Another American Money Pit: Infrastructure

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Pop Quiz…
What country needs to spend:
  • $1.6 trillion in the next five years just to maintain its infrastructure’s adequacy?
  • $78 billion to $137 billion per year for the next 20 years to eleminate its backlog of bridges and highways?
  • $15 billion per year to maintain its transit systems (improving them would cost another $9 billion per year)?
  • This country’s civil engineers gave its infrastructure a “D,” down from a D+ in 2003?
If you guessed the USA, you’re right.

Over the last 40 years, US federal investment in infrastructure has fallen steadily from 0.45% of GDP to a mere 0.05% of GDP. A full review of the problems facing the US would require a small book. So I’ll simply focus on some of the more glaring items.

For starters, 27% of the nation's 590,000 bridges are either structurally deficient or functionally obsolete. This issue alone would cost nearly $10 billion a year for 20 years to amend.

There are 9,471 sewer overflow problems in some 772 communities spread across 33 states. This results in some 850 billion gallons of raw or partially treated sewage water flowing into rivers, lakes and wetlands every year. This issue requires $50 billion to fix.

The average US public school building is 40 years old. More than three quarters of these have deferred maintenance. The Government Accounting Office estimates more than $100 billion in investment is needed to bring the nation’s schools up to standard.

As advanced as the US proclaims to be in terms of technology, we’re actually dramatically behind other developed nations. Denmark’s broadband market penetration stands at 34 connections per 100 inhabitants. The US is only at 22 per 100 inhabitants. Similarly, 35% of Japan’s internet connections are fiber optic. In the US it’s only 3%.

According to the National Surface Transportation Policy and Revenue Study Commission, the US needs to invest roughly $225 billion per year for the next 50 years in order to add capacity and maintain infrastructure. Currently it spends about $85 billion a year. Put another way, public investment needs to almost triple if the US doesn’t want more incidents like the 2007 bridge collapse in Minneapolis.

Simply put, we are on the cusp of a massive multi-trillion dollar boondoggle in infrastructure spending. And with the election coming you better believe this issue is going to be receiving a lot more attention.

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