**Fiscal Discipline da 2
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- Federal infrastructure spending is wasteful and full of cost
LinksLink-Infrastructure GenericUS must stop new spending initiatives to save the economyHunt, PhD in Economics from Temple University and Vice President of Hoisington Investment Management Company, 12 [Lacy, interviewed by The Gold Report, “Economic Recovery Via Shared Sacrifice, Cutting Government Spending, Deficit and Debts,” May, 17, 2012, http://www.marketoracle.co.uk/Article34706.html]bg TGR: Exactly how does a country's role in world markets come into play when it comes to devaluing currencies? LH: A major economy that tries to correct debt problems by dropping the value of its currency will bring on immediate retaliation—and a race to the bottom. In today's world, devaluation is not really an option. This isn't new. Starting in the late 1920s, there had been a huge build-up of debt around the world. Some of the heaviest build-up was in resource countries. We were on the gold standard at the time. The Dutch East Indies devalued because it could no longer service its debt and then Australia shortly thereafter. They gained a momentary advantage, but lost it when competitors in Latin America and elsewhere also were forced to devalue. By 1931, the British devalued. A lot of the countries that had devalued previously devalued more. The U.S. tried to hang on to the gold standard, but between April 1933 and January 1934, the U.S. devalued by 60%. It had been devastated by a loss of export markets, as everyone else had been devaluing. Like the Dutch East Indies and Australia in the late 1920s, the U.S. temporarily regained some benefit, but lost it when France and the gold bloc countries devalued in 1937 and 1938. Then, when the U.S. entered World War II, a tremendous surge in exports took place. We were able to sell anything American mines, factories and farms could produce. Its citizens were paid for that work, but with mandatory rationing, they couldn't spend the money they were making. They couldn't buy new cars, washing machines and houses. TGR: The result was forced savings. LH: People were willing to stand for the austerity because we were in an endeavor they believed was worthwhile. If they needed 10 pounds of sugar and could only get one, they took it. If they needed 20 gallons of gasoline and they could only get five, they stood for it. So they saved their funds. The saving rate went up to 25% for three consecutive years. We paid off the debt. By the end of World War II, the U.S. was a wealthy nation once again, and it fueled the post-war boom. LH: In the current environment, the European countries that are in trouble don't want austerity. France's budget deficit is deteriorating badly, but it's quite possible that it's going to engage in more deficit spending. It's not as bad as in Italy and Spain, but France already has a massive problem. TGR: What if the European Central Bank (ECB) decided to devalue the euro? Would it just be the first domino to fall? LH: Yes. It would start another race to the bottom. TGR: What would happen to investments? LH: Investment values would decline. It would be chaos. TGR: We'd only have bonds in the secondary market at that point. LH: You wouldn't want to be in debt. And you'd want assets you can control and have complete confidence in—assets such as an income-producing property that you're confident of the income stream or if you have an asset that is perfectly acceptable in exchange. Europe today has not yet really gone to austerity. The ECB policy objective was to try to stimulate a recovery, boost the revenue base and bring their deficits under control. These bridge financings didn't solve the underlying problem. Instead, their economies deteriorated and the deficits worsened. TGR: So if there is no willingness to save, will the endgame be either that bang point or QE? LH: I think it will be the bang point, but it's hard to say. TGR: If they go with the bang point, forced austerity would reverberate through other countries that export to Europe. LH: There is a pathway out for the U.S., but it requires very intelligent uses of what we know about the multipliers for government expenditures, what we call the tax expenditures or loopholes, the marginal tax rates and general behavior. The U.S. has too much debt now and will have even more. The government expenditure multiplier is very close to zero; it might even be slightly negative. So the U.S. needs to cut down government spending, but is not going to be able to do so unless there's shared sacrifice by taxpayers. The magnitude of the problem is too great. Federal infrastructure spending is wasteful and full of cost overrunsEdwards, director of tax policy studies at the Cato Institute, 11 [“Infrastructure Projects to Fix the Economy? Don't Bank on It.,” Chris, Cato Institute, http://www.cato.org/publications/commentary/infrastructure-projects-fix-economy-dont-bank-it]bg For plenty of examples of the downside of federal infrastructure, look at the two oldest infrastructure agencies — the Army Corps of Engineers and the Bureau of Reclamation. Their histories show that the federal government shouldn't be in the infrastructure business. Rather, state governments and the private sector are best equipped to provide it. The Corps of Engineers has been building levees, canals and other civilian water infrastructure for more than 200 years — and it has made missteps the entire time. In the post-Civil War era, for example, there were widespread complaints about the Corps' wastefulness and mismanagement. A 1971 book by Arthur Morgan, a distinguished engineer and former chairman of the Tennessee Valley Authority, concluded: "There have been over the past 100 years consistent and disastrous failures by the Corps in public works areas ... resulting in enormous and unnecessary costs to ecology [and] the taxpayer." Some of the highest-profile failures include the Great Mississippi Flood of 1927. That disaster dramatically proved the shortcomings of the Corps' approach to flood control, which it had stubbornly defended despite outside criticism. Hurricane Katrina in 2005 was like a dreadful repeat. The flooding was in large part a man-made disaster stemming from poor engineering by the Corps and misdirected funding by Congress. Meanwhile, the Bureau of Reclamation has been building economically dubious and environmentally harmful dams since 1902. Right from the start, "every Senator ... wanted a project in his state; every Congressman wanted one in his district; they didn't care whether they made economic sense or not," concluded Marc Reisner in his classic history of the agency, Cadillac Desert. The dam-building pork barrel went on for decades, until the agency ran out of rivers into which it could pour concrete. Looking at the Corps and Reclamation, the first lesson about federal infrastructure projects is that you can't trust the cost-benefit analyses. Both agencies have a history of fudging their studies to make proposed projects look better, understating the costs and overstating the benefits. And we've known it, too. In the 1950s, Sen. Paul Douglas (D-Ill.), lambasted the distorted analyses of the Corps and Reclamation. According to Reisner, Reclamation's chief analyst admitted that in the 1960s he had to "jerk around" the numbers to make one major project look sound and that others were "pure trash" from an economics perspective. In the 1970s, Jimmy Carter ripped into the "computational manipulation" of the Corps. And in 2006, the Government Accountability Office found that the Corps' analyses were "fraught with errors, mistakes, and miscalculations, and used invalid assumptions and outdated data." Even if federal agencies calculate the numbers properly, members of Congress often push ahead with "trash" projects anyway. Then-senator Christopher Bond of Missouri vowed to make sure that the Corps' projects in his state were funded, no matter what the economic studies concluded, according to extensive Washington Post reporting on the Corps in 2000. And the onetime head of the Senate committee overseeing the Corps, George Voinovich of Ohio, blurted out at a hearing: "We don't care what the Corps cost-benefit is. We're going to build it anyhow because Congress says it's going to be built." As Morgan noted in his 1971 book, these big projects have often damaged both taxpayers and ecology. The Corps, Reisner argues, has "ruined more wetlands than anyone in history" with its infrastructure. Meanwhile, Reclamation killed wetlands and salmon fisheries as it built dams to provide high-cost irrigation water to farmers in the West — so they could grow crops that often compete with more efficiently grown crops in the East. the country. Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. 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