Current Dilemmas in Local Government
How do we take care of our infrastructure? How can we fund it for the future?
It’s a topic that Paul Krugman tackles in his latest piece. Though his commentary is often overtly political (and often one-sided), nonetheless, it touches on many important points that are non-partisan in their nature.
It goes without saying that the nation’s infrastructure needs are significant right now. Roads and bridges are crumbling, and our water pipes — the ones that carry a basic necessity to our homes — are rusting and, in many instances, have not been replaced in decades. Why is this so? Krugman explains:
We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.
And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all. It could and should be offering aid to local governments, to protect the future of our infrastructure and our children.
So, local governments can no longer take care of the basic infrastructure because, purportedly, there is lack of funding. Local municipalities are indeed cash-strapped — but as Krugman points out, the federal government can offer some help with long-term, low-rate bonds. Why isn’t it doing so? Is this a question of priorities? Thoughts??