Dust to Dust

Friedman wrote in this Sundays column in the NY Times “Over the years, I’ve seen an America that was respected, hated, feared and loved. But traveling around China and Singapore last week, I was confronted repeatedly with an attitude toward America that I’ve never heard before: “What’s up with you guys?””

Friedman was talking about the way the United States was/is perceived in the lead up to, and since the Government shutdown. It’s well worth a read.

However, in many ways were are increasingly being judged both through the political shenanigans, but also for the lack of progress we are making in almost any other walk of life. Yes, in many ways we are still massively ahead, investment in the country and it’s infrastructure, we are going backwards in real terms.

US Investment

US has hit its lowest level since demobilisation after the second world war because of Republican success in stymieing President Barack Obama’s push for more spending on infrastructure, science and education. Overall this has lead to problems with bridges, and increasingly roads here in Texas being turned back into gravel paths. This caught my eye while speed reading the Financial Times

Kirk Dale, the township supervisor of Marlette, Michigan, has first-hand experience of what it means to spend less on infrastructure. Thirty years ago, he felt his small town was on the rise when Cooper Road, a local residential street, was first paved. But today, Marlette cannot afford the maintenance and has joined a number of small communities that have pulverised their streets and gone back to gravel.
“You make a calculated, rational decision on which mile to do,” said Mr Dale, the township supervisor. “And then you look long-term down the line saying ‘Hey, even if we were to pave this, how are we going to repave this 10 or 15 years down the line?’

Makes for dramatic reading and sets the tone for how things are perceived, but I’ve never been to Marlette. Turns out google maps has been there, but never been on Cooper Rd, but the parts you can see show it’s not like it’s a main street. Check on out on streetview here. Also, I know someone who actually lived on a S Main St, and that wasn’t paved ever. Perhaps the FT team could have researched this a bit better?

Take this link, then click on satellite

Interestingly Google Satellite include this view of Cooper Rd, maybe this is an elaborate message from the heartland to god to save their road?

I digress, what the FT points out is that by comparison, not only is the US getting left behind, but that it is going backward. Why does this matter? Well back to Friedman, its not really how the US is doing that matters. The entire international finance system is based on a confidence trick. The investment in US Government bonds is based on the perception that the US is growing, doing the right things and can buy back or pay off those bonds. Much like a run on the stock market, once everyone gets scared that the US is going in the wrong direction, they run in the other direction.

The FT also notes and I agree

  • Construction projects have taken the early hit as budgets come under pressure, with state and local government building fewer schools and highways
  • Public investment is expected to fall further under almost everybody’s budget plan

The upcoming budget discussions will form a key bellwether for the USA, not only what the politicians say or don’t, but based on what’s in the budget. If they manage to substantially cut public expenditure again, the debt crisis will become more real as the value of US Government bonds will come under pressure.

Perhaps the Marlette field is reminding us of “The wicked borrow and do not repay, but the righteous give generously.” Psalm 37:21; on maybe Psalm 22:7 says the borrower is servant to the lender. Tea party anyone?

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