5 ms·

The state of US infrastructure, compared to most other advanced countries, is embarrassing (my opinion). At the same time, markets are offering to lend gobs of

by cs702 10y ago

The state of US infrastructure, compared to most other advanced countries, is embarrassing (my opinion). At the same time, markets are offering to lend gobs of money to the US federal government for 30 years at 2.2%/year.[1] Why not take advantage of these low rates to borrow and invest in public infrastructure like sustainable energy generation, modern high-speed transportation, and ultra-fast (100GB) internet connectivity? Put a team of top technology entrepreneurs in charge of awarding all contracts to sidestep corruption and idiocy. Why not? [1] https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i...

michael_fine 10y ago
Honest question -- I always see people argue the need for ultra-fast internet, but I'm not sure what the economic benefit of increasing speeds beyond their current rate of improvement, which in most parts of the country seems reasonably sufficient for the vast majority of work, especially given the bottlenecks are quite often in the home. Would it really provide a comparable increase in GDP/utility to say, improving transport and saving people 30min/day in their commute?
- sliverstorm 10y ago
  Geeks love their internet, so it's always on the list. Only half jest. I understand the idea is, if we build massive pipes, life changing uses of the internet will be invented that cannot even be conceived in today's bandwidth-strangled world.
  - michael_fine 10y ago
    Hmm, have those predictions of life changing uses been borne out in places like South Korea, with actual superfast internet? (Not sarcasm, genuinely wondering)
    - bcello 10y ago
      I work with 3D imagery data, our customers need to upload gigabytes of data and models. Mining customers in certain regions of the US basically have 56k connections. America's infrastructure makes it impossible to do high tech, high bandwidth work. Maybe people only design and build low bandwidth applications because that's all our weak infrastructure can handle. If we had better infrastructure, we would take advantage of it, I guarantee you.
- rm999 10y ago
  I feel like every time internet speeds increase I find reasons why I'd want it to be a bit faster. Currently, 4k video adoption is likely being held back by bandwidth speeds: http://blog.streamingmedia.com/2015/01/4k-streaming-bandwidth-problem.html http://blog.streamingmedia.com/2015/01/4k-streaming-bandwidt... - Youtube recommends encoding 60fps 4k video at 53-68 Mbps, which is beyond many people's internet connections. The business potential of technology rarely arises until the mainstream customer can use it. This study quantifies the gains from a fairly macro perspective: https://www.ericsson.com/news/1550083 https://www.ericsson.com/news/1550083. 0.3% GDP growth for doubling internet speeds seems reasonable and is not unsubstantial. My guess is doubling internet speeds is cheaper than e.g. adding public transportation to even a small number of cities.
  - initram 10y ago
    What's the current market penetration of 4K video? I work in the industry and have no need for a 4K device. How many normal people even want, let alone have 4K capabilities?
    - akiselev 10y ago
      How long did it take for consumers to go from 480p to 720p to 1080p? 4k+ provides little benefit for the average consumer because TVs aren't quite there yet but with VR/AR on the rise, how long with that remain true? There are also huge network effects which may cloud the benefits, until suddenly some mass market consumer application makes it blatantly obvious. Youtube and Skype are so successful because a significant portion of the world has access to fast Internet and microphones/cameras to the point where I can talk to my grandparents in rural Russia despite not being able to visit them in person for almost a decade. What if our Internet was fast enough and our displays cheap enough that working remotely or across international offices becomes as simple as installing several wall sized monitors in geographically spread out rooms? The display tech will get there eventually (just look at the stuff Corning is working on), but if there isn't any infrastructure to utilize the tech it will take much longer for mass adoption. It's a chicken and egg loop but while the technology improves, we have to make the positive decision to invest in infrastructure even if the benefits aren't immediately clear.
- arithma 10y ago
  With a fast enough internet, centralized data centers can become something of a past thing. Companies can start in the garage. AWS can become a thing of the past if networks were strong enough and equal everywhere. It may also be much cheaper to make the internet better than to save time on the commute (easing up the commute can only be incremental and only invites even more people into the traffic.) My opinions may be heavily biased since we have no where even come close to follow up other countries on internet speeds (Lebanon.)
- cs702 10y ago
  All else being equal, the size of an economy seems to be proportional to the size of the networks of people and things that make up the economy. For example, countries with larger populations tend to have larger economies, and countries with better communications and transportation infrastructure tend to have larger economies. It makes sense. The better and more extensive the networks that make up the economy, the easier it is to meet, transact, collaborate, move physical and digital goods back and forth, teach and learn from others, expand markets, compete, etc. As people and things become more connected physically and digitally, the networks that make up the economy get larger -- by definition.
- perseusprime11 10y ago
  If you have a friend in Hong Kong, please ask him the time it takes to download a 1 gig file and also ask him the price he pays for such speeds. I hate it every time when I have to upload my raw and processed photos to cloud using my Fios Internet. In my mind, this is a question of productivity as well not just about downloading movies or watching 4K. If everything is cloud based, we need the cloud to be faster as well as any interaction between the cloud and us to be as fast as possible.
ams6110 10y ago
We never pay it back. We just keep rolling it over, and someday the rates won't be 2% anymore.
- karma_vaccum123 10y ago
  Frankly if the US can get to $19 trillion in debt and not fall over, $4 trillion more won't kill it. All the while, lenders have few other borrowers to have as customers on this scale. China is a black box and Europe is a disaster.
- xenadu02 10y ago
  If we ever paid down the national debt it would be a disaster. The government prints its own currency. The only reason to borrow is to give the market 100% accurate information on exactly how much the government is spending, as opposed to just printing more dollars. As long as the economy grows faster than the debt it can be rolled forever without any major problems. Of course taxes are near historic lows in the post-war period so we can easily pay for it by raising taxes. I'll also point out that the infrastructure spending stimulates the economy, generating tax revenue so the long-term cost isn't perfectly correlated with the immediate price tag. As long as the private sector isn't at capacity (or the spending is limited to actual infrastructure needs) it won't distort the market.
magila 10y ago
Gorging on cheap credit works great until it doesn't, then you're screwed. Even debt on a 30 year timeline has to be repaid eventually. Pushing the limits of how much credit is available leaves a country with no margin left to weather an economic slowdown. See: Argentina at the turn of the millennium. In the USA's case it already took on a huge amount of debt during the last financial crisis. Another round of deficit spending that big would put the US at its highest debt/GDP level ever and firmly into unknown territory as far as just how much credit the world is willing to extend it. Edit: For the US this is an especially dangerous game to play because unlike most other nations, it is too large to be rescued by the IMF.
- Spooky23 10y ago
  The IMF for all intents and purposes is the US. The current international financial system is the white collar version of mutually assured destruction. The dollar is what gold was -- every nation on earth has pallets of $100 bills to conduct trade, buy oil, etc. The US gets to effectively tax the world, and the alternatives are grim. Gold is too scarce. Alternate currencies like the Euro have their own problems, etc. So the smart money is to keep buying those bonds. The end game will be refinancing or inflating it away, but it's in everyone's interest to keep things going.
  - emp_zealoth 10y ago
    My beef with the whole reasoning shown above is: It doesn't even try to argue that the whole nonsense is in any way good, it just goes "WE CANT STOP NOW" Look at the real dollar value of US debt. Then look at exponential graph. Then tell me with a straight face that there is any other way than eventual, utter meltdown of ALL the currencies. Sure, one can fake the GDP with financial shenanigans (so debt-to-GDP doesn't look as bad), packaging and repackaging same shit over and over again, circlejerking it around back and forth until the financial sector baloons the GDP, but the reality will eventually kick in... (You know, Feynmann quote) Meanwhile actual industries are priced at pocket money, companies that make everything that surrounds me right now. How much is gorenje worth? How much are companies that make plumbing worth?
qaq 10y ago
"markets" :) FED holds 10% and other government agencies about 20% more. FED is basically acting as buyer of last resort there is already no buyers for about 10% of debt being issued.
toodlebunions 10y ago
Congress, mostly, is why not.
donw 10y ago
American infrastructure, and a lot of other vital institutions, are in poor shape because waste is highly profitable. Oddly enough, it seems that the more regulated a state is, the more profitable that waste becomes. This isn't to say that some regulation isn't beneficial; for example, the work done by organizations like the FDA and OSHA mostly very good things. But at the same time, we can see plenty of examples of how well-meaning regulation has backfired horribly for the nation: CBOs driving up the cost of healthcare, lowest-bidder laws resulting in dogfood-reject-grade food for kids and the elderly, and the utter nightmare that is trying to build anything in California. The question is not whether or not to regulate, but how to build and implement regulations that are loose enough to allow creative solutions to flourish, while at the same time limiting the impact of malicious or incompetent actors?

by cs702 10y ago

michael_fine 10y ago

Honest question -- I always see people argue the need for ultra-fast internet, but I'm not sure what the economic benefit of increasing speeds beyond their current rate of improvement, which in most parts of the country seems reasonably sufficient for the vast majority of work, especially given the bottlenecks are quite often in the home. Would it really provide a comparable increase in GDP/utility to say, improving transport and saving people 30min/day in their commute?

sliverstorm 10y ago
Geeks love their internet, so it's always on the list. Only half jest. I understand the idea is, if we build massive pipes, life changing uses of the internet will be invented that cannot even be conceived in today's bandwidth-strangled world.
- michael_fine 10y ago
  Hmm, have those predictions of life changing uses been borne out in places like South Korea, with actual superfast internet? (Not sarcasm, genuinely wondering)
  - bcello 10y ago
    I work with 3D imagery data, our customers need to upload gigabytes of data and models. Mining customers in certain regions of the US basically have 56k connections. America's infrastructure makes it impossible to do high tech, high bandwidth work. Maybe people only design and build low bandwidth applications because that's all our weak infrastructure can handle. If we had better infrastructure, we would take advantage of it, I guarantee you.
rm999 10y ago
I feel like every time internet speeds increase I find reasons why I'd want it to be a bit faster. Currently, 4k video adoption is likely being held back by bandwidth speeds: http://blog.streamingmedia.com/2015/01/4k-streaming-bandwidth-problem.html http://blog.streamingmedia.com/2015/01/4k-streaming-bandwidt... - Youtube recommends encoding 60fps 4k video at 53-68 Mbps, which is beyond many people's internet connections. The business potential of technology rarely arises until the mainstream customer can use it. This study quantifies the gains from a fairly macro perspective: https://www.ericsson.com/news/1550083 https://www.ericsson.com/news/1550083. 0.3% GDP growth for doubling internet speeds seems reasonable and is not unsubstantial. My guess is doubling internet speeds is cheaper than e.g. adding public transportation to even a small number of cities.
- initram 10y ago
  What's the current market penetration of 4K video? I work in the industry and have no need for a 4K device. How many normal people even want, let alone have 4K capabilities?
  - akiselev 10y ago
    How long did it take for consumers to go from 480p to 720p to 1080p? 4k+ provides little benefit for the average consumer because TVs aren't quite there yet but with VR/AR on the rise, how long with that remain true? There are also huge network effects which may cloud the benefits, until suddenly some mass market consumer application makes it blatantly obvious. Youtube and Skype are so successful because a significant portion of the world has access to fast Internet and microphones/cameras to the point where I can talk to my grandparents in rural Russia despite not being able to visit them in person for almost a decade. What if our Internet was fast enough and our displays cheap enough that working remotely or across international offices becomes as simple as installing several wall sized monitors in geographically spread out rooms? The display tech will get there eventually (just look at the stuff Corning is working on), but if there isn't any infrastructure to utilize the tech it will take much longer for mass adoption. It's a chicken and egg loop but while the technology improves, we have to make the positive decision to invest in infrastructure even if the benefits aren't immediately clear.
arithma 10y ago
With a fast enough internet, centralized data centers can become something of a past thing. Companies can start in the garage. AWS can become a thing of the past if networks were strong enough and equal everywhere. It may also be much cheaper to make the internet better than to save time on the commute (easing up the commute can only be incremental and only invites even more people into the traffic.) My opinions may be heavily biased since we have no where even come close to follow up other countries on internet speeds (Lebanon.)
cs702 10y ago
All else being equal, the size of an economy seems to be proportional to the size of the networks of people and things that make up the economy. For example, countries with larger populations tend to have larger economies, and countries with better communications and transportation infrastructure tend to have larger economies. It makes sense. The better and more extensive the networks that make up the economy, the easier it is to meet, transact, collaborate, move physical and digital goods back and forth, teach and learn from others, expand markets, compete, etc. As people and things become more connected physically and digitally, the networks that make up the economy get larger -- by definition.
perseusprime11 10y ago
If you have a friend in Hong Kong, please ask him the time it takes to download a 1 gig file and also ask him the price he pays for such speeds. I hate it every time when I have to upload my raw and processed photos to cloud using my Fios Internet. In my mind, this is a question of productivity as well not just about downloading movies or watching 4K. If everything is cloud based, we need the cloud to be faster as well as any interaction between the cloud and us to be as fast as possible.

ams6110 10y ago

We never pay it back. We just keep rolling it over, and someday the rates won't be 2% anymore.

karma_vaccum123 10y ago
Frankly if the US can get to $19 trillion in debt and not fall over, $4 trillion more won't kill it. All the while, lenders have few other borrowers to have as customers on this scale. China is a black box and Europe is a disaster.
xenadu02 10y ago
If we ever paid down the national debt it would be a disaster. The government prints its own currency. The only reason to borrow is to give the market 100% accurate information on exactly how much the government is spending, as opposed to just printing more dollars. As long as the economy grows faster than the debt it can be rolled forever without any major problems. Of course taxes are near historic lows in the post-war period so we can easily pay for it by raising taxes. I'll also point out that the infrastructure spending stimulates the economy, generating tax revenue so the long-term cost isn't perfectly correlated with the immediate price tag. As long as the private sector isn't at capacity (or the spending is limited to actual infrastructure needs) it won't distort the market.

magila 10y ago

Gorging on cheap credit works great until it doesn't, then you're screwed. Even debt on a 30 year timeline has to be repaid eventually. Pushing the limits of how much credit is available leaves a country with no margin left to weather an economic slowdown. See: Argentina at the turn of the millennium. In the USA's case it already took on a huge amount of debt during the last financial crisis. Another round of deficit spending that big would put the US at its highest debt/GDP level ever and firmly into unknown territory as far as just how much credit the world is willing to extend it. Edit: For the US this is an especially dangerous game to play because unlike most other nations, it is too large to be rescued by the IMF.

Spooky23 10y ago
The IMF for all intents and purposes is the US. The current international financial system is the white collar version of mutually assured destruction. The dollar is what gold was -- every nation on earth has pallets of $100 bills to conduct trade, buy oil, etc. The US gets to effectively tax the world, and the alternatives are grim. Gold is too scarce. Alternate currencies like the Euro have their own problems, etc. So the smart money is to keep buying those bonds. The end game will be refinancing or inflating it away, but it's in everyone's interest to keep things going.
- emp_zealoth 10y ago
  My beef with the whole reasoning shown above is: It doesn't even try to argue that the whole nonsense is in any way good, it just goes "WE CANT STOP NOW" Look at the real dollar value of US debt. Then look at exponential graph. Then tell me with a straight face that there is any other way than eventual, utter meltdown of ALL the currencies. Sure, one can fake the GDP with financial shenanigans (so debt-to-GDP doesn't look as bad), packaging and repackaging same shit over and over again, circlejerking it around back and forth until the financial sector baloons the GDP, but the reality will eventually kick in... (You know, Feynmann quote) Meanwhile actual industries are priced at pocket money, companies that make everything that surrounds me right now. How much is gorenje worth? How much are companies that make plumbing worth?

qaq 10y ago

"markets" :) FED holds 10% and other government agencies about 20% more. FED is basically acting as buyer of last resort there is already no buyers for about 10% of debt being issued.

toodlebunions 10y ago

Congress, mostly, is why not.

donw 10y ago

American infrastructure, and a lot of other vital institutions, are in poor shape because waste is highly profitable. Oddly enough, it seems that the more regulated a state is, the more profitable that waste becomes. This isn't to say that some regulation isn't beneficial; for example, the work done by organizations like the FDA and OSHA mostly very good things. But at the same time, we can see plenty of examples of how well-meaning regulation has backfired horribly for the nation: CBOs driving up the cost of healthcare, lowest-bidder laws resulting in dogfood-reject-grade food for kids and the elderly, and the utter nightmare that is trying to build anything in California. The question is not whether or not to regulate, but how to build and implement regulations that are loose enough to allow creative solutions to flourish, while at the same time limiting the impact of malicious or incompetent actors?