Economy

The Infrastructure Deficit

Posted by JM Ashby

Infrastructure is one thing which you would expect to be bipartisan. We all drive on the same roads, drink the same water, and breathe the same air. And it's no secret that our national infrastructure is struggling to keep pace with our growing population and increasing urbanization. What may be a secret though, is that its not keeping pace at all. In fact, we have an infrastructure deficit.

A new report from the New America Foundation suggests that our infrastructure deficit may be costing the economy as much as $200 billion per year due to a loss of efficiency and reliability. The most staggering of these numbers are found on the road, but the other statistics are no less impressive.

Americans wasted 4.8 billion hours in traffic in 2009. These delays resulted in the waste of 3.9 billion gallons of fuel. Fuel loss alone cost truckers $33 billion, a significant addition to shipping costs for producers. The delays are most acute in the largest metropolitan areas, including Washington, D.C., Chicago, and Los Angeles, where travelers spend an average of 70, 75, and 63 hours per year in traffic at an average cost per passenger of over $1,500. [...]

Delays on the ground are matched by delays in the air. In 2009, 21% of flights were delayed, down slightly from the 2007 rate of 24%, the highest rate of flight delays in Federal Aviation Administration (FAA) history. According to the Joint Economic Committee, these flight delays cost a cumulative $40.7 billion and wasted 740 million gallons of fuel. A slightly more conservative study sponsored by the FAA found that flight delays negatively impact the economy by $32.9 billion per year, at a cost to travelers of $16.7 billion in 2007 alone. Although air traffic and flight delays have moderated since 2007, without capacity expansion flight delays will likely rise again as air traffic grows. [...]

Poor infrastructure is costing Americans not only when they travel, but also when they stay at home. America’s water pipes are old, ranging in age from 50 to 100 years. In 1980, the Environmental Protection Agency notes that 10% of water pipes were already in “poor, very poor, or life elapsed” condition. The Agency expects this number to increase to 45% of all piping by 2020. Further, as pipes age they begin to deteriorate at an exponential rate. If left unaddressed, the funding gap for clean water and drinking water is projected to increase to $122 billion and $102 billion, respectively.

Is it really going to be 2013, 2016, or perhaps even 2018 before we have a congress that will take the situation seriously and approve drastic increases to infrastructure spending? China is spending 10% of GDP per year on infrastructure. The EU is spending 5%. The United States is spending 2% of GDP per year on infrastructure. We need to begin tackling the problem right now, but we have a congress which is too busy playing games and angling to defeat the president in 2012. Our lack of spending on infrastructure is literally unsustainable. Spending on infrastructure would be a great way to create jobs. Doesn't that qualify as a no-brainer?