U.S. Infrastructure

The United States infrastructure is not very strong. By many rankings and reports, infrastructure in the U.S. needs to be improved. According to the Global Competitiveness Rankings from the World Economic Forum, the United States ranks eleventh in the world for infrastructure, and The American Society for Civil Engineers (ASCE) gave the U.S. a “D+” for infrastructure. The United States falls short in all areas of infrastructure; highways, bridges, ports, and the power grid are a few portions of the infrastructure that need to be improved.

To start, U.S. highways are not properly funded or maintained. According to an article from The Economist, the United States loses $100 billion per year due to traffic jams, and the ASCE gave the U.S. a “D” for its roads. A major source of funding is the Highway Trust Fund. The Highway Trust Fund has two main purposes: it supports projects relating to the interstate system and road construction, and it funds mass transit projects. The fund finances about a quarter of all public highway and mass transit spending across the nation. The Highway Trust Fund is paid for mainly with a federal gas tax, however the gas tax is becoming less effective. The federal fuel tax is not indexed for inflation, and it hasn’t been increased since 1993. Also, greater fuel efficiency and an increase in mass transit and car-pooling have decreased revenue brought in by the tax. Currently, the Highway Trust Fund is running a deficit. A bill passed in December 2015 covers this gap until 2020. If a solution is not reached by then, the fund will be unable to pay states. All projects would then come to a halt.   

Bridges and dams are also in need of much repair. Ten percent of U.S. bridges are considered deficient, and the age of the nation’s average bridge is 42 years. ASCE rates American bridges at a “C+”. In 2012, nearly 14,000 dams were considered high-hazard, and the average dam is 52 years old. The ASCE gives the U.S. a “D” for its dams.

The nation’s power grid is also inadequate. Much of the power grid was built about fifty years ago when Internet access wasn’t necessary and electronic devices were a luxury. Now, these things are a necessity for businesses. Roughly $150 billion is lost to power outages each year. The equipment is aging and being used at its maximum capacity. ASCE estimates that about $107 billion is needed by 2020 to maintain the power grid.

Not only is there a lack of funding for infrastructure, but there is also a major problem with the way funding is spent. Money is often used to finance new projects rather than being used to repair existing infrastructure. For example, an article written by Angie Schmitt in February 2015, found that between 2004 and 2008, 43 percent of funding for roads was spent on repairing existing roads while 57 percent of funding went to expanding and creating roads. However, existing roads made up 98.7 percent of the nation’s roads, and just 1.3 percent of the nation’s roads were new. Essentially, just 43 percent of the funding was spent on 98.7 percent of roads, while 57 percent of the funding was spent on just 1.3 percent of roads. Clearly, funding is not smartly allocated.  

Politicians and interest groups have proposed several different plans to strengthen the nation’s infrastructure system, and I’ll discuss these plans in future posts. 

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Infrastructure

Crumbling roads, dilapidated buildings, rickety bridges, and flickering power all sound like part of the setting for a post-apocalyptic novel; however, they are also elements of a failing infrastructure. When considering the most paramount issues facing the nation, or even the state, infrastructure is not usually an issue that most people consider, and it is not an issue that many find compelling or exciting. However, a robust infrastructure is a leading factor in having a healthy economy, and the state of the infrastructure has a large impact on the entire nation. Unfortunately, the United States’ infrastructure is very flawed, and funding for infrastructure is often inadequate or misused. Scholars and politicians have proposed various plans to improve the nation’s framework, and, likely, a combination of these plans, coupled with public support, could result in a much stronger infrastructure. In a series of posts, I plan to address topics such as the importance of having a good infrastructure, problems with the infrastructure at both the state and federal level, and proposed solutions to these problems.

Why is a good infrastructure necessary?

When considering the word “infrastructure,” many people think of roads and transportation. While roads are an integral part of a nation’s framework, many other elements are involved in composing the infrastructure as well. The Merriam-Webster Dictionary defines infrastructure as “the basic equipment and structures that are needed for a country, region, or organization to function properly.” When applying this definition to the United States, or other nations, infrastructure includes buildings, roads, the power grid, bridges, airports, access to clean water, and communication systems. Having a stable and well-functioning infrastructure is vital to a nation’s growth; a good infrastructure leads to a more productive economy and a more able workforce.

Nations with a stronger infrastructure will  have a more robust economy. A good framework makes existing firms more competitive and provides economic incentives to companies or nations looking to invest in a region. A firm is more likely to locate in a region with an efficient transportation system and an effective communications system than a region where roads are crumbling and there isn’t any access to Internet. This can be seen by comparing the economies of China and India.

India has chosen to focus its economy on services rather than manufacturing, and the nation has neglected its infrastructure. For example, the country’s power grid is overworked, its airports are much too small, and it appears to be moving towards a shortage of freshwater. According to an article from the Federal Reserve Board of Atlanta, the country invested only 3.6% of its GDP in infrastructure in 2009, and India’s government has stated that the poor infrastructure has likely slowed economic growth by about 2% per year. On the other hand, China has invested a lot in its infrastructure since the late 20th century. In 2009, the country spent 9% of its GDP on infrastructure. The nation built new coal mines and developed a modern power grid. Currently, China is developing nuclear power plants and investing heavily in their roads and highways. This, along with the country’s inexpensive labor, makes the nation very attractive to foreign investors. As of December 2015, China ranks fourth for foreign direct investment, while India ranks twenty-second. Furthermore, China’s per capita GDP is now more than double that of India.

Not only does a solid infrastructure attract investors, but it also leads to a more able workforce. A good infrastructure includes having access to clean water. Also, an efficient infrastructure ensures that electricity is available to keep food and medicine refrigerated. Having these amenities makes a country’s human capital more productive, leading to a more productive economy.     

Look next week for a post on problems with the U.S. infrastructure! 

Sources (for this post and future posts):

Federal Reserve Bank of Atlanta. (2008). Retrieved February 22, 2016, from https://www.frbatlanta.org/regional-economy/econsouth/vol_10_no_2/econsouth-vol_10_no_2-building_a_better_world.aspx

Fixing the Highway Trust Fund. (2016, January 25). Retrieved February 21, 2016, from http://www.concordcoalition.org/issue-briefs/2016/0125/fixing-highway-trust-fund

Golson, J. (2015, January 23). It’s Time to Fix America’s Infrastructure. Here’s Where to Start. Retrieved February 22, 2016, from http://www.wired.com/2015/01/time-fix-americas-infrastructure-heres-start/

Halsey, A., III. (2012, August 1). Aging power grid on overload as U.S. demands more electricity. Retrieved February 21, 2016, from https://www.washingtonpost.com/local/trafficandcommuting/aging-power-grid-on-overload-as-us-demands-more-electricity/2012/08/01/gJQAB5LDQX_story.html

Johnson, D. (2015, December). How the Clinton and Sanders Infrastructure Plans Measure Up. Retrieved February 22, 2016, from http://www.huffingtonpost.com/dave-johnson/how-the-clinton-and-sande_b_8688628.html

Marco Rubio’s Plan to Build a 21st-Century Transportation System. (2015). Retrieved February 22, 2016, from https://marcorubio.com/issues-2/marco-rubio-transportation-policy-highways-roads/

Schmitt, A. (2015, February 05). More Money Won’t Fix U.S. Infrastructure If We Don’t Change How It’s Spent. Retrieved February 22, 2016 from http://usa.streetsblog.org/2015/02/05/more-money-wont-fix-u-s-infrastructure-if-we-dont-change-how-its-spent/

Yglesias, M. (2015, December 01). Hillary Clinton’s infrastructure plan, explained. Retrieved February 22, 2016, from http://www.vox.com/2015/12/1/9826668/clinton-infrastructure-plan-explained

Most Important Problem. (2016, February) Retrieved February 25 from http://www.artba.org/newsline/2015/10/22/two-new-polls-show-americans-overwhelmingly-support-increased-funding-for-infrastructure/      

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