The need to repair a failing infrastructure is evident by an assessment of the American Society of Civil Engineers. The current infrastructure in the USA was rated a “D” with extensive engineering maintenance required just to bring the existing infrastructure up to legal and professional codes and standards.
The case for upgrading infrastructure is made due to more storm activity along the coastline of the United States, the continuing corrosive elements in nature, a growing population and an economy of nearly fifteen trillion dollars. There are 3.8 million square miles in the United States.
In 1960, the population was one hundred eighty million which translates to 47 people per square mile. Today, there are three hundred ten million people or 81 people per square mile. In 2050, the population will be five hundred million people or 132 people per square mile. These trends show clearly that growing
numbers of people will be utilizing the same infrastructure under more severe weather trends.
Repair of the infrastructure is designed to anticipate the continuing impact of nature on the existing infrastructure. Corrosion of metals on bridges, tunnels and rails is the result of factors like temperature, oxidation and acidity. In fact, acidity and oxidation frequently happen concurrently. The rate of corrosion is often determined by electrolysis which results in the pitting or roughening of a metallic surface in places like rails and bridges.
Concrete in roads, tunnels, nuclear power plants and dams can withstand compression forces but deteriorates with tension. The performance in tension can be improved with casting the concrete with rods or mesh so that the steel absorbs the tension load.
The tremendous forces of tornadoes are circular in geometric appearance and the forces are non-linear like in the Mohr circle. Earthquake engineering deals with the reinforcement of materials to withstand the various primary and secondary waves which accompany these natural disasters.
Infrastructure enhancements and the building of brand new facilities can be paid for in a number of ways. The traditional payment mechanisms are with public bonds, federal grants, toll roads and taxes on local governments.
The resources for capital projects funds usually come from general obligation bonds but resources can come from general tax revenues, federal grants or shared revenues from other governmental sources. Special assessment bonds are paid thru special levies against specific properties receiving benefits from special assessment improvements. Revenue bonds are payable from the earnings of a governmental enterprise and are accounted for in an appropriate enterprise fund. General obligation bonds are supported by the full faith and credit of the governmental unit itself.
Additionally, there are approximately one trillion dollars held by the corporations of the United States in overseas bank accounts. If withdrawn currently, the taxes would be nearly three hundred billion dollars or more. Previously, the government allowed major corporations to repatriate this money at a fraction of the taxes owed with an immediate repatriation.
In the case where repatriation would be allowed at a 10% tax, approximately one hundred billion dollars could be collected by the federal government. These funds could be used to help defray costs of improving infrastructure, dealing with temporary unemployment and payments to the states to keep teachers and other municipal employees gainfully employed until the adverse effects of the Great Recession end.
The Foreign Earnings Reinvestment Act, seeks to encourage the flow of one trillion dollars from the foreign subsidiaries of U.S.-based multinationals at a rate of 8.75 percent rate of taxation instead of 35%. It would accomplish this through a temporary dividends received reduction of 75 percent. The bill has bipartisan support. 1)
As an incentive to create jobs, the bill would let companies further lower the tax rate to 5.25 percent if they grow the domestic payroll during 2012. Today, there are one hundred thirty million more people in the USA and seventy one million more workers than in 1960. 2) 3)
Even assuming a constant unemployment rate of 5%, the existence of another seventy one million more workers in the USA means an added three and a half million more unemployed workers over 1960-even if the same unemployment rate proportions held. Presently, the Obama Jobs Legislation is undergoing a piecemeal transformation into smaller pieces that the Congress intends to pass incrementally in the near future. The end result will be an amalgum of private and public sector funding mechanisms.