The Best Investment Our Country Ever Made
The suits in Washington, D.C. are arguing about how many trillions of OUR dollars they want to spend on education, climate change, immigration reform and expanding the social safety net.
Idiots … if they want to look at a productive way to spend OUR money, they should look at what President Dwight D. Eisenhower did 65 years ago.
On June 29, 1956, Eisenhower signed the act that created the U.S. Interstate Highway System. The legislation came with $25 billion in initial funding, making it the nation’s largest public works project at that time.
|Source: U.S. Department of Transportation|
The Federal Aid Highway Act called for the construction of 41,000 miles of highway over a 10-year period. It came with a way to pay for it — through new taxes on gasoline, diesel, cars, trucks, tires and buses.
That money went into a Highway Trust Fund. The federal government picked up 90% of the tab via those new taxes, while states paid for the rest.
It was one of those remarkable occasions when the government was there to help … and it did.
Remember When It Took Four Hours to Go 60 Miles?
My father was a rural vegetable farmer long before our roads were built and connected to the rest of the country’s.
We saw very little of him during the spring, summer and fall.
He put in long hours tending to radishes, onions and other crops. And three nights a week, he traveled to sell that produce.
My mother made sure we had family time during those nights.
She would pack a bento box to sustain the three of us during the two-hour drive from our Tacoma, Wash., farm to the wholesale markets in south Seattle that bought his vegetables.
That was two hours … one way!
The wholesale market was only a little over 30 miles away. It took us that long to get there before the freeway — today’s Interstate 5 — was built.
|Source: Google Maps|
Today, travelers can make that trip in about 30 minutes (without traffic).
The old highway used to have 50-plus stoplights and stop signs. It was so congested, drivers seldom went faster than 30 to 35 miles an hour.
That was a long ride for a young, energetic boy. But we always stopped at a hamburger stand (Dag’s Burgers) that sold three hamburgers for $1.
I really grew to love those cramped-but-memorable trips.
Nine ‘Extra’ Hours in the Week
I also remember how happy my father was when the new freeway opened.
I-5 is the main north-south highway that runs from San Diego up to the U.S./Canada border. The Seattle-Tacoma section that my father traveled was completed in 1967.
The time it took to make the roundtrip delivery to the wholesale market shrank from four hours to a just over one.
For a hardworking farmer who routinely worked 100 hours a week during the summer, that time savings was a godsend.
The Great Paving
The Interstate Highway System took 35 years and about $114 billion to complete — about $500 billion in today’s dollars.
• This 41,000-mile transportation system — including the 30 miles that my father drove — may be the best investment our country ever made.
This project has returned more than $6 in economic productivity for each $1 it cost.
This positioned our country for decades of unprecedented prosperity and economic growth.
That’s the right way to spend our tax dollars.
Our 60-Year-Old Roads Are in Disrepair
This system was officially completed in 1992 — which means our interstate highway system urgently needs repairs ... especially since the work began more than 60 years ago.
The National Highway System (NHS) is 223,257 miles of roads and accounts for 55% of all vehicle miles driven each year.
The American Society of Civil Engineers (ASCE) continually gives poor ratings to our country’s pipes, roads, bridges, dams and other structures.
ASCE hasn’t given our roads a grade above a "D+" for the past 20 years.
According to our Weiss Ratings, anything in the “D” range is a “Sell” … and a “C-” means “Hold” or avoid! We rate assets that you can invest in, not roads. But our letter grades appear to be in line with ASCE’s.
• This year, ASCE gave U.S. infrastructure a “C-” … and it said we need to spend $6 trillion over the next 10 years to get it to minimum standards.
I do think that we’ll see some type of infrastructure spending plan in the near future, and we will see a handful of stocks take off when that happens.
Companies like Brookfield Infrastructure Partners (NYSE: BIP), Enbridge (NYSE: ENB), Caterpillar (NYSE: CAT) and Nucor (NYSE: NUE) will have more business than they can handle.
That’s how I want my money spent … on roads AND on companies that will help us pave our way to profits.