"Whenever I go into a restaurant, I order both a chicken and an egg to see which comes first"

Tuesday, May 17, 2011

Pay for it!!

The following Post article chronicles the sad decline of American infrastructure, with the investments of China and India beggaring ours while bridges, roads, water and sewer systems deteriorate.

http://www.washingtonpost.com/local/study-2-trillion-needed-for-us-infrastructure/2011/05/16/AFyppB5G_story.html

A simple means of addressing this issue which is consistent with our current budget crisis is “Pay for It”, which means decreasing the public cost and passing at least some of it on to the consumer.  For example:

* With new IT technology, our Interstate highways can be equipped with computer chips imbedded in them; and transponders required in all cars.  The idea – if you use a congested section of the highway, you pay more for the privilege.  This will serve to even out traffic flow with a benefit to everyone – truckers are happy even though they pay more tolls, because of the time and fuel savings.  Commuters and regular road users are happy because they can travel when they want and find little or no congestion.  We all are happy because the environment has fewer pollutants since idling vehicles pollute far more than moving ones.

* A variation on this idea is to charge by miles and by weight.  If you are a trucker with a big load and going long distance, pay for it via these IT tolls; and if you are a long-distance driver, pay for it as well.  Metro in Washington does this – the longer the ride the more you pay.

* The same goes for electricity use – pay more in peak hours when the load is greatest for the power company contributing to breakdowns, brown outs, and other problems.  Run your dryer and dishwasher at 3am – there is simple timer technology to handle this.

* Same goes for water but priced differently – the higher your water use the higher the rate you are charged.  If you want to water your lawn, wash your car thus pushing your consumption way up, then you should pay more and a lot more as your consumption goes up.

This is all akin to the move to ask citizens to pay more, proportionate to their benefits, and to equalize public-private investment:

*  Public sector pensions – fire, police, teachers – should be asked to contribute more to their pension plans, thus reducing the public cost.  Currently, the private sector has few pensions, and those that exist are very demanding (where I last worked, for example, one had to wait 4 years to enroll in the profit sharing plan, a type of pension).  Just because the contracts were negotiated in flush times and politicians were happy to have union support, there is no reason why this should continue now.

* Pay for performance – teachers are the obvious example.  They may object and say that teaching performance cannot be measured because any quantifiable (number) measurement will demean and devalue the intangible outputs.  This is poppycock, since there is a fair way of measuring anything if the desire is there.

* Add personal contributions to entitlements – there is no reason why the age of Social Security and Medicare shouldn’t be raised slightly, resulting in billions of revenue.  The Government should also raise the ceiling of Social Security which is now far too low.  Why shouldn’t I pay SS on all my earnings?

There are ways to privatize as well:

* The joke of Adopt a Highway could be the serious Buy a Highway.  The Interstate System runs on taxpayer dollars, and many people get a free ride, as above, while the cost of maintenance are enormous.  Why not sell off portions of the Interstate system to the private sector which would have to maintain uniform standards, but could also charge more for the privilege of using the road.  For example, the Government may not be able to sell of those very rural portions of the system, but more heavily travelled sectors might be attractive especially since fees could be charged by type of use, above.

* Ticketing and towing – it is a big joke that the District of Columbia still uses its own towers to tow illegal parkers on major thoroughfares.  If one calculates the opportunity cost of high-earning (and taxpaying) commuters stuck in traffic because of one illegally parked car on Mass Ave, it is significant to say the least.  Private towers would be out there in a minute, and the revenues would be significant, even considering the fee they would pay to DC

* A million other ways……

Now, to the current question of cutting costs without adding personal investment:

* There is no program in the United States that couldn’t use a careful accounting and then surgery with the budget knife.  That includes the military which maintains weapons systems which have little to do with today’s threats; agriculture which should no longer get the subsidies it does; energy – we all know the subsidies the oil companies get now for drilling; etc. etc.

* Congress is unable to cut, period.  So there have been good proposals that have suggested a revisiting of Gramm-Rudman, where mandatory cuts need to be made but tied to an objective indicator, such as debt or deficit-GDP.  If we surpass that limit, then Congress has to cut, and decide on what to cut, democratically.  If they fail to do it, then mandatory lawnmower cuts would automatically take place – cut a little off the top of everything

So much sensible can be done with minimal or marginal cost to citizens, and yet the public debate is stalled, stymied in Washington.  Egads!!

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