Crumbling Infrastructure Has Real and Enduring Costs

Anyone who travels abroad can see that the United States no longer has a world-class infrastructure. And there’s hard evidence to back up that impression. The World Economic Forum compiles a massive annual “Global Competitiveness Report.” The 2012-2013 edition finds that the United States has fallen well behind many members of the European Union, Canada, and Asian countries such as Singapore, Japan, and South Korea in the overall quality of its infrastructure. We rank 18th in railroads, 19th in ports, 20th in roads, 30th in airports, and 33rd in the quality of our electrical system.

An outstanding new report from the Building America’s Future Educational Fund explains why this has happened. Relative to our economic competitors, we have no national infrastructure planning, we systematically underfund infrastructure investments, and we fail to use rigorous measures of evaluation and accountability for the projects we do manage to fund. This makes for a drag on our economy. One example: in 2010, Americans spent a total of 4.8 billion hours stuck in traffic, wasting 1.9 billion gallons of fuel, at a total cost of $101 billion.

And it will only get worse. According to the Building America’s Future report, by 2020, every American port will be struggling to cope with at least twice the tonnage it was designed to handle. While a projected 94 percent of the nation’s economic growth will occur in metropolitan areas, these jurisdictions are already home to “the most congested highways, the oldest roads and bridges, and the most overburdened transit systems,” with no relief in sight. The report warns that “if we don’t create a transportation system that functions reliably and cost-effectively in the 21st century, companies operating in this globalized world can simply choose to do their business elsewhere.”

But before it comes to that, the American economy will pay a steep price. Another report, from the American Society of Civil Engineers, lays out the projected costs, sector by sector. Here’s the bottom line: by 2020, if the mounting investment gap in infrastructure is not addressed, “the economy is expected to lose almost $1 trillion in business sales, resulting in a loss of 3.5 million jobs . . . the cumulative cost to the U.S. economy will be more than $3.1 trillion in GDP and $1.1 trillion in total trade.”

These numbers would appear large enough to arrest the attention of even the most jaded policy makers. This has not happened. Instead, current fiscal trends and policies portend a long-term squeeze on domestic discretionary spending—the pool of funds from which federal infrastructure investment is drawn. Innovative plans for federal government partnerships with the private sector to leverage scarce public resources have not gone forward in some instances and have fallen well short of adequate scope in others. While things have gone better at the state and metropolitan levels, aggregate investment continues to fall far short of needs—by an estimated $1.1 trillion between now and 2020, according to ASCE projections.

As the Building America’s Future report observes, most of our global competitors have access to infrastructure banks that attract private capital to fund major projects. A recent Brookings report has proposed one model for such a bank in the United States. (There are several others.) Sound proposals to break through the current impasse in infrastructure funding are not hard to find. It has proved much more difficult to mobilize elected officials and average citizens around plans that will require higher taxes and fees upfront in return for a stronger economy and better quality of life down the road.

One of the key tests of democratic self-government is each generation’s ability to overcome chronological myopia and provide for the future that its children and grandchildren will enjoy. Throughout history, Americans have found a way to do that—from the canals and roadways of the early 19th century to the Civil War-era Transcontinental Railroad to Theodore Roosevelt’s Inland Waterways Commission to FDR’s bridges, tunnels, and airports that put millions back to work during the Great Depression, to Dwight Eisenhower’s visionary Interstate Highway System, begun in the 1950s and still benefitting the nation two generations later. It remains to be seen whether today’s Americans will muster the will and resources to do as well for their posterity.