Sunday, August 7, 2011

Obama and the Democrats have to ... make government work", Part 2

I don't think a single week goes by without some left-wing journalist/activist/economist making a heart-felt appeal to increase the government spending. And as is customary, one of the reasons given for such an increase is the need to rebuild our infrastructure - roads, bridges, sewers and the like. Even our president is asking for money to "rebuild the infrastructure". According to laprogressive, "He [Obama] says he wants an “infrastructure bank” that would borrow money from private capital markets to pay private contractors to rebuild our nations roads, bridges, airports, and everything else that’s falling apart." One strange thing though - Obama just spent 900 billion dollars on stimulus, which was also sold as a project to fix our bridges and roads - "the biggest government infrastructure investment since the interstate highway system was launched in the 1950s". And the folks on my second most favourite blog, Alexandria, got in the game and demanded more government spending for roads, bridges - well, you know the rest. Of course, building new roads is a major government spending (4 million miles of roads, 600,000 highway bridges, 117,000 miles of rail, 11,000 miles of transit lines, 19,000 airports, 300 ports won't come cheap), and the liberals require tax increases.

Let's look at this issue from a historic perspective. In 2010, the federal government spent 92 billion dollars on transportation, while the total government (federal, state and local) transportation bill was 271 billion dollars. As a matter of perspective, the federal spending in 2010 was 3,456 billion dollars, and the total government spending was 5,799 billion dollars. In other words, out of every dollar that Obama spent in 2010, only 2.7 cents went for transportation. For all levels of the US government, the number was only slightly higher - 4.67 cents on the dollar. In short, the spending on roads, bridges, airports and "everything else that has to do with transportation" is a minor portion of the budget - practically a rounding error. So, every time when a liberal tells you that he needs more of your money to fix the roads - show him this statistics.

Now, while the transportation costs are a minor blip compared to the entire government spending, these are far from being small if you put them in historical perspective. Here is a singular point of reference - the launch of Interstate Highway System during the Eisenhower presidency. During the first 5 years of the project (1956-1960), the federal government built 10,000 miles of highway. It was far from an easy task, according to this government publication:

High standards were adopted for the interstate highway system. Access to all interstates was to be fully controlled. There would be no intersections or traffic signals. All traffic and railroad crossings would be grade separated, requiring the construction of more than 55,000 bridges. Interstates were to be divided and have at least four wide traffic lanes (two in each direction) and adequate shoulders. Curves were to be engineered for safe negotiation at high speed, while grades were to be moderated, eliminating blind hills. Rest areas were to be conveniently spaced. Each interstate was to be designed to handle traffic loads expected 20 years after completion.
I've collected the information on the cost of this project during these 5 years, and the total federal transportation spending from 1956 to 1960 was 110 billion dollars (in 2010 dollars) - which is only slightly above the federal transportation spending for 2010 alone (92 billion dollars). In fact, in 2009, the federal government spend another 107.2 billion dollars for the transportation improvement. If one includes the fact that technology advanced considerably during the last half a century, it remains remarkable that president Obama was able to spend so much money on "roads and bridges", enough money to build 20,000 miles of the interstate highway - and yet deliver so little. For all intents and purposes I could not even find any publication which would tell us how many thousands of miles of highway the federal government built in 2009 or 2010 - and I strongly suspect that the actual number is probably measured in hundreds of miles, if even that.

In order to illustrate the absurdity of the current situation (and to demonstrate how difficult it would be for the Democrats to make the federal government work), let me show a comparison between two projects, 80 years apart.

Empire State Building
The Empire State Building is an architectural marvel, and one of the most striking attractions in New York City. The building itself was constructed during the Great Depression and is a living monument to that era and the city it so proudly illuminates... For 40 years after it was constructed, it held the record for being the largest skyscraper in the world. The building has starred in over 90 movies, and it remains one of New York City's most popular tourist attractions.
 At the time it was built, the Empire State Building was the center of a competition between Walter Chrysler, of the Chrysler Corporation, and John Raskob, creator of General Motors. The competition, appropriately enough, was to see who could build the highest building first... In the year 1929, Mr. Raskob set about this task with a group of very well known investors...
The excavation for the project began on January 22, 1930 and took only one year and 45 days to complete, or 7 million hours. The masonry for the structure was completed on May 1, 1931, significantly ahead of schedule. On that date, President Herbert Hoover pressed a button in Washington, D.C. to officially open the building by turning on the Empire State Building's lights.  
The total cost to construct the skyscraper was $40,948,000, including the cost of the land. The building alone was constructed with a little over $24,000,000.

According to this site, in 2010 dollars, the total cost of the Empire State building is 500,000,000 dollars (in my calculation, it's closer to 590,000,000 dollars, but I digress). So, on one side we have an "architectural marvel",  "one of the most striking attractions in New York City", which is 1,050 feet above ground with 102 floors and 6,500 windows. What have we got on the other side?

Columbia River Interstate Bridge

The Interstate Bridge (also Columbia River Interstate Bridge, I-5 Bridge, Portland-Vancouver Interstate Bridge, Vancouver-Portland Bridge) is a pair of nearly identical steel vertical-lift, through-truss bridges that carry Interstate 5 traffic over the Columbia River between Vancouver, Washington, and Portland, Oregon, in the United States...

The bridge is frequently a bottleneck which impacts both traffic on the freeway, as well as on the river. The Oregon and Washington state departments of transportation are jointly studying how to replace the bridge. Initially, the estimated cost for a replacement bridge was around $2 billion, but that number has climbed steadily to around $4.2 billion.
On one side, this bridge is no "Empire State Building", not even close. The Oregon architects also don't need to buy the land in Manhattan to build a architectural marvel. And yet, note that the estimated cost of replacement is nearly 8 times the cost of the Empire State Building. But that's not all - there is more.... According to the official site:
1. How much have we spent on the project [rebuilding the Columbia River Interstate Bridge], what do we get from it, and where did the money come from?

Since 2005 the project has spent a total of $127 million. It has been funded about equally by Washington and Oregon, with additional contributions from the federal government. The current phase of the project is wrapping up this year. Since 2005, the funds have been spent on engineering, project management, transit planning, public involvement and communications (required by the federal NEPA process), and environmental studies, including preparation of a Draft and Final Environmental Impact Statement (EIS). The majority of the money spent to date in all project areas supports the current project design, including the bridge type.
After spending 6 years deliberating on how to replace the Interstate Bridge (3 times longer than it took to build the Empire State Building - from a concept drawn on napkin to the actual building open for customers) and spending 127 million dollars (more than 20% of the total cost of the Empire State Building project), the governments of Oregon and Washington still could not decide on what they wanted to build. According to another official site,
The Columbia River Crossing project team is currently refining designs for each of the project’s components based on public and local partner agency input.
In case you are wondering, the governors of both states, Oregon and Washington are hard-core liberals.
So tell me, dear leader, what are the chances that Barack Obama and the Democrats will answer Joan Walsh's plea to make the government work? Don't answer all at once, comrades...

1 comment:

Anonymous said...

Whenever government is involved contractors make a fortune. In an office I worked in, we would pay $2,000 for a TV that could have been bought retail for $500