Thursday, August 15, 2013

Other people infrastructure

Just in case you were thinking that we were the only First World country with infrastructure problems.

Ailing Infrastructure: Scrimping Threatens Germany's Future
Spiegel Online, 27 June 2013 (hat tip: Big Picture)
From the outside, Germany appears to have a robust economy. But a new study by a leading economic institute reveals that the country is investing far too little in infrastructure and its future, effectively saving itself to death.
"Despite all the successes of the past few years, Germany has not created an investment basis to ensure robust growth," the researchers conclude.
In other words, Germany is living off its reserves. Bridges are crumbling, factories and universities are deteriorating, and not enough is being spent to maintain phone networks. This has resulted in a massive impoverishment of the country, according to DIW calculations.
Nearly 15 years ago, the state's net assets still corresponded to 20 percent of gross domestic product (GDP). When adjusted for inflation, this amounts to nearly €500 billion ($650 billion). By 2011, this had dwindled to 0.5 percent of GDP, or a mere €13 billion, primarily due to systematic neglect.
Generally, this is more of a failing of low tax regimes, than more liberal policies.  But if you grow your infrastructure at a time of high growth, you are going to have problems when that growth stagnates and the bill for upkeep becomes a rather large portion of your overall budget.  While operations and maintenance do keep some people employed, the materials and planning required for new construction is a much bigger boost to the economy.

2 comments:

James M Dakin said...

Here we do them a huge favor and level the place, they get to start over and rebuild everything, and then they put such crap in it is already starting to fall apart? It's only been a few decades. I thought they over-engineered things. Of course, a brand new VW comes from the factory with faulty gaskets so I guess you can't expect much. And their damn Braun razor fell apart on me within months. I feel sorry for those fools that bought a "gen-u-ine" HK for twice the price as an American clone. It might destruct on them.

russell1200 said...

James: It is very easy to live off the fat of the evil FDR era when the Socialists were running the show and spent lots of money building things up. Of course those folks didn't anticipate the problems keeping everything running, but you would think "conservatives" would be a little better at conserving that infrastructure.

That razor blade sharpener you told me about (Lehman's catalog) works well. Use that and you won't need the Braum anyway.

I have met very few people really in love with the HK platform. I think in the long run it will be the hybrid AR with the AK-style piston re-cock that will win the day. Seems to be going that way. Much less hassle cleaning too.