More about the Streets

In a recent post, we made the case for looking for the distress in the objective, as opposed to believing what people are saying. Upon further investigation, it seems decay in public spaces is fairly prevalent around the USA. Here's a short list of things to look for besides potholes: grass growing in the streets; wash-outs due to leaking or bursting water or sewer lines; gravel patchwork in place of asphalt resurfacing; crumbling curbs and sidewalks; grown-over sidewalks; rails, wood posts, wood planks, concrete, or other former roadways protruding through the asphalt; neglected safety-painting and centre lines; rusting signs and guard-rails, if present; obsolete guard-rails (does not apply to Vermont).

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As every profligate who has blown through an inheritance knows, at first - when your spending exceeds your income - the erosion of your capital is very slight. If spending is not cut, more and more of the capital is drawn upon and spent until it is completely exhausted.

Such is the position many households, and in the USA, society as a whole finds itself. Society is collectively taking draws upon its stock of sunk capital even as it degrades (for example, roads). Even worse, many investments made during the 'good years' are beginning to be seen as malinvestments, not only not producing any income, but also being a squandering of the resources deployed.

A good deal of the 'investments' of the last 50 years or so, are turning out to be malinvestments: the Interstate Highway System and Suburbia to name two stand-out examples. Not only will these investments stop producing income, there will be little to nothing to recover from their ruins to deploy elsewhere. Rubbing salt in the wound, so-to-speak, is the galling fact that the building of that Way of Life destroyed much of what came before and could still be producing value had it not been destroyed - for example, the enormous package shipping industry on the Nation's inland waterways and in its inland coastal towns, or the dense mixed-use neighborhoods of the Nation's cities.

If there is to be a recovery from this Depression, it will rest on a rebuilding of capital - both private and public. Savings rates will need to rise to levels currently considered inconceivable by almost everyone except East Asians: in the neighbourhood of 50% of income. We doubt that this might come to pass in any sort of timely fashion to halt further tremendous decay of the USA's cities, utility systems, and household finances.