In this age of pseudo GOP austerity, in which Republicans are eager to demonize government at all levels, public investment in our future suffers mightily. In effect, decrying public spending has become a Republican crusade, which reflects not just an anti-government doctrine but also a strategy to vanquish Democrats, especially Barack Obama. Perhaps the exception is looking after the military sector and the private elite.
In the private sector, today’s competitive global markets exert powerful pressure to improve return on investment (ROI), but concentrating on capital assets from a strictly financial viewpoint. Too little attention is paid to measuring and improving a company’s biggest assets – people. Too few companies recognize that intellectual capital and knowledge management are key ingredients of success. The truth is that people assets basically don’t wear out like capital assets and can and do become more valuable with experience, education and training.
The public realm, especially during the recent Bush administration, also treated key public assets like throwaways with its tax and legislative policy. Rather than invest in the repair of infrastructure, promote dynamics in public education, invest in efficient transportation of goods and people, earmark investment in advanced technology, the focus was to replace employees with capital or outsource for cheaper labor abroad, this with Bush legislation and tax policy that encouraged – and, in effect, the Obama policy still does encourage — corporations to outsource, or incentivizes a dismissive treatment of labor.
Public education hasn’t fared much better, for recently, it has been a focus of exploitation by private industry.
In league with special interests which finance their campaigns, public officials have made education a chattel, a way to transfer public money into the pockets of speculators, banks, and Wall Street investors. Privatized schools, most not accountable to parents and taxpayers, have been promoted at all levels of government. Too often, the spotlight is not on promoting education for the betterment of our students but increasing profits for the speculators who have rushed into the privatization of the education game. Their lobbyists are well heard by our elected officials.
The current focus is test scores, while ignoring successes of the past. Among the successes is early childhood education, through programs like Head Start. It is an investment with genuine high-rate returns.
A documented study published in October of 2004 traced the 40 year progress of 3 and 4-year-old children from disadvantaged families in Ypsilanti, Michigan. In 1962, Fifty-eight children were assigned to the high-quality Perry preschool program and compared with a comparable control group at ages 14, 15, 19, 27 and finally at age 40.
Overall, the study documented a return to society of more than $17 for every dollar invested in the early care and education program, this in terms of benefits and alternative costs to society. For example, more of the “pre-school educated” 58 were gainfully employed at age 40, 76% vs. 62%; more graduated from high school; more had significantly fewer arrests, 35% vs. 55%, some of the latter more than five times.
At the college level, the burdensome student loan program offers negatives as well. Loans are becoming larger and larger, averaging some $30,000 per student, loans growing as states withhold support from colleges whose tuitions skyrocket, while reducing taxes for the rich, especially in Republican-controlled states. US college graduates now owe a total of around $1.2 trillion dollars. In an almost mocking contrast is Germany now offering tuition-free college.
Though human investment in people can be private or public, the returns are both private and public, the former in earnings, individual productivity and continued employment, the latter in terms of economic growth, job recovery, reduced overall spending, and enhanced global competitiveness.
Then too in the area of infrastructure, over a seven year period, ending in 2012, the US trails five of six other advanced countries with the exception of Italy. If you looked beyond that, it is worse. In 2012, according to a Brookings study, 11% of national employment involved infrastructure jobs, many with more highly-skilled workers and higher paying jobs. However, of late infrastructure spending has been abysmally low. In 2011, for example, Republicans cut just highway and transit funds by 33% which destroyed over 600,000 American jobs the next year.
Bumbling politicians from both parties have neglected infrastructure for decades, but a dogged conservative-led polarization has helped to stymie any effort since after the Reagan administration. Every four years, the American Society of Civil Engineers (ASCE) releases a comprehensive assessment of U.S. infrastructure. The 2013 report card had an overall grade of D+.
At the time, the nation’s 607,380 bridges had an average age of 42 years, and one in nine was rated structurally deficient. Hundreds of millions are being spent for tragic failures: the I-5 Bridge last May near Seattle buckled, sending two cars in the river below. In 2007, part of the I-35W Bridge in Minneapolis collapsed during rush hour, killing 13 and injuring 145. It cost $234 million to repair. Another example, water mains in old eastern cities, even in newer cities like LA, keep breaking and putting urban areas like UCLA and the Sunset Strip under several feet of water, requiring millions of dollars to repair.
Cost for crumbling infrastructure is not just measured in repair costs but also in lives, injuries, traffic jams and resulting lower productivity. Since 2010, the continuous obstruction of the Republican Congress has been devastating for states and cities that can’t do deficit spending like the federal government can, which should, especially during times of recession. It is totally irresponsible to shun such investment when borrowing money is cheaper than it’s ever been.
Princeton economist, Paul Krugman suggests creation of a National Infrastructure Bank that could lend money to the states and municipalities for qualified public works projects, to be repaid in some 20 years. Confirming cheap money, Krugman reported that the interest rate for inflation-protected bonds is now 0.4%.
Our lead as well as our expertise in space exploration has also suffered. The Bush administration’s needless, even criminal, trillion-dollar-plus war in Iraq drained funds, mostly borrowed, away from investment spending, space exploration included. We are still paying a premium penalty with the emergence of the ISIL threat in Iraq, almost a direct consequence of reckless – add incompetent — Bush administration policies in Iraq.
Meanwhile, using the space technology we developed, other countries are scoring their own space successes. Private American companies like Space X are thriving on space technology American taxpayers had funded as well. The European Space Agency’s Rosetta mission is demonstrating great expertise in advancing the world’s knowledge of life’s beginnings by studying the Comet, 67P.
Such missions require small sums of investment, compared to the war debacle in Iraq the Bush administration perpetrated, and which Obama is newly pursuing. Space accomplishments don’t just accrue jingoistic awards, they usher in scientific understandings that all other disciplines can build on, including biology, physics, chemistry and health care. They are endeavors in general science that private companies do not pursue because there is no immediate profit involved, but the expertise and knowledge garnered are usually exploited – though unheralded – by private companies in commercial pursuits like Space X. Such sharing is totally acceptable if all foot the tax bill fairly.
Seeing that the role of government is to look after public interests that for-profit companies can’t or won’t do, Americans need to demand their tax dollars are spent for the public benefit – now and for the future. That means for investment, not for vested interests subsidies or unneeded wars.
Consider what could have been accomplished if Republicans hadn’t obstructed public investment spending. In spite of Republican suppression, US Gross Domestic Product (GDP) has grown at a 3% clip, even with the idle capital, which banks and corporations are sitting on — over $2.5 trillion.
Why are they sitting on these funds: Because they recognize that consumer demand is weak, weakened by Republican suppression of higher wage rates, infrastructure spending, local public spending, and jobs programs.
If we listen to Republican leader statements, their reason for obstruction is not ideology or principle. It’s political.
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