America’s infrastructure deficit

President Bill Clinton was accused of playing word games when he described his government spending proposals as “investments.”

But what is an investment?  Investment is an expenditure that creates new wealth, or maintains the nation’s ability to produce wealth.

We need a minimum of military spending so that our armed forces can defend the nation, but this is not an investment.  I am in favor of giving a minimum of support the elderly and the disabled, but this is not an investment.

Spending money on scientific research is an investment, because new knowledge is of economic benefit.  Spending money on public education is an investment, because an educated public is of economic benefit.   Maintenance of the basic physical infrastructure is an investment, because well-functioning transportation, communication and water and sewerage utilities are necessary to a functioning economy.

The United States has allowed its physical infrastructure to shockingly deteriorate.  The Urban Land Institute issued a report saying that it will take $2 trillion to rebuild roads, bridges, water lines, sewerage systems and dams now nearing the end of their life cycles.

The report envisions a time when, like Detroit, U.S. cities may opt to abandon services in some districts and when lightly used blacktopped rural roads would be allowed to return to nature.  Eventually, the report says, the federal gasoline tax will be increased; local governments will be allowed to toll interstate highways; water bills will rise to pay for pipe and sewer replacement; property and sales taxes will increase; and private, profit-seeking companies will play a much larger role in funding and maintaining public projects.

“Over the next five to 10 years, public concerns will grow over evident declines in the condition of infrastructure,” the report says.  “At some attention-getting point after infrastructure limps along, platforms for reinvesting in America could gain significant traction and public support.”

… …The report says the desire of Congress to curtail spending will push costs onto “budget-busted” state and local governments.  It points to highways and water treatment plants, built with federal funds 40 to 50 years ago, that will become financial burdens to local governments as the time comes for replacement.

via The Washington Post.

The American Society of Civil Engineers gave the United States a “D” grade for maintenance of its infrastructure in its latest four-year report, in 2009.  The ASCE’s price tag for rebuilding is $2.2 trillion.

Now is the time to do something.  There are millions of unemployed people available for work.  Interest rates are at historic lows.  The condition of the deteriorating infrastructure won’t get any better with time. Maintaining the infrastructure shouldn’t be regarded as a discretionary expense.  Deferred maintenance is a kind of deficit.

Despite or maybe because of the Great Depression, a lot of great things were constructed in the 1930s.  Boulder Dam (later renamed Hoover Dam) was in its day the largest single structure built by human beings.  It was started in 1931, under the Hoover administration, and completed in 1936.  The San Francisco Bay Bridge, completed in 1936, was another engineering wonder in its day.  Now it is crumbling.  On a smaller scale, when I was growing up, all the public buildings in my home town of Williamsport, Md., had been built by the WPA (Works Progress Administration) in the 1930s.

An infrastructure  program should not be considered a stimulus program.  A stimulus program would be aimed mainly at spreading money around so that people will start spending again.    An infrastructure program is aimed at doing what most needs doing in order to keep the country functioning.  It may contribute to stimulating other economic activity, but that is not its priority.

While stimulus programs may have worked in the past, the problem now is that many people are so heavily into debt that they wisely prefer to pay down their debt than to increase their spending.  And it doesn’t make sense for the government to increase the American people’s debt as taxpayers in order to help their get rid of their individual debt.  The best way to stimulate the economy is to spend money on things that will make it more productive.

President Obama, like President Bush before him, has called attention to crumbling infrastructure.  Why hasn’t more been done?  Some in Congress are simply opposed to spending—any spending, no matter on what.  Others think that the money will be dissipated on scattered, pork-barrel projects, with nothing of lasting significance being done.

Conservative commentator David Frum advocates a public infrastructure bank.  He said it would remove infrastructure spending from pork-barrel politics and ensure the money would be spent wisely.

Click on Infrastructure Money Should Buy Us Things Worth Having for Frum’s thoughts on how infrastructure investment should be handled.

Unfortunately, the Republicans in Congress do not agree.  Their new appropriations bill not only rules out an infrastructure bank, but makes deep cuts in the requested budget for infrastructure spending.


Click on New Republican Highway Bill Nixes National Infrastructure Bank for a report on Republican opposition to infrastructure spending


Click on The Bank Not Built for a report on an earlier infrastructure bill co-sponsored by Democratic Senator Chris Dodd and Republican Senator Chuck Hagel.

Click on Kerry, Hutchinson Propose National Infrastructure Bank for a report on an infrastructure bill co-sponsored by Democratic Senators John Kerry and John Warner and Republican Senator Kay Bailey Hutchinson.

Click on For a National Investment Bank for a proposal by Robert Skidelsky and Felix Martin [Added 7/21/11].

Click on The Case for Not-So-High-Speed Rail for a Washington Monthly article on the case against a glamorous high-speed bullet train system and rebuilding our existing rail system instead.

Click on Study: $2 trillion needed for U.S. infrastructure for the Washington Post article on the study by the Urban Land Institute.

Click on Report Card for America’s Infrastructure for the 2009 report of the American Society of Civil Engineers.  The ASCE gives the United States a “D” for its infrastructure, and estimates the cost of upgrading at $2.2 trillion.

I largely agree with what Fareed Zakaria said in the video above, except for the implication that an infrastructure bank could be used as a lever for privatization of public services.  Privatization is not, in my opinion, a solution to the problem of infrastructure deterioration.  Whether it is or not, it is a separate issue, and should not be tied to infrastructure funding.

Click on Let’s stop acting like a Third World country for my earlier post and more links on this subject.

[10/5/11.]  I was wrong to endorse this proposal.  We the American public need to repair and rebuild our public works, but we don’t need to subsidize private companies in the process.  Click on The Infrastructure Bank Scam for an explanation of how this works.

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