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31 October 2012

A pretty good argument for at least some deficit-funded infrastructure spending

Seeing Sandy coming.

By Alex Hern

From the 10 September New York Times, Mireya Navarro wrote:

With higher seas, a common storm could prove as damaging as the rare big storm or hurricane is today, scientists say. Were sea levels to rise four feet by the 2080s, for example, 34 percent of the city’s streets could lie in the flood-risk zone, compared with just 11 percent now, a 2011 study commissioned by the state said… 

The city and its partners are incorporating flood-protection measures into projects as they go along.

Consolidated Edison, the utility that supplies electricity to most of the city, estimates that adaptations like installing submersible switches and moving high-voltage transformers above ground level would cost at least $250 million. Lacking the means, it is making gradual adjustments, with about $24 million spent in flood zones since 2007.

On Reuters today, Emily Flitter writes:

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Almost every street below Times Square in the city’s Midtown district lost power on Monday night after an explosion at a Consolidated Edison (ED.N) power station, and it may not return for up to four days. A number of these areas had already been hit by flood waters.

Regardless of the shape of the bond market; regardless of the expected return on investment; regardless of whether you are a Keynesian or a Monetarist; some infrastructure investment is a really good idea to do sooner rather than later.