The USA, a 3rd world country?

[David]

Have you ever seen pics of other nations, some once fairly modern, that have fallen into complete disrepair?  I frequently wonder how that happens. 
The following article states that the water infrastructure was built decades prior, and are now ending the end of its life expectancy.  This generation has benefited from the initial investment that the previous generation paid for.  This country was and still is to some degree very prosperous.  But as the growth of gov't parisitism countinues, it seems to be overwhelming the prosperity.  That parisitism does not seem to be lessening much.  Even if it levels off, the damage is being done.  In a few years medicare will be bankrupt, social security will follow a few decades later.  The debt the feds owe is growing at an untenable pace with no sign of slowing down.  The states and cities are not much better.  If the Lew Rockwell guys are right about a serious recession hitting, all of those things will get worse. 
Many large cities have urban areas as rundown as much of the cities in S America and E Europe. 
I have long found this to be a facinating subject, in part because I feel I have no control over it happening, and I would like to find ways to help those effected by them.  The europeans, the south americans, the russians, they have no more control over their gov't than the Libertarians do in the States.  Most are too busy trying to survive with some level of comfort to really strike the root of the problem.  Even thoughs that can identify the root of the problem are usually not in a position to really strike at it.  We have a chance in NH.  But first we need to find workable ways to help people. 


The story that prompted this topic. 

US water pipelines are breaking By COLLEEN LONG, Associated Press Writer
Tue Apr 8, 2:33 PM ET



Two hours north of New York City, a mile-long stream and a marsh the size of a football field have mysteriously formed along a country road. They are such a marvel that people come from miles around to drink the crystal-clear water, believing it is bubbling up from a hidden natural spring.

The truth is far less romantic: The water is coming from a cracked 70-year-old tunnel hundreds of feet below ground, scientists say.

The tunnel is leaking up to 36 million gallons a day as it carries drinking water from a reservoir to the big city. It is a powerful warning sign of a larger problem around the country: The infrastructure that delivers water to the nation's cities is badly aging and in need of repairs.

The Environmental Protection Agency says utilities will need to invest more than $277 billion over the next two decades on repairs and improvements to drinking water systems. Water industry engineers put the figure drastically higher, at about $480 billion.

Water utilities, largely managed by city governments, have never faced improvements of this magnitude before. And customers will have to bear the majority of the cost through rate increases, according to the American Water Works Association, an industry group.

Engineers say this is a crucial era for the nation's water systems, especially in older cities like New York, where some pipes and tunnels were built in the 1800s and are now nearing the end of their life expectancies.

"Our generation hasn't experienced anything like this. We weren't around when the infrastructure was being built," said Greg Kail, spokesman for the water industry group. "We didn't pay for the pipes to be put in the ground, but we sure benefited from the improvements to public health that came from it."

He said the situation has not reached crisis stage, but without a serious investment, "it can become a crisis. Each year the problem is put on the back burner, the price tag is going to go up."

Catastrophic problems can arise when infrastructure fails. An 84-year-old steam pipe erupted beneath a New York street last year, creating a mammoth geyser that rained mud and debris down on the city.

In Chicago, an 80-year-old cast-iron water main broke earlier this year, spilling thousands of gallons and opening up a 25-foot hole in the street.

In Denver, up to 4 million gallons of water gushed from a ruptured 30-year-old pipeline in February, gouging a sinkhole across three lanes of Interstate 25. The lanes were shut down for nearly two weeks.

Cleveland has spent hundreds of millions of dollars on infrastructure in the past 20 years but still must repair daily breaks. Last month, a break in a 2 1/2-foot-diameter water main turned a downtown square into a watery crater and knocked out other utilities.

The amount of wasted water from these breaches is staggering.

The 36 million gallons a day that leak from the 85-mile Delaware Aqueduct in New York state amounts to more than 1 billion gallons a month. That may be a drop in the bucket compared to the hundreds of billions of water consumed in New York City every year, but the daily leak in the tunnel would meet the daily demands of drought-ravaged Raleigh, N.C.

Residents in Wawarsing, about 100 miles from New York City, blame tunnel leaks for the constant flooding in their yards and basements. Department of Environmental Protection engineers are trying to determine whether the aqueduct is really responsible for the soggy mess along Route 209 that has gotten considerably worse over the last 10 years.

David Sickles said the water just bubbles up from the cracks in the concrete in his basement — even when it doesn't rain.

"It's like there is too much water in the ground already," Sickles said, showing off the water line on the concrete wall of his basement. "There's no place for this to go."

Nearly every house has a black discharge hose running from the basement through the yard, gushing water into already-soggy patches of grass.

The land around Laura Smith's house turns into a lake when the snow melts, and her driveway is so muddy your feet sink when you walk to her front door.

Utilites currently spend about $10.4 billion annually on large-scale repairs and improvements on drinking water infrastructure, a figure that has been relatively flat during the past two decades, the EPA said.

Cities have a hard time convincing residents that they should spend money on something they never see, buried hundreds of feet underground. And often, public officials pawn the responsibility off on the next person elected, Kail said.

Repairs tend to be long and costly, especially since many systems were built nearly a century ago, deep underground, where buildings and major roads now stand.

Even monitoring pipes for vulnerabilities can be expensive and tricky, since it's not possible to shut down a city's water supply to test for leaks. If New York were to do that to the Delaware Aqueduct, for example, the 13 1/2-foot-diameter tunnel might crumble under the crushing weight of the land without the water to support the duct.

The Department of Environmental Protection monitors leaks by sending water through the tunnel and measuring how much comes out at the end. The department also sends robots that swim through the tunnels and collect data on their condition.

The amount of water being lost is inconsequential, given that reservoirs are so full, said Environmental Commissioner Emily Lloyd. But she said it is important to fix the leaks now because there is no way to tell how the system might deteriorate in the next 30 years.

New York has spent decades digging a new $6 billion tunnel that will create an alternative source of water delivery and allow for easier inspection and repair of the other tunnels. It is expected to be completed by 2020.

Around the country, water rates are going up to help pay for the repairs, estimated at anywhere between $550 and $7,000 per household during the next three decades.

Augusta, Ga., raised rates 11 percent from 2001 through 2007 for a $300 million program to improve the deteriorating water system. Cleveland gradually increased rates by about 6 percent for more than 15 years to fund a $750 million project to address aging and inefficient pipes. Springfield, Mass., doubled rates for its 250,000 customers. Philadelphia, Kenosha, Wis., Portsmouth, Va., and other cities have followed suit.

Many engineers and water utilities say water bills around the country are too low. In New York City, where a studio apartment can rent for more than $3,000 a month, the cost of water and sewage is about $60 for an entire single-family home.

"We are the only utility where the raw material is free, but the infrastructure is the most expensive," said Nick DeBenedictis, chief executive of Aqua America, a water company that serves 3 million people in 13 states. "We have to dig up streets in order to do it, but once we make investments it's good for years."

(This version CORRECTS $480 million to $480 billion.)



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[David]

Another good article. 

April 7, 2008 Issue
Copyright © 2008 The American Conservative



Red State

Forget campaign promises. The next president will face a stack of unpaid bills.

by Nicholas von Hoffman

Imagine three well-dressed people on a sidewalk: a white-haired man in his early 70s, a woman in a pantsuit with the tails of her jacket splitting over a protuberant behind, and a young, spaghetti-thin African-American man. They are absorbed in a dispute, but they carry on in polite, moderated tones.

Across the street, a building is collapsing, another one is on fire, a woman is jumping from the roof of a third structure. Others kneel, gasping for air near inert human forms, more dead than alive. The police, hands clapped to their heads, run to and fro like ants after a squirt of insecticide.

Firefighters arrive, jump out of their glistening red machines, and attach their hoses to the hydrants. But no water comes out.

Not so many feet away, the three continue their disagreement, oblivious to the tumult. .

Thus the presidential campaign soldiers on, all but ignoring the largest economic upheaval since the disaster of 1929. Given the chaotic state of no-longer-so-high finance in America, they have good reason to stay as far away from the daily debacle flooding out of Wall Street and, inch by foot, putting the nation under water.

But whoever wins the White House will enter it under conditions undreamt of when this long presidential season began. Long-held delusional assumptions have ceased to be tenable, owing to the catastrophic brew mixed up by Wall Street.

On day one of his administration, to borrow a phrase from Hillary, John McCain would have to make some agonizing reappraisals of his war policies. His website proclaims, "More troops are necessary to clear and hold insurgent strongholds; to provide security for rebuilding local institutions and economies; to halt sectarian violence in Baghdad and disarm Sunni and Shia militias; to dismantle al Qaeda; to train the Iraqi Army; and to embed American personnel in Iraqi police units. Accomplishing each of these goals will require more troops and is a crucial prerequisite for needed economic and political development in the country." He does not discuss how he is going to pay for the first installment on his vow to camp in Iraq for a century if need be. The United States has been borrowing the funds needed to carry on the war, but those days are over.

Owing to the ever shrinking dollar bill, foreigners are ceasing to buy U.S. government securities. Last year they bought $126 billion less than in 2006. Every war before this was paid for, at least in part, by raising taxes. This time we lowered them and borrowed the money. Although there have been times in McCain's career when he recognized the necessity of raising taxes, of late he has been a hard-line member of the school that believes tax cuts are good for whatever ails. A big thwack at the capital-gains tax rate will cure cancer.

For their part, the two Democrats vying for their party's nomination have left the impression that some of their programmatic ambitions will be paid for by money saved by ending the Iraq War. They would do well to recognize that there is no money to be saved. The best that can be hoped for would be less money borrowed, which will not go far toward paying for things like the "affordable, high-quality child care" Obama's website says he will "provide ... to ease the burden on working families." They may be able to do that kind of thing in Sweden, where they tax the bejabbers out of the citizenry and where, much more to the point, the krona is as rock solid as our greenback is not.

If one of the Democratic contenders is elected, he or she will be hampered by financial constraints while withdrawing from the Iraq conflict. The endgame they envision would take months, or more probably years, and all that time the meter will be clicking.

Both parties have acknowledged that large sums are needed to repair a rusted-out highway system, and the Democrats have been promising a hatful of new or expanded government programs that are extraordinarily costly because they are labor-intensive in fields such as education and health. How they are to be paid for is another matter. Hillary maintains that much of the cost of her health proposals would be met by preventive medicine keeping people from falling sick, an assertion for which there is no evidence.

Raising taxes in today's precarious business environment may only make a bad situation worse. The money will have to be borrowed or printed or both. Not a particularly good idea. Printing money, a modern form of debasing the coin of the realm, causes inflation, a subject none of the candidates is dwelling on but which they may have to talk about as the cost of everything continues its climb. Ben Bernanke has been pumping hundreds of billions into the collapsed veins of the financial system to keep the great banks and investment houses from dying.

The situation the incoming president will find him or herself in is not the same as the one that confronted Franklin Roosevelt and his New Deal. He was able to deficit-spend to his heart's content without causing inflation because there was so much unused capacity in the country. Factories were idle and fields were fallow, so printing money stimulated production rather than driving up prices.

In some previous panics, recessions, and depressions, bankruptcies cleared the field for growth and recovery. After bankruptcy, the company may have folded, the farm may have been foreclosed on, the house taken by the bank, but people at least emerged debt-free, able to begin again. Today the policies being followed are different. Republicans and Democrats both, perhaps without quite realizing it, seem to have agreed that both big financial institutions and homeowners will be kept half alive somehow but left with heavy, paralyzing debt.

Debt taken on to buy new equipment, to develop products and technologies, or for a home is productive, enabling debt. But that is not the kind of debt we have saddled ourselves with. This is unproductive debt, much of which was contracted at the Wall Street version of the roulette wheel. Hundreds of billions of dollars were borrowed and risked on the basis that houses would be worth more next year than last because that's what real estate did. It just went up in value by some alchemical process unavailable to any other segment of the economy.

Secure in this truth, bankers, brokers, and others seeking to make fortunes without rendering useful services told themselves and repeated to the world that, in the whole history of the United States, real-estate prices had never gone down and had always gone up. Aside from the fact that no reliable data exists for such an exuberant claim, people knew it could not be so. In a free market, prices go up and prices go down. They just do.

On this never-down-always-up hypothesis, mortgages were issued by the hundreds of billions and turned into bonds, which were turned into more bonds and used for insanely complicated side bets until a gigantic cobweb debt skyscraper, mounting into the trillions, was erected and now threatens to topple. Nobody fathoms how the thing was put together or how it can be dismantled, but there it stands, endangering whatever hopes and projects an incoming administration may have.

For the time being, the government's response is to try to spend our way out of the crisis. The economic stimulus package will cost $168 billion, which we might borrow from Japan or Germany or the Arabs or anybody—please, help! While our elected officials stand on street corners passing out money, the Federal Reserve is spending more propping up the financial institutions, but come next January, the new administration is going to have to choose between continuing to spend and risking destructive inflation or cutting off expenditures and risking a destructive crash.

The new president may also find that America is not quite the world's sole superpower anymore. Though it is a fixed conviction that the U.S. has gained its special status because of the might of its arms, others know better than to think American power derives from its bathtub toys.

They know that the primary basis of the nation's strength has always been its economy. They saw the hollow military power of the Soviet Union and understood that communism's rotting economic base could not sustain its rockets, its submarines, and its other advanced weaponry.

Moreover, the Soviet ruble was no match for the dollar, the world's reserve currency, the money of international trade, the most sought after and reliable currency. The dollar has been literally as good as gold, which is why foreign governments and individuals have bought so many hundreds of billions worth of U.S. government and non-government notes and bonds.

Dollar power has enabled the United States to dominate the World Bank, the International Monetary Fund, the World Trade Organization, and to have a significant influence on the internal economic and social arrangements of scores of nations. It has made it possible for the American military to secure lodgments around the globe.

A dominant economy has made enabled the U.S. to intervene and guide the world's financial systems and, when America has chosen to do so, cut off and starve states with whom it has inimical relations. Neither Germany nor Japan nor China, three large and wealthy nations, would be taken seriously if one of them were to threaten economic sanctions against a weaker, obstreperous state, but when the United States does, men in distant capitals buckle. At least they used to.

But the dollar isn't the dollar anymore. It does not hold its value as it once did, and it is, month by month, year by year, losing its allure. Thanks to a persistent low-grade inflationary policy and trillions in American debt, ministers of finance, currency traders, and businessmen of all stripes are beginning to turn away from the greenback in favor of the euro or other currencies. The longer this trend continues, the less the range of choices the incoming president will have in the conduct of foreign affairs.

As for ameliorating the international trade agreements many Americans believe have been detrimental, forget about it. In straight power terms, America, now the world's largest debtor nation, cannot raise tariffs to bar creditor nations' merchandise. A person does not order around those to whom he owes money and from whom he is borrowing more.

Far from obtaining concessions from America's creditors and bond holders, the new president will have to worry about what was once an impossibility—that foreign creditors and investors, scared by the diminishing dollar and the inability or refusal of the American government to take remedial steps, will head for the exits or, worse, panic and stampede to get out of dollars and into euros, pounds, yen, and yuans.

On a smaller scale, this is exactly what happened to Bear Stearns. Should such a series of events unfold nationally, Americans will suffer huge inflation, evaporation of savings, bankruptcy, unemployment, and the kind of social strain from which much ugliness and even regime change have been known to flow in other nations that have tripped into this kind of abyss.

None of that need be. There is a way out, but it is not a happy-go-lucky one. The next president will have to tell the nation to man up. The remedy the new White House occupant cannot help but announce is the castor oil of austerity, an indefinite postponement of much that millions want. That's what you do when there is no money and you are in debt. Americans have faced worse in their history. They can do it again.     
_________________________________

Nicholas von Hoffman is a former columnist for the Washington Post and Point-Counterpoint commentator for CBS's "60 Minutes."

[David]

http://nysun.com/news/food-rationing-confronts-breadbasket-world


Food Rationing Confronts Breadbasket of the World
By JOSH GERSTEIN, Staff Reporter of the Sun | April 21, 2008

MOUNTAIN VIEW, Calif. — Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing.

   

Rice is stored at a National Food Authority warehouse at Manila, the Philippines, on April 17.
ROMEO GACAD/AFP/Getty
Click to enlarge>
Rice is stored at a National Food Authority warehouse at Manila, the Philippines, on April 17.

Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.

"Where's the rice?" an engineer from Palo Alto, Calif., Yajun Liu, said. "You should be able to buy something like rice. This is ridiculous."

The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99.

"You can't eat this every day. It's too heavy," a health care executive from Palo Alto, Sharad Patel, grumbled as his son loaded two sacks of the Basmati into a shopping cart. "We only need one bag but I'm getting two in case a neighbor or a friend needs it," the elder man said.

The Patels seemed headed for disappointment, as most Costco members were being allowed to buy only one bag. Moments earlier, a clerk dropped two sacks back on the stack after taking them from another customer who tried to exceed the one-bag cap.

"Due to the limited availability of rice, we are limiting rice purchases based on your prior purchasing history," a sign above the dwindling supply said.

Shoppers said the limits had been in place for a few days, and that rice supplies had been spotty for a few weeks. A store manager referred questions to officials at Costco headquarters near Seattle, who did not return calls or e-mail messages yesterday.

An employee at the Costco store in Queens said there were no restrictions on rice buying, but limits were being imposed on purchases of oil and flour. Internet postings attributed some of the shortage at the retail level to bakery owners who flocked to warehouse stores when the price of flour from commercial suppliers doubled.

The curbs and shortages are being tracked with concern by survivalists who view the phenomenon as a harbinger of more serious trouble to come.

"It's sporadic. It's not every store, but it's becoming more commonplace," the editor of SurvivalBlog.com, James Rawles, said. "The number of reports I've been getting from readers who have seen signs posted with limits has increased almost exponentially, I'd say in the last three to five weeks."

Spiking food prices have led to riots in recent weeks in Haiti, Indonesia, and several African nations. India recently banned export of all but the highest quality rice, and Vietnam blocked the signing of a new contract for foreign rice sales.

"I'm surprised the Bush administration hasn't slapped export controls on wheat," Mr. Rawles said. "The Asian countries are here buying every kind of wheat."

Mr. Rawles said it is hard to know how much of the shortages are due to lagging supply and how much is caused by consumers hedging against future price hikes or a total lack of product.

"There have been so many stories about worldwide shortages that it encourages people to stock up. What most people don't realize is that supply chains have changed, so inventories are very short," Mr. Rawles, a former Army intelligence officer, said. "Even if people increased their purchasing by 20%, all the store shelves would be wiped out."

At the moment, large chain retailers seem more prone to shortages and limits than do smaller chains and mom-and-pop stores, perhaps because store managers at the larger companies have less discretion to increase prices locally.

Mr. Rawles said the spot shortages seemed to be most frequent in the Northeast and all the way along the West Coast. He said he had heard reports of buying limits at Sam's Club warehouses, which are owned by Wal-Mart Stores, but a spokesman for the company, Kory Lundberg, said he was not aware of any shortages or limits.

An anonymous high-tech professional writing on an investment Web site, Seeking Alpha, said he recently bought 10 50-pound bags of rice at Costco. "I am concerned that when the news of rice shortage spreads, there will be panic buying and the shelves will be empty in no time. I do not intend to cause a panic, and I am not speculating on rice to make profit. I am just hoarding some for my own consumption," he wrote.

For now, rice is available at Asian markets in California, though consumers have fewer choices when buying the largest bags. "At our neighborhood store, it's very expensive, more than $30" for a 25-pound bag, a housewife from Mountain View, Theresa Esquerra, said. "I'm not going to pay $30. Maybe we'll just eat bread

[J’raxis 270145]

They can't enforce such quotas if they're not tracking buyers. (I.e., buy a bag, come back in an hour, buy another, ...). Of course, some of these stores are membership stores that require a card in order to purchase products, so they can track you—so stop shopping there.

[Ron Helwig]

My understanding of the whole rice situation is that the price of rice is rising so rapidly that in a few cases the price in the membership stores is less than wholesale. Because of that, wise shoppers are buying as much as they can before the stores are able to raise prices. This leads to temporary runs on stores that temporarily cause shortages.

We aren't at the point yet where we're running out of rice. Grocery prices are rising, and are likely to continue to rise, so buying bulk foods that can be safely stored long-term is a good idea if just for the cost savings.

[John Edward Mercier]

The hording will force the price up for a time, but once everyone has enough of a supply the situation will correct itself. Its like the oil... the price is base on alternative sources and the power struggle between the US and Iran in the Middle East. As the balance shifts, the Saudis will follow Iran's lead.

The savings on the war will more likely go to cover added costs at the pump. As for highways, so much of the gas tax (both federal and State) has been diverted to other uses... not sure how bad it will get.
It will definately have an effect on anything that needs to be transported, whether its an end product or raw material.

The US also has an underlying financing problem with the $4 trillion owed to Social Security. That begins coming due in 2016 and with the loss of surplus funding can't be rolled over within the system... but will needed to be added to market debt.

The financing and expenditures diverged so much... I don't think they'll be able to recover.

[David]

Gary North expressed my sentiments exactly
"I am in favor of tax-free rebates from the Federal government – any time, any place, any amount. Just send out the checks. The taxpayers can do better things with their money than the Federal government can.

So, I am in favor of Federal deficits, if the alternative is higher taxes. I am in favor of lower taxes, even if these lead to higher deficits. I think the Federal government will not cut spending for any reason but one: bankruptcy. So, as long as the beast is going to spend money, it might as well raise it by borrowing. Let the people who trust the government wind up as creditors to the government. When the government defaults, one way or the other, those hurt most will be those who trusted politicians the most. This is as it should be. There is a kind of raw justice in the arrangement. "

Quote from the middle of this article
http://www.lewrockwell.com/north/north622.html