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??

About Beata Bujalska

Beata Bujalska is the former Campaign Coordinator for Renew Lehigh Valley. She currently lives in Panama, a place that fascinates her due to (among other reasons) its recent development boom.

Posted on August 9, 2010, in Media Coverage, Municipal Government, Public Infrastructure and tagged , , . Bookmark the permalink. 1 Comment.

  1. It’s definitely a question of priorities. Republicans in Congress know full well that we can borrow at absurdly low rates, and that the effect of, say, another $300 billion in spending to stimulate the economy over the next two years would amount to little more than a rounding error on the deficit. But they are choosing to exploit people’s fears about the debt, which we know are always much more acute during recessions.

    Democrats in Congress also know we need more stimulus spending, but are afraid of the deficit politics, and so are unlikely to spend more, or will try to do so in a way that doesn’t sound like spending – like “tax credits” etc that are much less efficient than direct government spending.

    There’s no excuse to let the country go to rot. If the problem is politics, voters will reward politicians for actually improving the economy, not for making empty gestures to reducing the deficit. This is no time to be stingy.

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