Lyndon Furst's
A Different Perspective
"The Problem With Building Infrastructure"
POSTED 7/19/09
The Problem With Building InfrastructureÂ
In a recent column, I wrote about the good old days when our great state of Michigan tasted the fruits of prosperity. Industry, and especially the automobile industry, was booming. Corporations made good profits and, through the efforts of strong labor unions, those who did the productive labor from which those profits were made were able to get a reasonable share in reward for their hard work. With high wages for unskilled labor, demand for consumer goods soared. Lending institutions saw a golden opportunity to increase their share of the market and relaxed credit restrictions resulting in a major increase in home ownership. The value of real property increased dramatically in the state.
Both state and local governments, through a system of rigid taxation, shared in the economic good times. Popular governor "Soapy" Williams embarked on a spending spree aimed at building the infrastructure of the state. He had the money at his disposal so he might as well spend it. The same was true of the federal government under the guidance of equally popular president, Dwight Eisenhower. The interstate highway system was one of the results of that major government spending so long ago. Other projects included government office buildings, prisons, schools, and bridges. The Governor was proud of his record of investing in the infrastructure of our wonderful state..
But that was then; now is a different time. All that wonderful infrastructure has aged and needs either major repair or replacement. Crumbling buildings, potholes in the roads and rusting bridges are no longer symbols of pride for either the state or our nation. Something must be done, but where will the money come from? Michigan, like most of the other states is broke. Employment, especially in manufacturing, is down. Way down. Wages are dropping and high pay for unskilled labor is a thing of the past. Home ownership is shrinking as foreclosures reach record levels. Thus, both state and local government revenues have decreased at a rapid pace.
So, the question lingers: how will state government pay for upgrading its basic infrastructure? From my perspective, that is a question that should have been considered long ago. One of the major problems with building infrastructure is that maintaining it generates costs far into the future. Unfortunately, that is a situation that is seldom considered by organizations, either public or private, when they launch major building projects. It is one thing to build a magnificent structure, it is quite another to maintain it in perpetuity. Thus, public organizations such as state and local government should consider maintenance and repair (and even replacement) when any new capital investment is being contemplated.
A second problem with public building projects is that availability generates need as well as expectation. Before the first four lane highways were constructed people had no need for them. However, once they began to be common, everyone saw the need and expected the government to provide them across the nation. Now we are used to traveling quickly around the country and will never be satisfied with the old system of two lane highways. But the system is in need of major repairs and that requires tax money. No one thought about that when they were built so long ago. Maybe we should have!
To my faithful readers: don’t panic. I am not suggesting that government should never invest in infrastructure projects. My purpose in writing this piece is to remind political leaders, as well as the common citizen, that building projects have long term consequences which must be considered when the initial project is first conceived. Go ahead and build, but remember: every project will eventually be a financial burden on some future generation. Further, having modern conveniences in our infrastructure generates an expectation that this is the normal state of things and also generates demand for even more wonders of the modern world to make our existence on this terrestrial orb somewhat tolerable.