Ohio DOT Promised Billions in Road and Bridge Construction It Can't Pay For

Anyone concerned about the 15 Trillion dollar reported Federal deficit should know that it's the tip of a much larger iceberg of looming costs most people don't know about.

Remember, the fight over pedestrian access to the brand new Inner Belt Bridge, Cleveland was gonna get? Surprise, it now looks like a new bridge may not be built till 2020 or later even though the current one may have serious structural issues!

Turns out the State transportation folks just wish listed important projects with little knowledge of how they might be paid for.

For years, the state has "over-programmed" for the money available, Wray said. Project commitments total $3.3 billion through 2017, but only $1.6 billion in revenues is projected for construction, he said.

Meanwhile, revenue from federal and state gas taxes has remained flat, while the costs of maintenance and construction have inflated, he said.

He expects disappointment not only in Cleveland but across the state with the draft list.

The West Shoreway project also doesn't fare well. It is not on the funding list, Wray said, despite a concerted appeal from the city of Cleveland for another $21 million.

Expect this to be an ever growing story. Ironically, in many cases, failing infrastructure offers a grand chance for cities to reinvent themselves in more sustainable ways.

Remember that The West Side Highway, in NY and Embarcadero Freeway in San Fransisco were only removed after partial collapses.

Reality Break

Sorry for the interruption, unfortunately reality is knocking at the door again. It seems like the magic word among those in the know is Sovereign Risk.

Here a hedge fund guy who predicted our current mess and was evil enough to profit from it lays bets on the next big shoe to drop.

First came central bank induced real estate bubble, primarily caused by efforts to keep the Yen low through very low interest rates. Then when the crisis hit, instead of closing bad banks and bankrupt companies (most with political connections) came a decade's long series of bailouts, more and more monetary easing (the stuff that caused the bubble in the first place) and a cycle of greater and greater government stimulus spending on projects people didn't need and the government couldn't afford.

But now after more than twenty years of hiding and evading the pain with piles of government debt; the real pain may just be starting. Japan faces almost certain default or a period of drastic hyperinflation which will wipe out the last savings of it's citizens.

The Wise Chinese

As the U.S. and the west's bubble economy implodes, exposing the thin air at it's core, the political players and crony capitalists have grasped at the hope that they can pull the world's last solvent countries into one last "collective" effort to save themselves.They need a bigger rug to sweep the dirt under. Luckily, it looks like China, which was already burned on U.S. investments will not be in on this. This is wise.

"Asked whether China might pursue economic policies aimed at saving the world, Mr. Lou said that the country’s leaders had a narrower focus. “China can only save herself because the scale of China is still rather small,” he said, adding that while China has more people than any other country, economic output is still low enough that the Chinese economy is not yet big enough to have a big effect on the global economy.

“If China can do a good job domestically, that is the best thing it can do for the world,” he said.

Mr. Lou’s comments represent the clearest statement yet that as global financial markets have plunged this year and economies have slowed, the attention of China’s leaders is turning inward."

The Chinese government seems to have a grip on how small it's economy still is and how much it needs to retain it's currency reserves and savings to boost it's own productivity.

They also are rightly afraid of the ever changing legal and financial environment in America with it's ever changing soup of programs and bailouts sold as way to "instill confidence in the markets."

"Mr. Lou said that the sheer pace of new initiatives and new rules issued by Western regulatory agencies was disconcerting and made it even harder for him to choose worthwhile investments. “If it is changing every week, how can you expect me to have confidence?” he asked."

That leaves the government ever more reliant on the printing press to fund it's schemes.