According to the American Society of Civil Engineers (ASCE), our crumbling and decaying infrastructure is going to cost us $3 trillion in lost GDP by the end of this decade.
Remember the I-35 bridge collapse in Minneapolis in 2007 that killed 13 people and forced us into an all-out bridge rebuilding effort that replaced the fallen bridge in only 12 months? Another bridge fell in the state of Washington recently…no deaths, but no more bridge crossings, either.
Delays. Detours. Power outages. Broken water and sewer lines. Airports that are no longer functioning efficiently. All this makes our businesses less competitive globally. (The US is ranked 25th by the World Economic Forum in quality of infrastructure, well behind most of our major economic competitors.)
With government borrowing rates low, courtesy of the Fed, and so many construction workers eager for jobs, you might think the federal government would launch programs now to rebuild our infrastructure. Unfortunately, the Fed’s cheap money has been squandered mostly on sugar-high stimulus and paper profits in the stock and bond markets. These are at best only ephemeral benefits that always fade fast. In contrast, infrastructure programs would have lasting and much-needed benefits for this and future generations. Yet Washington continues to provide little or no leadership on the issue, missing the boat as government borrowing costs continue to rise.
Many in the GOP seem to think the government spends too much already and is too incompetent to run major infrastructure programs. But lots of sensible people, including the New America Foundation, a leading centrist think tank, have proposed the creation of a National Infrastructure Bank. This would support only projects that were approved by a team of engineers, and would pay for those projects over time with user fees or dedicated revenues like energy taxes. The current proposal would provide nearly half a trillion dollars in infrastructure financing without adding to our long-term deficit. (Some people are suggesting, however, that this idea may not be getting the attention it deserves because it will prevent elected members of Congress from steering “pork” projects to their home districts!)
And where are the Democrats? Not only would fixing our infrastructure make American businesses more competitive, but it would also lower unemployment. Studies show that every $1 billion in infrastructure spending can create more than 20,000 new jobs. Health and safety are also at stake. Sure, fewer bridges would fall down, but ASCE estimates that right now one in nine bridges in the US are structurally deficient. That’s a lot of bridges that need fixing. US water mains are bursting about 250,000 times a year. Poor air quality in our aging school buildings has a negative effect on health of both students and teachers.
What infrastructure is Congress focused on? It’s willing to spend about $30 billion to build and guard hundreds of miles of fence along our Mexican border. As China builds more and more modern infrastructure, the US wants to build its own Great Wall along the border, keeping out virtually no one but Mexican farm workers.
As Congress continues to struggle with issues like immigration reform, it should make sure not to ignore vital infrastructure spending. If we keep allowing our roads, bridges, and airports to deteriorate, we will surely find in the years and decades ahead that no one will want to come here anyway.
[by Sheila Bair, former chair of the FDIC, writing for FORTUNE magazine]
As always, posted for your edification and enlightenment by
NORM ‘n’ AL, Minneapolis