time. A project that costs $5 or 6 million to repair now may A robust program of infrastructure investment is also
cost upwards of $30 million to repair merely two years from
critical to restoring American competitiveness. According
now.16 Since most of these projects will need to be
to a recent report by the World Economic Forum, we have
undertaken at some point, the question is literally not
fallen to
16th
place worldwide in the quality of
infrastructure.
15
A variety of infrastructure bottlenecks—
whether but when. Not to undertake them now would be to leave money on the table. Combine this consideration with
traffic choked roads, clogged-up ports, an antiquated air
the fact that labor and capital may never be noticeably
transportation system, and an unreliable electrical grid—
cheaper than they are now and with the need to generate
are costing our economy billions in lost income and
job creation and economic growth, then it becomes
growth. The Department of Transportation, for example,
immediately apparent not to undertake massive public
reports that freight bottlenecks cost the American economy
infrastructure investment now would be nothing short of
$200 billion a year—the equivalent of more than 1 percent
financially irrational.
of GDP. And the Federal Aviation Administration estimates that air traffic delays cost the economy $32.9
In light of the overwhelming need, on the one hand, and
billion a year. Perhaps even more worrying, there is
unparalleled opportunity, on the other, to restore both
growing evidence that uncertainties about the future
short-term and longer-term economic health through
reliability of our energy, water and transportation systems
productive real public infrastructure investment, we
are creating obstacles to investment in some parts of the
propose the following program:
country and thus impeding new business investment. •
A five-year public investment program in
Our economic peers and competitors are not unmindful of
transportation, energy, communications, and water
how quality public infrastructure facilitates private
infrastructure; science and technology research;
economic activity. China, for example, invests 9 percent of
and human capital enhancement, which can be
GDP per annum in public infrastructure, while we spend
extended as needed.
well less than 3 percent. As an earlier New America Foundation report noted, “In today’s globalized economy,
•
Target: $1.2 trillion of additional public/private
public infrastructure is more critical than ever to the
investment, resulting in the creation of an
competitiveness of the traded sectors of the economy.
additional over 5.52 million jobs in each year of the
Public infrastructure investment makes private investment
program – directly, through the projects
more efficient and more competitive globally by eliminating
themselves, and indirectly, through the multiplier
many of the bottlenecks mentioned above and by lowering
effect on other sectors of the economy.
the cost of transportation, electricity, and other core business expenses. Infrastructure investment is also
•
An emphasis on high-return strategic investments
essential to the development of new growth industries. In
in energy, transportation, and communications to
fact, many of the new growth sectors of the economy in
eliminate economic bottlenecks and restore
energy and clean technology require major infrastructure
productivity, complemented by labor-intensive
improvements or new public infrastructure.”
investments in energy efficiency (retrofitting homes, offices, and pubic buildings) to maximize
If the infrastructure deficit is ignored, it is only likely to get
job creation.
worse. Deteriorating infrastructure is subject to “costacceleration” where repair or replacement costs grow with
new america foundation
page 17