-16037798
Alabama poor cutoff from water

Notice it has to come from the BBC!

[Broken rules]

Global's Story Is a Different Story of Filched Funds

Yesterday Congress held another hearing on MF Global. One representative seemed to suggest that MF Global's movement of money to the UK may have somehow been allowable under Rule 1.25. It was as if a Member of Congress had become Corzine's PR flack, an apologist for Corzine, and was trying to create a false excuse for Corzine. Jon Corzine has been a big Congressional fundraiser and bundler, and it is interesting to see how cheaply some Members of Congress can be bought.

Rule 1.25 wouldn't allow investment in foreign sovereign debt for U.S. dollar accounts, and even if it did, the accounts' assets must be segregated. Rule 1.25 does not allow anyone to filch funds from customers' accounts.

http://www.huffingtonpost.com/janet-tavakoli/rehypothecation-is-an-old_b_1153378.html

[Talking about problems]

Illinois pre-paid collage fund is 30% short. Click here.

The State of Illinois is facing another big problem. College Illinois is not taking on any more clients. More than a billion dollars is invested in the prepaid college program but a study finds the program has a 30 percent shortfall. One reason parents are upset is because they've paid in, but now the money's not there.

Program participant, Jeanne Corrigan is concerned. "In our minds, it was a guarantee, a contract that was backed by the state of Illinois. We fulfilled our part; every month we paid. Our daughter is fulfilling her part of the bargain; she's working hard in school and preparing herself for college and a career."

The Illinois Student Assistance Commission plans to give the governor and lawmakers comprehensive recommendations on fixing the $1.1 billion College Illinois Program. That should happen early next year.

More than 30,000 Illinois families hold contracts in College Illinois, which lets parents lock in tuition costs at public universities years before students go to college.

http://www.kwqc.com/Global/story.asp?S=16314393

[sharonsj]

Instead of fixing our own country, we've poured billions into Iraq and Afghanistan. Instead of rescuing the homeless and foreclosed, we gave trillions under the table to banks domestic and foreign. No wonder there's no money for the rest of us. But the banks continue to squeeze out whatever's left. No wonder governments are failing and people are rioting...soon to come to a theater near you....

[Sad state]

Worse than the Great Depression...people will go hungry...worked out for small %...

Egon von Greyerz (EvG):

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/12/16_Egon_von_Greyerz.html

[Crime spree]

Bill Black Serves Up Some Dante

Now we're doing the same crap: This morning it is reported on CNBC that European banks are buying sovereign debt at 5% coupons and borrowing the money from the ECB at near zero for three years. This is a scam as BASEL allows them to buy these bonds with zero capital!

This is a doomsday trade: If the trade "works" and there is no blowup they'll make more money than they've ever made before. If it blows up the guys on the other side of the trade will get zero because they can't pay. Instead of leverage coming out it's being added!

This crap has to stop.

http://market-ticker.org/akcs-www?post=199270

Dante's Divine Comedy: Banksters Edition

Obama did not explain what Wall Street behavior he found least ethical or what unethical Wall Street actions he believed was not illegal. It would have done the world (and Obama) a great service had he been asked these questions. He would not have given a coherent answer because his thinking on these issues has never been coherent. If he had to explain his position he, and the public, would recognize it was indefensible.

Read more: http://www.benzinga.com/general/politics/11/12/2207682/dantes-divine-comedy-banksters-edition#ixzz1gjn3sQgT

[GoneWithTheWind]

Wow! Structurally deficient bridges during the same time period that states and cities have been raiding the highway trust fund to spend the money on light rail and other public transportation. I'm sure that's coincidence...

[No roads, no escape]

Pennsylvania police officer filmed firing taser at teenage girl - video

CCTV footage shows a police officer pushing a 14-year-old girl against a parked car and firing a taser at her groin. Shortly before the taser was fired the teenager is seen raising her hands in surrender. She received hospital treatment after the incident in Allentown, Pennsylvania

http://www.guardian.co.uk/world/video/2011/dec/15/philadephia-police-taser-girl-video

[Doable Finance]

The poor has the poorest eyesight. In the political spectrum, they will never be able to see, not in present, not in future. They can't even see in the past.

[Billybob]

US gov has duped it's citizens. All monies now go to the military, medical, and banking industrial complexes. Socialism for the elites and crumbs for the rest.

.gov HAS been waging class warfare big time since Reagan. Now the velvet glove is gone and all we hear is the iron fist of cutting everything in sight (except the social programs for the oligarchs).