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Posted by on Jul 27, 2015 in Economy, Featured, Politics, Science & Technology | 3 comments

With Infrastructure, Government Failure Buoys The Private Sector

The United States is home to many contradictions, but none are as perplexing as what our great country can and cannot afford. We are told, for example, that our economy cannot afford a living wage, even as Congress continues to favor the rich with tax breaks and loopholes.

But wages are far from the only casualty of our government’s spectacularly poor stewardship of public funds. In fact, most of us witness some of the most egregious problems every time we commute to work.

The short version? America’s infrastructure is falling apart all around us. Much of the problem might be invisible to the casual observer, but it’s become clear thanks to several independent and non-partisan groups that America has a serious problem. These days, even basic maintenance seems beyond our grasp.

Making the Grade

The good news is, you don’t have to take my word for it—or the government’s. The American Society of Civil Engineers publishes an annual Report Card for America’s infrastructure, and the results have been embarrassingly bad for years: in 2013, America received a grade of D+, indicating that we need to come up with a $3.6 trillion investment by 2020.

But if you’re looking for a second opinion, we can turn to ARC Document Solutions, which publishes an annual Construction Trends Survey. They collect and interprets data from over 1,000 U.S.-based construction professionals and firms.

To begin with, respondents were asked about the importance of different kinds of construction projects in the country, and the overwhelming majority ranked projects that benefit the “public good” as among the most important. 83% of survey respondents specifically named “rebuilding aging infrastructure” as the single most important construction priority. The next-most favored priority, coming in at 51%, was “building clean power plants.”

Receiving zero votes was “reclaiming the world’s tallest building status”—which, when combined with the other heartening results from the survey, indicate that the kind of American exceptionalism that’s defined America’s fiscal policy for so long seems to be bowing in favor of more immediate and more tangibly beneficial projects.

Familiar Problems Need Radical Solutions

Considering the almost overwhelming importance placed on public works by the private sector, one senses a kind of contradiction at work here. Is it not the domain of the government to look out for the good of the public? Are shared structures such as bridges, airports, and roads not a worthy use of tax dollars?

The answer, unfortunately, appears to be no—and it has been for quite some time now. The unfortunate reality is that American politicians seem to have too thoroughly distracted themselves with infighting to really dig into the problem at hand.

For example, Congress has recently been accused of “paralysis” when it comes to funding transportation projects, and for good reason: for the past six years, Congress has played a high-stakes game of whack-a-mole when it comes to funding. To be exact, our government has passed more than 30 short-term extensions for infrastructure investments. There have been fruitless talks of a longer-term fix for some time now, but the usual partisan bickering has resulted in brief and bitter arguments followed by patchwork legislation that funds our transportation projects for just one year at a time.

Unfortunately, the loudest voices are frequently the most intractable, as when Senate Majority Leader Mitch McConnell (R-KY) repeats, ad nauseum, “We’re not going to raise the gas tax [in order to fund infrastructure improvement].” That would be well and good if he had a counter-proposal, but he, like many American politicians, seems willing to bet on the safety of American commuters in the name of holding the party line.

One of the few common sense proposals we’ve heard recently come from Vermont Senator Bernie Sanders—the one man who seems destined to overturn Hillary Clinton’s applecart. He’s been proposing a $1 trillion infrastructure investment for quite some time now, which might sound like financial foolishness until you remember that other piece of true foolishness: tax breaks and corporate welfare for America’s wealthiest citizens. In 2014, Citizens for Tax Justice estimated that just 30 American companies had managed to park $1.2 trillion overseas in order to avoid taxes on their earnings.

In other words, the problems that dog us now aren’t even political in nature: they are matters of financial common sense.

The Political Ouroboros

Our government is eating its own tail. We continue to elect politicians who tell us that our public servants are impotent or out-of-touch, and so, when they live up to their own low standards, we cannot hold them accountable.

The only good news to come of this downward spiral is that it’s created significant opportunities for the private sector. There was a time in American history when the federal government was recognized as a world-class job creator, thanks to longer-term public works projects that kept Americans working and made sure our vitally important infrastructure could be relied on to get us where we need to go.

But these days, the private sector seems to be running circles around the government when it comes to finding efficient solutions to infrastructure problems. Part of the issue comes from the fact that many in Washington would prefer to leave the states to their own devices when it comes to shoring up public infrastructure. There are practical arguments for and against this approach, but even the private sector has acknowledged that cooperation between governments—including cooperative purchasing—could be the first decisive step we take toward a reasonable, sustainable solution.

In other words, dividing our efforts even further is the last thing we want; the government needs to provide a firm hand that we’ve sorely lacked for far too long now.

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  • rudi

    Eisenhower would be a liberal by today’s standards. Ikes Interstate initiative would never fly by the Koch brothers lackeys in the Congress. Germany spent a ton of money making East Germany up to date after the unification. The US is heading into a Banana Republic with our failing infrastructure…

    Although the precise level of German official expenditures in eastern Germany has been difficult to estimate because funds appropriated in one year might have been spent in another, it is beyond dispute that the federal government expended well over DM350 billion in eastern Germany during the first three years after economic, or monetary, unification. After 1992 this requirement has continued at an annual level of around DM150 billion, so that the sum of private and public funds put into eastern Germany during the half-decade between monetary unification in 1990 and the end of 1995 would probably amount to at least DM750 billion and perhaps as much as DM850 billion. Between one-fifth and one-fourth of those funds were private, and the remainder were government funds. This constituted an infusion of outside money of about DM50,000 for every resident of eastern Germany, a far greater level of assistance than contemplated for any other area that had been behind the Iron Curtain and a token of German determination to bring eastern Germany to western levels as quickly as possible.[4]

    850 million ($510 million) in 1991

    • Slamfu

      Eisenhower would be a flaming liberal by today’s standards. As would Jesus and Ronald Reagan.

  • Slamfu

    It just amazes me that infrastructure spending is even a question. And frankly it is one of the many reasons the GOP disgusts me in their penny wise pound foolish economic policies. It’s one of the best ROI’s you can get, and yet they quibble about spending $1 today to make $3 tomorrow. The ironic thing is they can’t get enough of military spending, which is a terrible return on investment. You need enough to keep your place in the world safe, and that’s it. Which for us would likely be in the $400 billion range, well above any other nation’s defense spending, any 4 nations really. There comes a point where diverting money away from infrastructure and into defense actually weakens your nation, and we are well past that point. But some people are going to never realize that until they are on a bridge that collapses.

    We need roads, and water, and electricity, and internet access. These things make money. Why oh why don’t they see that?

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