There has been much talk lately about a much touted infrastructure spending bill by President Trump and now in congress. The mantra is that our bridges and roads are “crumbling” and if we don’t do something fast – like spend 1.5 trillion – YES! I DID JUST SAY TRILLION!! there is going to be big trouble. This is not actually just a whipping horse for the current administration, it has been repeated multiple times over the past decades (Remember the “shovel ready” projects of the Obama administration? That wound up being a very expensive scheme to fill the pockets of the unions…..).

First of  all, what fits under the category  of “infrastructure”? Only bridges and roads? What about the electricity grid and gas pipelines etc.? Water delivery systems included as well?

Secondly, are the bridges and roads truly crumbling and in disrepair?

We seem to have conflicting takes on this:

http://www.nationalreview.com/article/456248/infrastructure-crumbling-rhetoric-not-reality

This piece makes the case that things are doing way better on the conditions of our roads and bridges than ever before. If anything, the cause of the trouble is the bureaucratic red tape that hamstrings projects from getting started let alone making it to the finish line.

On the other hand, we have this:

http://www.washingtonexaminer.com/republicans-consider-the-unthinkable-a-gas-tax-increase-to-pay-for-infrastructure/article/2648637

Which argues that there is credible backing for a significantly needed boost in spending to be competitive with other countries, Especially if the economy continues on its sustained growth trajectory the infrastructure is going to have be able to sustain that growth.

See here as well:

https://www.nytimes.com/interactive/2016/11/15/business/dealbook/dealbook-infrastructure.html

(Not that I agree with the premise that more government spending actually stimulates the economy – I believe that  this has been disproved time and again.)

So of course, as with many issues there is a clear tug’o’ war as to the merits of the need as well as how the money does get spent ultimately. While discussing the possibility of raising the gas tax makes for a very lively conversation I’m sure, let’s just focus on the main point here at hand:

Essentially, I think that the American taxpayer would be o.k. with paying for reasonable and truly necessary projects, provided that the funds are spent judiciously and efficiently. Although short on details, if President Trump can employ his expertise and ensuring successful projects, completed in a timely fashion, on budget, and especially if the taxpayers reap the benefits of public  private partnerships.

As an example here is a case in point where bonuses were doled out as an incentive for completing a critical project ahead of schedule:

http://articles.latimes.com/1994-04-06/news/mn-42778_1_santa-monica-freeway

Remind me later to share with you my theory about what is going on with the trucking shortage and the spike in freight prices.

Stay tuned…..

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Ben Levi – Premium Steel Sales

Ben@PremiumSteelSales.com