[nickff]

The USA has been a suburban nation for quite a while now, and previous generations paid to lay down the roads and pipes. The interesting question is why poorer people with relatively crude technology were able to create this infrastructure, but we can no longer afford to maintain it. Infrastructure budgets have increased (in per-capita and inflation-adjusted terms), but our maintenance capacity has decreased; the question is why?

[alamortsubite]

https://www.strongtowns.org/the-growth-ponzi-scheme

[nickff]

That makes sense if you only look at the municipal level, but it seems like citizens are not getting much per their 'transportation buck'; i.e. they pay a lot of money to multiple levels of government, and those governments are not able to deliver much value per dollar.

[lumost]

A useful term is “endemic corruption”. We like to think of corruption as illegal activity like kickbacks, and bribes. However there is also corruption where everyone pads the estimates a bit, everyone makes things a bit harder than they should be, and tons of “make work” to keep all the jobs created for forgotten purposes busy.

Real reform will be hard.

[not-my-account]

Or for a video version, https://www.youtube.com/watch?v=7IsMeKl-Sv0

[johnchristopher]

Isn't maintenance capacity linked to taxes, which have been decreasing in the US for decades (or so I hear) ? Also: manufacturing moved out of the US so everyone can buy off-the-shelf Asian parts and products so more money is left in people's pocket but that money ultimately goes to landlords who can raise prices ?

I am really stupid with economy stuff but I have the strong feeling that we - in the west - are living off of cheap credits and cheap debt and it gives the illusion of being rich because we can buy obligations and financial products and balance spreadsheets between tax-payer's money and private sectors and welfare states and debt payments, etc. but at the end of the day when we need to work on our infrastructure our money is not worth the paper it's printed on since our workers and our tools are not up to the task or we need to pay a huge premium to get some quality work ? Something like that...

Edit:grammar, spelling

[nickff]

>" Isn't maintenance capacity linked to taxes, which have been decreasing in the US for decades (or so I hear) ? Also: manufacturing moved out of the US so everyone can buy off shelf Asian parts and products so more money is left in people's pocket and that money ultimately go to landlords who can raise prices ?"

From another of my comments: Rates have gone up and down (down overall at the federal level), but inflation-adjusted revenue is way up, and spending has increased even more than that.[1]

>"I am really stupid with economy stuff but I have the strong feeling that we - in the west - are living off of cheap credits and cheap debt and it gives the illusion of being rich because we can buy obligations and financial products and balance spreadsheets between tax-payer's money and private sectors and welfare states and debt payments etc. but at the end of the day when we need to work on our infrastructure our money is not worth the paper it's written with since our workers and our tools are not up to the task or we need to pay a huge premium to get some quality work ? Something like that. "

I don't think you're stupid at all; the reduction in purchasing power are complex and hard to measure.

[1] https://annualreport.usafacts.org/articles/43-government-tax...

[clove]

The US dollar is in high demand internationally. The fact that it is the world's reserve currency will ensure that "our money is not worth the paper it's written with" remains false. The US trade deficit allows for nations with trade surpluses (e.g., China, Russia, Holland) to acquire USD while Americans acquire products and services.

Landlords raising prices has less to do with the issue of forex and more to do with the housing market and inflation.

[wishinghand]

Policy makers don’t raise enough taxes for pay for it.

[nickff]

But taxes were lower in the past! That's the interesting part; everyone is paying more, but we can't afford as much.

[solarmist]

Were they? I'm pretty sure taxes have been going down for decades.

[nickff]

Rates have gone up and down (down overall at the federal level), but inflation-adjusted revenue is way up, and spending has increased even more than that.[1]

[1] https://annualreport.usafacts.org/articles/43-government-tax...

[hcurtiss]

And property taxes and fuel taxes, which pay for most of the stuff under consideration, have only gone up. In some cases, way up.

[acdha]

I grew up in California. You could see when Prop 13 capped property taxes in things like schools or libraries: everything built before it was nice but falling apart, everything built after it was designed to be cheap to build. They could try to bridge the gap with bonds but that was unreliable.

[thaumasiotes]

Don't think of it as our maintenance capacity decreasing. Think of it as many more maintenance "requirements" having been added.

[DarylZero]

Income inequality squeezing the bottom of the tax base? The money was much more evenly distributed then.

[syntheweave]

Demographics + relative labor costs account for infrastructure's cost suddenly rising in the developed world. "Baumol's Cost Disease" plays some role, but I believe a full narrative is in order.

With a rapidly rising population and high immigration, the early 20th century US had a pool of cheap labor at the ready. The "cost/benefit of a life" was assumed lower because mortality was higher, i.e. assumed optimal societal use was to break a body with labor before disease took them. Grooming them for the professions would be a waste. Cities were relatively smaller but more crowded, with lower standards of living.

This changed by mid-century. Mortality was now down to historic lows which made the post-war baby boom have a uniquely lasting impact. A generation with expectations of long life now faces the prospect of "retiring well", which pushes them to focus on education and career and demand higher margins of safety in their everyday lives. This creates an inflection in the early 1970's - the same one everyone has remarked upon in finance, culture, and politics - as the boom generation reaches working age and floods into the markets, looking for jobs and assets. This allows the suburbs to continue to boom: the marginal cost of adding another subdivision is low, and the technical foundation is established.

Then fast forward 30 years, and you have a new large generation of working age, but the world isn't being built out to accommodate them. Cities have gone from disinvested to overpriced. The trades are now in neglect because of a new bias towards academics. They graduate into job and asset markets that are locked up by older cohorts who enjoy the benefits of still being alive and able to work at advanced age. This is the Millennial's dilemma: They have been groomed for jobs they can't access, and there's no war or other crisis that would let them be utilized. Infrastructure is something they could work on, but the political system biases towards pleasing earlier cohorts, who will interfere with any change to the arrangement, which they are now fully invested in (in all senses of the word). The costs of changing anything spiral out of control, the politics compounded by the fact that there's been a lot of productivity improvement in information and finance, but little in physical assets. If 20 guys slinging code contain more speculative value than 20 guys swinging hammers, you'll see a lot of investment in code and not hammers - and that gives you cost disease. The high price of infrastructure is in part reflective of an uncorrected disinterest. It's irrational exuberance, but the other way around: nobody wants to pay for quality when there is "something better to do," so every project that needs it is a special case deserving a high price tag.

Thus, deferred maintenance becomes the norm and stays that way until - just recently - mortality finally starts taking its course, the grip of the Boomers starts to slip, and the bills come due. The "Great Resignation" is in large part a reshuffling of jobs and assets preceded by the demographic changes and then catalyzed by the pandemic crisis, which is going to change the infrastructure investment climate towards a new equilibrium going forwards - even though the Biden infrastructure package has been cut, the trend of disinvestment has reversed.

There is a lot of interest in the future of construction right now, and in new technologies that don't just change the products, but also make construction jobs better, safer, and more productive - e.g. two people building a house rather than a crew of 10. And there is a market that will still likely bias suburban, but is ready to see a slightly denser built environment with lower car dependency. Our ideal goal is "denser yet less crowded" - crowds are a combination of people needing to travel to destinations (suddenly in decline with WFH) and the travel being space-and-time inefficient(big cars travelling long distances versus short walks). Do some "road diets", allow some fourplex lots and ADUs, and install some walkable retail - and you'll have the suburbs of the future.