Doing nothing is expensive

Feb. 5, 2013
We spend a lot on the public infrastructure, but far from enough

It’s commonly accepted that our highways, bridges and other public infrastructure components are deteriorating. In 2009 the American Society of Civil Engineers (ASCE) handed out a failing grade of D when it released its “Report Card on America’s Infrastructure.” And when its next report card is issued later this year, I wouldn’t be surprised to see that failing grade fall to an even more dismal F.

Using an evaluation system we’re all familiar with from distant school days is a clever idea. The general public and media get the point easily. But once you get past the “Oh my” factor, what does that grade really mean? More importantly, what does it suggest needs be done?

ASCE has attempted to answer those questions with a follow-up report—“Failure to Act: The Impact of Current Infrastructure Investment on America’s Economy.” Released in late January, it makes a convincing argument that continuing to ignore the problem in the name of fiscal constraint will carry a very large price tag by the end of this decade.

The gap between what we now set aside for infrastructure spending and what we need to spend is huge—ASCE estimates it will total $1.1 trillion (yes, trillion) by 2020. While some of that money is needed to upgrade airports, seaports and the utilities systems, the vast majority is required to fix our overworked and under-maintained surface transportation system, that is, our highways, bridges, secondary roads and rail networks. ASCE estimates we will need to spend $1.7 trillion by 2020 to pay for urgently needed repairs and enough expansion to offset growing traffic congestion. Expected funding over the next eight years is $877 billion, leaving a funding gap of $846 billion by their calculations.

That’s a big bill, especially given record federal deficits and the blood battles waged in Congress over any attempt to add a dollar to those deficits. But ASCE believes the cost of not making that investment is much larger. How large? Try 3.5 million jobs, $3.1 trillion in GDP, almost $1 trillion in business sales, and $1.1 trillion in total trade by 2020. Extending it to the personal level, ASCE says those numbers translate into an annual loss of $2,000 in disposable income for every family in the country.

How did they come to these estimates? Not by looking at the immediate impact on construction spending, but rather by focusing “on the incremental and gradual decline of infrastructure systems under current investment scenarios.” In ASCE’s view, the gradual deterioration of the surface transportation system has masked the true economic cost and impact on lost productivity and constrained business activity. And while they acknowledge that current transportation investment has been enough to “avoid the imminent failure of key facilities,” it falls far short on the amount needed to reverse that deterioration. In other words, we’re like the frog that sits quietly in a pot of gradually heating water until it’s boiled.

These are truly mind-boggling numbers. As the new Congress once again tries to come up with a long-term transportation bill, let’s hope they can look beyond partisanship to see just what it will cost the country to continue deferring the necessary investment in our national infrastructure. We can’t afford it.

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