U.S. economy imperiled by crumbling infrastructure

U.S. economy imperiled by crumbling infrastructure

Published 31 March 2015

The U.S. economy remains strong, but the nation’s dated, crumbling public infrastructure may threaten its future dominance, according to experts. The World Economic Forum (WEF) placed the United States 25^th in infrastructure investment and 30^th in air transportation, a field previously dominated by the United States. Since the 1960s, public spending on infrastructure, as a share of GDP, has dropped to around half the European average and, the American Society of Civil Engineers (ASCE) reckons, $3.6trn will have to be spent if the U.S. is to catch up.

The U.S. economy remains strong, but the nation’s dated, crumbling public infrastructure may threaten its future dominance, according to experts.
TheIndependent notes that the World Economic Forum (WEF) placed the United States 25^th in infrastructure investment and 30^th in air transportation, a field previously dominated by the United States.
“Not so long ago the opposite was true,” Rupert Cornwell writes. “The U.S. was the shining future that had already arrived. It had the best technology, the most modern cities, the fanciest cars, the most up-to-date airports. The jewel in the crown was the interstate highway system, built in the 1950s and 1960s to knit a continent together. Alas, sooner or later, youthful beauty fades. And so it is with America’s infrastructure. Many of those projects date back to the immediate post-war years, even to FDR’s New Deal to counter the Great Depression. More than half a century later, they’re in desperate need of overhaul or replacement.”
A new airport has not been constructed since Denver International in 1995.
Additionally, a third of America’s roads require major repair, while 70,000 bridges have been deemed “structurally deficient.” Recently, there have been bridge collapses in Minneapolis, Minnesota along interstate I-35 in 2007, which killed thirteen people, and a failure at a bridge on I-5 in the state of Washington in 2013.
Ports on both the Atlantic and Pacific coasts are having trouble as well. Many are scrambling to accommodate the New Paramax container ships which will begin hauling freight through the Panama Canal, and Los Angeles and Long Beach, which manage 40 percent of U.S. imports, are already deemed congested.
“It adds up to a pretty grim picture,” says Cornwell., “Since the 1960s, public spending on infrastructure, as a share of GDP, has dropped to around half the European average and, the American Society of Civil Engineers (ASCE) reckons, $3.6trn will have to be spent if the U.S. is to catch up. It’s a huge ask, for the federal government, the states and private investors who will have to put up the money. But if not, the ASCE warns, the price in terms of potential exports, jobs and personal income lost could be no less high.”
The solution, he suggests, is first to focus on the partial ones. Above all, the Highway Trust Fund, the agency set up in 1956 to finance and maintain interstates, requires more funding. It has already been announced the Fund will run out of money by the end of May 2015. The 18-cents-a-gallon tax that goes into the fund has not been raised since 1993.
“So why not raise the tax?,” he suggests. “The moment is perfect: the pump price of petrol has dropped by 40 per cent in three years, while today’s fuel-efficient vehicles use less of the stuff. What better moment to slip through a tax increase that few would notice, to pay for the better roads America needs? Alas, tax increases of any kind are anathema to the Republicans who run Congress.”
Cornwell concludes, however, that the taxpayers themselves may be the change that they deserve. When polled about public works initiatives on ballots, nearly three-quarters of voters are in favor of using more taxes to cover infrastructure costs, meaning more politicians may campaign on the matter soon.