America’s Crumbling Infrastructure Will Drag the Economy Down With It
America’s economy, particularly over the past few years, has dodged a lot of bullets. The housing crisis, dwindling employment numbers, and rising income inequality are just a few examples of issues that have made America’s leadership pivot in multiple directions in an effort to keep the economic health of the country at a reasonable level.
The next bullet in the chamber is America’s infrastructure and an overall lack of willingness to do anything about it by political leadership. Experts and analysts have warned us about the impending infrastructure crisis for years, but it always seems to be one of those topics that gets pushed to the back burner as fresh problems are thrust into the limelight, like ISIL or the Ebola scare. But every once in a while, a rather large-scale incident puts the issue right back into the forefront of our minds, such as the collapse of a bridge section of Interstate 5 in Washington state, or the bridge collapse in Minnesota.
In both of these cases, these bridges were found to have been in a state of disrepair, but there was simply a funding shortfall when it came to getting them back up to proper operating condition. Of course, that doesn’t mean that people were going to stop using them, or that transportation officials were going to shutter vital traffic arteries. So what can be done?
A great deal of the country’s infrastructure, including highway and interstate systems, bridges, dams, sewers, and even airports and seaports, are all in need of some TLC, and the issue is going to be tackled sooner rather than later. If it’s not dealt with in the short term, the economic effects down the road could become a huge problem. The question is, what is it going to take to get America’s framework back to where it needs to be? According to the American Society of Civil Engineers, it’ll take an investment of $3.6 trillion by 2020.
That’s a staggering figure, especially considering that it’s more than a quarter of America’s current GDP. Of course, many people thought that we had already pushed through a large spending bill with a focus on rebuilding infrastructure a few years back. Those people are referring to the American Recovery and Reinvestment Act, which passed in early 2009 as a method of coping with the then-brand new financial crisis and recession. The roughly $100 billion allocated toward infrastructure in that bill is a drop in the bucket compared to what the American Society of Civil Engineers says is needed.
Compared to almost almost every other nation on Earth, Americans have it pretty good. Our infrastructure is intact and functioning, so getting an “A” grade from the Society of Civil Engineers shouldn’t necessarily be the goal. But ensuring that bridges don’t collapse and that funding is secured to properly maintain what we do have — or to build what we will need in coming years — should be. Even if policymakers were to set their goals at supplying $3.6 trillion in funding, where would it come from? The War on Terror over the past decade has cost Americans around $6 trillion, not quite double the amount needed to tackle the infrastructure issues.
What if that money had been reinvested in the country instead of spent on wars that haven’t really provided Americans with, well, anything? The real issue is that most Americans feel entitled to infrastructure. We don’t think twice about hopping in the car, using public roads to get to where we need to go, crossing over bridges and tunnels along the way. We also don’t think about the energy and water infrastructure we use every day, which also needs to be maintained and upgraded. This is the major obstacle standing in the way of passing a higher gas tax or reexamining the existing Highway Trust Fund: People tend to become uneasy at the prospect of even a slight increase in taxes.
Is there a solution in the cards? Could the issue be solved by a collaboration of public and private interests? America’s businesses have largely built their success on the backs of public resources, and that includes the nation’s roads, tunnels, and bridges. In many cases, business puts more strain on these resources than anyone else, so is it conceivable that they should be throwing in a bigger share toward a national investment? Obviously, businesses already do pay through taxes, but could they be incentivized to chip in more? It’s a rough idea, but something worth exploring. After all, businesses would suffer tremendously if large parts of American infrastructure were to fail, and that would lead to a cascading effect all throughout the economy.
The real question is this: When are business and political leaders going to step up and develop some real-world solutions to the infrastructure problem? It seems that the situation presents a great opportunity for market-based solutions, and for entrepreneurs with bright, if not far-fetched, ideas, to enter the fold. Elon Musk’s Hyperloop idea is a perfect example of such an idea. Although it’s a bit out there, it showcases some of the innovative thinking that America needs.
But until some big ideas with real feasibility are brandished, the need for investment remains. Again, if the effort is not put in now or in the near future, Americans will pay big down the road. Just imagine what would happen if a major dam burst or if two or three major bridges connecting interstates were to go out of commission simultaneously. The effects could be disastrous, not just in terms of the immediate aftermath, but also in the resulting economic slowdown and public scare.
Getting America where it needs to be in terms of infrastructure will require leadership to step up and make some tough decisions, as well as some real solutions in how we tax and spend. But it needs to get done, no matter how much kicking and screaming happens in the interim.