JUST PLAIN TALK: Strong infrastructure makes a strong country

Buz Livingston
Buz Livingston

Vaccinations give you the freedom to travel safely. If masks are mandatory, that's not a problem. Our granddaughters wore them all day long at school for months. Texans are tough.

While we were in the Lone Star state, their electric grid almost failed ... again. They couldn't blame frozen turbines, though. Like in the winter, gas turbines went offline. Texas' screwy electric transmission system is partly to blame, and it's also a sign our country has to modernize our electrical infrastructure.

Infrastructure spending runs into snags because it's time-consuming, expensive and the rewards aren't fully recognized until further down the road. Well-heeled lobbyists can steer pet projects their way; Florida's controversial MCORES toll roads are an example. Kudos to the legislature for their partial repeal, but look at the time and energy wasted.

The debate over infrastructure is puzzling. Morgan Stanley Equity Analyst Nikolaj Lippmann predicts an infrastructure package would trigger a "super cycle similar to the 1950s" for building materials. On repairs and maintenance alone, Morgan Stanley pegs costs at $400 billion and $800 billion, respectively, for concrete bridges and roads. They also estimate $300 billion for steel bridges and a whopping $1.6 trillion to upgrade asphalt roads.

We have been underspending on infrastructure for too long. You can kick the can down the road for only so long. On our afore-mentioned trip to Houston, we rode downtown to Cactus Records for National Record Store Day. We made it without busting an axel. We can do better; we're Americans.

Steel stands to benefit. Construction accounts for over 40% of annual domestic steel shipments. Most of the demand is rebar used to strengthen and stabilize cement but often criticized green energy projects utilize steel. Wind turbines, for example, use approximately 200 tons of steel per tower and electric grids use over 30 tons per mile.

In addition to increased demand for products, we would experience a boom in often highly compensated jobs. Per Ellen Zentner, Morgan Stanley Chief U.S. Economist, the projected infrastructure costs would add over 700,0000 jobs while increasing Gross Domestic Product annually between .4% to .8%. She also points out the multiplier effect of pubic dollars spent on infrastructure. "Each dollar increases gross output two dollars."

Often, me included, we view infrastructure projects through the lens of "how do we pay for them." We should also look at infrastructure as governmental investments in the future. For example, President Eisenhower initiated our interstate highway system via the Federal Highway Act of 1956. Traveling in Florida without interstate highways would be nightmarish. Of course, now it can be, which is why we need to get on board with getting them improved.

A bipartisan group in Congress and the Biden Administration appear to have a deal in place. Some politicians and pundits oppose infrastructure because they know it will work, and they prefer turmoil. It's July 4th. Let's celebrate our country and look for ways to improve, not ways to tear things down. 

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.