In the United States today, with partisan polarization at record levels,
there is still at least one policy goal on which there is broad
consensus, not only among Republicans and Democrats, but also among
business and labor leaders, states and cities, and ordinary citizens:
infrastructure.
The US has been short-changing infrastructure for years. Historically, federal, state, and local governments have together invested about 2.5% of GDP in non-defense infrastructure assets. But, over the last 35 years, federal investment as a share of GDP has dropped by more than half.
For a long time, state and local governments were able to cover the shortfall, increasing their contribution to three quarters of total spending. But when the Great Recession hit, states and cities were forced to slash their budgets. As a result, in the second quarter of this year, total public expenditure on infrastructure fell to an estimated 1.4% of GDP, the lowest share on record.
This is all the more worrying, given the already-poor state of US infrastructure, which earned a grade of D+ from the American Society of Civil Engineers in its 2017 quadrennial report. Almost 20% of US highways are in disrepair. The costs and consequences of deferred maintenance are apparent everywhere, and almost every city and state has its horror stories: dysfunctional subways in New York City, lead-contaminated drinking water in Flint, Michigan, the near-collapse of a major dam in Oroville, California.
The report estimates that restoring US infrastructure to “a state of good repair” would cost $4.6 trillion between 2016 and 2025. That is $2.1 trillion more than has been committed so far. Developing new funding sources for infrastructure investment is therefore critical.
Read more: How Trump Could Rebuild America by Lenny Mendonca & Laura Tyson - Project Syndicate
The US has been short-changing infrastructure for years. Historically, federal, state, and local governments have together invested about 2.5% of GDP in non-defense infrastructure assets. But, over the last 35 years, federal investment as a share of GDP has dropped by more than half.
For a long time, state and local governments were able to cover the shortfall, increasing their contribution to three quarters of total spending. But when the Great Recession hit, states and cities were forced to slash their budgets. As a result, in the second quarter of this year, total public expenditure on infrastructure fell to an estimated 1.4% of GDP, the lowest share on record.
This is all the more worrying, given the already-poor state of US infrastructure, which earned a grade of D+ from the American Society of Civil Engineers in its 2017 quadrennial report. Almost 20% of US highways are in disrepair. The costs and consequences of deferred maintenance are apparent everywhere, and almost every city and state has its horror stories: dysfunctional subways in New York City, lead-contaminated drinking water in Flint, Michigan, the near-collapse of a major dam in Oroville, California.
The report estimates that restoring US infrastructure to “a state of good repair” would cost $4.6 trillion between 2016 and 2025. That is $2.1 trillion more than has been committed so far. Developing new funding sources for infrastructure investment is therefore critical.
Read more: How Trump Could Rebuild America by Lenny Mendonca & Laura Tyson - Project Syndicate
