Posts Tagged ‘National infrastructure bank’

America’s infrastructure deficit

July 12, 2011

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.