We have screwed ourselves. There is a classic economic model called Lerner Real Interest.
The idea is that interest rate actually measures the needed return on an investment. Market wide, all investments can be compared to each other based on the interest rate of return and for the society as a whole the level of interest determines where investment flows.
Therefore when interest rates are high for the society, investment is only made in high return short period capital. When the interest rate is low, investments are made in long term slow return capital.
Therefore in the current near zero interest rate period, investments should be made in very long return capital. That would be infrastructure. A bridge can take decades to pay off. While a small retail shop can pay off in a few years.
But that isn’t happening in the U.S. Why not? It is happening in Japan where low interest rates for 20 years have resulted in massive infrastructure build out.
I observe two factors: the first and most serious is the EIR. The entire U.S. is under the control of the environmental anti-commerce Left that requires all building, improving, fixing and changing to have an Environmental Impact Report.
These EIR’s are costly and usually require an arcane and obtuse form of change of construction. They always increase the cost of building by a factor of 3x, 5x or 10x. So infrastructure becomes much too expensive to warrant starting in the first place.
The second factor is union pensions. Local municipalities are the main source of funds, via bonds, for infrastructure expansion. Local municipalities have been stuck with unfunded and rapidly growing union pensions. These pensions have been growing so fast that they suck all the funding out of local budgets.
Leaving no funds to cover the vast costly infrastructure. The enviros and the unions have totally screwed us.