Synergy Costs

There has always been some synergy between the private sector and the federal government in the US. This synergy was restricted to select critical infrastructure that crossed State lines and improved the movement of goods.

In the US, private sector companies and individuals were historically responsible for their own economic survival. Governments’ historic responsibilities included the development of the US economy, but using federal government funds for anything beyond its “enumerated powers” responsibilities were avoided by Congress until 1872.

State governments had a greater responsibility for economic development and more flexibility than the Federal government. States have always been competitors. States were responsible for roads, bridges and ports and quickly delegated local projects to county and city governments.

There were exceptions. Hamilton had no problem with using federal funds for economic development. Jefferson wanted the Federal government to remain compliant with the US Constitution.

The Treaty of Paris ended the French Indian War (1756-1763) and ceded territories west of the 13 colonies to the Mississippi River from France to Britain and ceded the Louisiana Territory to Spain who later gave it back to France.

https://en.wikipedia.org/wiki/French_and_Indian_War

In 1803, the Federal government bought the Louisiana Territory for $15 million from France to provide new territories west of the Mississippi River for new States to be established..

In 1792, Congress authorized the creation of a private company to sell bonds and fund the development of the Erie Canal that was completed in 1825 for $7 million. It connected the Hudson River with Lake Onterio. This allowed New York to move goods more efficiently and established more ports to the Atlantic Ocean.

http://www.sjsu.edu/faculty/watkins/eriecanal.htm

In 1811, Congress funded the 620 mile long Cumberland Road that was completed in 1837 to move goods from Cumberland Maryland to the Ohio River.

https://en.wikipedia.org/wiki/National_Road

Synergies currently exists between industries and government and consumers that are both positive in their utility and negative in their excesses. US industries, governments consumers lack fiscal discipline.

US Household Debt rose to $14 trillion as of 6/30/19. US Corporate Debt stood at $15.2 trillion as of 1/1/19. US Government Debt stands at $22.5 trillion.

Credit - Consumers are prone to buying what they need and what they want. Consumers have not paid cash for over 100 years, they now rely on credit.  Bankers benefit from borrowing as their legacy revenue stream. They also benefit from buying assets that appreciate over time like commercial property and businesses. Bankers like inflation. Consumers hate inflation.

Loans - From the 1950s to the 1980s, inflation was high. US consumers had no incentive to save. Ready access to loans encouraged consumption. The price of new cars rose from $1500 to $7000. Most families owned homes that would appreciate in value and had a mortgage. They also had cars that depreciated in value and made car payments. This continues today, but many families are renters.

Credit Cards – In the 1930s, commercial customers could use a “charge plate” vendors would use when their customers ordered materials. In the 1940s, airlines offered “air travel cards” travelers could use to secure an airline ticket and pay the airline later. In the 1960s “credit cards were established by banks and appeared in the mail to their customers. In the 1970s, the processing of credit card purchased was computerized.

https://en.wikipedia.org/wiki/Credit_card

There are shared costs between government and the private sector to establish and maintain our utilities and roads.

Hydro Electricity – The cost to a county to develop and complete a reservoir for a hydroelectric dam is a shared cost.  The county pays for land acquisition, location, design, deconstruction and grading. The electric company pays for the hydro plant construction, machinery, distribution systems, operation and maintenance. We need more Hydro and more reservoirs to retain and manage our rain water.

Natural Gas Utility companies receive easements from counties and dig gas lines to connect gas storage to customer’s homes and buildings. They have kept gas prices stable and fracking has increased US natural gas production.

Water & Sewer companies receive easements from counties and dig water distribution lines from clean water storage to customers’ homes and buildings and dig sanitary sewer lines from customers’ homes of dirty water to waste and water treatment plants. These companies need to redouble their maintenance to end water and sewer leaks.

Storm Sewers are built by counties to manage rainfall with county staff and Contractors to install storm sewers and pipe systems from roads to designated ponds, creeks and rivers. The good news is that cities and counties are installing storm sewer pipes made from composite material that last over 100 years.  The big expense for this is excavation and rather than replacing rusted corrugated pipes that last 25 years, we are using materials that last 100 years.

Roads – The cost to a county to develop and complete new roads includes land and building acquisition cost, design, construction and maintenance.  Counties with fully equipped Road Crews or private sector Contractors provide project management, equipment, operators and laborers to install or maintain the roads. Private sector companies provide the concrete, gravel, asphalt and surfacing material.

Healthcare – US per capita healthcare cost has risen from $147 per year in 1960 to $10,739 in 2018. We’ve endured decades of lethal cancer treatments. We spend $3.5 trillion a year. We need to repeal Obamacare and base insurance premiums on coverages chosen and risk. The 5% who are very poor and very sick can get Medicaid. The rest can get major medical. It’s time to deregulate and end the medical cost drivers.

Education – US college tuition has risen from $1000 per year in 1960 to $10,230 per year in 2018.  K-12 spending in 2018 was $649 billion. The US performance had dropped from 1^st place to 17^th place. We need an entirely new government-free education system.

The predators in this drama are government, excessive fees and fines, land speculators, unsustainable government pension plans, oversized easements, oversized intersections, incompetent crony contractors who are not the low bidders and city managers who are dependent on cronies and the Deep State for their next job. Government underspends on essentials and overspends on nonessentials.

Norb Leahy, Dunwoody GA Tea Party Leader