Infrastructure Does Not Equal Roads

Oh No, not roads! No!!  When economists and politicians mention the word infrastructure, it is almost always followed by the word roads.  This is exactly what America does NOT need.

The End of Auto Age is 2020, less than ten years from now.  Gen Y is not driving, even without trains; and aging Boomers will soon start to drive significantly less, making roads less traveled and financially unsupportable.

So spending money on roads is now is both wasteful and deadly. The U.S.A. can no longer afford either.

What kills more Americans, invading Iraq or building more roads?  Answer: Roads
What creates more jobs, building roads or building trains?  Answer: Trains.
Which will be more used in 20 years, roads or trains?  Answer: Trains. 

America, falling behind the rest of the world in the 21st century, is running out of both money and time.

Comments

[moncler sweden]

I like you on facebook and follow through google reader!

[supra tk society]

So cute! I already like you on FB and also get your posts on Google Reader. :)

[D. P. Lubic]

More signs that the car culture is getting old?

http://money.cnn.com/2011/05/26/autos/american_drivers/index.htm

http://epautos.com/2011/09/01/americans-dont-drive/

http://forums.motortrend.com/70/6600410/the-general-forum/why-cant-americans-drive-properly-warning-heated-r/index.html

The current edition of Car and Driver has an piece on this as well by editor John Phillips. His editorial takes on what he sees as too many old people whose brains and reflexes aren’t working properly–and he’s a bit nasty in spots!

[D. P. Lubic]

I will only add that we must thank goodness for copy-and-paste commands!

[D. P. Lubic]

Like many others, I check other websites, too. In this case, we have some comments and data on why we have some of the problems we do, from a site called the Infrastructurist.

Consider this to be another reason to turn this country away from cars, at least to the extent that we have overemphasized them for the last 50 or 60 years.

First, we have some information provided by a commenter who goes by the name of Montag:

1960 average price for gas 31 cents/gallon ($2.23 in 2010 dollars)
1960 median household income $5,700 ($41,074.27 in 2010 dollars)
1960 average vehicles per household 1.03
1960 average VMT per household 9,805 miles at 14.4 mpg

9,805/14.4 = 680.9 gallons of gas per household on an annual basis.
680.9 gal/year x .31 gal = $210/year
$210/$5,700 = 3.68% of household income

2011 average price for a gallon of gas $3.50/gallon
2010 median household income $49,445
2009 average vehicles per household 1.92
2009 average VMT per household 19,900 miles at 23.1 mpg

19,900/23.1= 861.5 gallons of gas per household on an annual basis.
860.5 gal/year x $3.50/gal = $3,015/year
$3,015/$49,445 = 6.1% of household income

A reply by me (actually two, modified and combined for some clarity):

What we are seeing here, at least as I interpret it, is a combination of the cost of sprawling suburban living (that big increase in miles driven, ownership of many second vehicles), the increase in the cost of petroleum products, and also the effects of stagnating real wages (something that has been on the minds of some economists of late) relative to the increasing costs of other things (food, housing, insurance, and of course gasoline).

Note that the cost of gasoline relative to the household’s income almost doubles, even as fuel consumption per mile drops well towards half. The result is an increase in overall cost despite a falling unit cost, arguably with no increase in value (you still buy the same groceries, but you have to go further to get them). Put it all together and throw in a lot of people out of work, and you have people, families, and a country in distress.

And, I might mention, consider that this is not just the gasoline; it’s also the repairs and insurance and car payment on a second vehicle. Add that up and throw in the stagnant wage issue, and suburbia, as “dreamed” about, becomes just a dream for very many people.

The whole suburban sprawl system–not just the gas–is becoming unaffordable, unless you either got into it years ago and your house is paid for, or unless you can make bigger bucks than most, or unless you are in a place where houses are really cheap for one reason or another.

An item for reference (and I’ll have to give it more than a skim myself when I get the time):

http://www.policyarchive.org/handle/10207/bitstreams/1529.pdf

An interesting coincidence–I can’t find the study or article just yet, but I seem to recall an economist who noted that when oil purchases grew to exceed 4% of GNP, they would have the effect of an oil price shock and induce a recession. If Montag’s numbers are right, combined with other things (i.e., a lack of customers for business), then a general household cost in the 6% range puts a lot of people in recession territory.

I did some looking:

Not quite what I remembered, and certainly not where I saw it, but a documented oil price trigger level–5.5% of GNP–as a recession inducer:

http://www.transitiontowns.org.nz/node/3047

A following comment by another poster named Dean, in conversation directed to Montag:

Blast! You caught me forgetting that the number of cars per household is different than 50 years ago, making a significant difference in the percentage fuel cost per of household budgets. If I had not forgotten that, and on a per car basis, my point would have been close enough. Do you have the numbers and years for when fuels costs were the largest and smallest part of the household budget?

We have had relatively cheap gas for a long time. If we could get the speculators out of oil futures, we would have better stability. Even if we still have plenty of oil in the ground, as some on this site have claimed, the demand for oil seems to be growing much faster than we can currently put more wells on line. The price is going to go up in comparison to everything else at some point. Hopefully, the price will only rise fast enough to drive us to alternatives and not so fast to put us into shock.

Montag replying to Dean:

I haven’t looked for the period of time when household fuel expenditures were the lowest, but I expect it ran from the 1950s, up until the early 1970s, when the first oil shocks occurred and the economics of middle class households began to shift away from a single-income model to a dual-income model with the entry of large numbers of women into the workforce.

Presently the dual income model, which became the de facto norm starting in the 1980s, only provides 20% more household income, adjusted for inflation, than the single-income economic model of the 1950s and 60s. It also imposes substantial additional economic costs, such as transportation, mentioned above, and preschool/daycare for those with children. This is what Elizabeth Warren refers to as the two income trap. Combine these additional costs, with the cost of housing, healthcare, and taxes, which, as a percentage of income, are dramatically higher than they were in 1960 for the middle and working classes, and you begin to understand why a jump in the price of gas suddenly becomes the straw that broke the camel’s back.

Me again:

Talk about a triple-whammy! Our wages stagnate in real terms while everything else goes up, a second person working adds only 20% more to income while incurring double the additional associated costs, and those additional costs are also rising, with a key or visible component–gasoline–being the “last straw.” This is worse than I thought; wish I could come up with an answer. . .and the bad part is, the leadership we have, even that which would be at least nominally sympathetic to the working people, is apparently not aware of these ratios, or at least is uncomfortable talking about them, and for that matter about the peak oil question. . .

How did my country, which won WW II, which lead the world so long, which was that “shining city on the hill,” turn so dumb and wimpy?

Dean again:

It looks like we forgot how to count. Or how to take into account the effects of an action.

Comments edited to cut out extraneous quotes from previous posters in replies. Full Infrastructurist page on this subject is visible below:

http://www.infrastructurist.com/2011/09/19/is-the-world-running-out-of-oil/#comments