Morning Must Reads: This Isn't The Dual Mandate You're Looking For

The Federal Reserve, which through its control of the money supply is in charge of one of the key levers for regulating the pace of economic growth, is guided by a dual mandate over inflation and unemployment. If consumer prices begin rising too fast, the Federal Reserve will act to slow economic activity. Likewise, when unemployment rises, the Federal Reserve will act to boost economic growth.

On Wednesday, the Federal Reserve acknowledged that the economy appears to be growing more slowly than anticipated but opted to take no steps to boost growth. This decision elevated concern about the potential of future inflation over the currently high U.S. unemployment rate of 8.2% (Pennsylvania's rate is 7.5%).

The Federal Reserve said Wednesday that the U.S. economy is losing strength and repeated a pledge to take further steps to stimulate growth if the job market doesn't show sustained improvement.

The Fed took no new action after a two-day policy meeting. But it acknowledged in a statement released after the meeting that economic activity had slowed over the first half of the year. It also said unemployment remains elevated and consumer spending is rising at a somewhat slower pace.

The Federal Reserve's decision is disappointing but comes as the more effective tools available to boost growth, the tax and spending power of Congress, remain caged until after November's election. The Philadelphia Daily News, commenting on three water-main breaks in the last 10 days, points out that with the economy weak, there is no shortage of infrastructure projects that could be financed to both reduce unemployment and improve quality of life. And with unemployment high and U.S. borrowing costs at historic lows, it will never again be as cheap as it is now to make needed infrastructure investments.

Is the world falling apart? On Wednesday, one day after 670 million people in India — about 10 percent of the world's population — lost electrical power, residents of North Philly coped with the third water-main break in the city in 10 days.

Philadelphians and New Delhians are sharing more than a miserable summer (though, actually, it's the rainy season in India); they are forced to cope with a history of inattention to infrastructure that suggests that there is no end in sight for such disasters. This week hits home that infrastructure is literally a global problem, one that must be addressed far better than it has to date...

But the fact remains that the department is scrambling to replace aging mains and pipes. It costs $1.3 million to replace one mile of water main; replacing a mile of sewer is more than double that. Which is why the Water Department is holding hearings on a 28-percent rate hike; some of that is needed for infrastructure. (The majority is for stormwater, wastewater and water quality.)

Many cities around the country are staggering under the weight of coping with aging water infrastructure and systems. But maybe that's a good thing: such problems at least focus attention on the one thing we usually take for granted and expect to flow forever free. But water management is not just the job of the utilities that provide it. It's the responsibility of all of us.

That's why the feds should step up their game in encouraging better water systems. But their performance is woeful: federal dollars to help municipalities deal with the expense of fixing their aging systems has shrunk. According to a report in the New York Times, federal water-infrastructure spending has declined from about 75 percent in 1978 to less than 5 percent, leaving the expensive problem for state and local governments to fix.

One estimate from the EPA says that we are $22 billion short on water systems spending.

The state's response is no better. In fact, Gov. Corbett has done little to address the wider infrastructure problem, other than putting a commission together. But the roads, bridges and transit systems of the state also are crying out for repair.

The bigger lesson here: The longer we put off fixing infrastructure, the more expensive the damage becomes — far more expensive than maintaining it ever was. Lives and health are at stake, both at home and halfway around the world. It's time for people to put pressure on their leaders to start paying attention.


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