Posted on 08/20/2016 7:06:48 AM PDT by expat_panama
On the campaign trail, Hillary Clinton and Donald Trump have been claiming that the United States needs more and better infrastructure. Like many other politicians before them, they say that infrastructure creates economic growth and jobs; they argue that we have too little of it; and they believe it must be provided by government. The truth is, though, that U.S. infrastructure ranks near the top in the world.
No matter: the political script is that we need more government spending on infrastructure, and we need it now. Democrats call for a publicly funded infrastructure bank to address America’s “crumbling” infrastructure. A crisis is ginned up to demonstrate that current levels of infrastructure spending are woefully inadequate. Public spending lobbyists oblige with D+ report cards for aging and unreliable roads, bridges, and ports. The 15,000 transportation lobbyists in DC routinely contribute huge amounts to politicians on both sides of the aisle. Opponents of infrastructure spending are decried as wanting to poison grandma with polluted water and send school buses over the guard rails of decaying roads. Good people want good roads, safe bridges, and clean drinking water, but not these tight-fisted deficit hawks.
Hillary Clinton’s campaign calls for a substantial increase in infrastructure spending as a down payment on what she terms the national emergency of our failing infrastructure. As candidate Clinton warns: “We have bridges that are right now too dangerous to drive on, although people take a deep breath and drive across them. We have roads that are so riddled and pitted and potholed that people driving them are having to pay hundreds of dollars to repair the damage. We have airports that are stuck in the mid-20th century instead of the 21st century. We have water systems that are unsafe for children to drink the water from.”
Clinton promises to send a $275 billion infrastructure spending bill to Congress in her first one hundred days of office. In her campaign stops, she invites voters to dream of the hundreds of thousands of jobs that her infrastructure spending will create. Her promised infrastructure boondoggle has drawn Donald Trump into the bidding game with an unseemly pledge to double Clinton’s program. Trump should stick to attacking regulation and tax reform rather than aping her public spending giveaways.
Before embarking on an infrastructure spending spree we should answer three questions. First, what is the actual state of our infrastructure? How do our roads, utilities, telecommunications, and airports compare to other affluent countries? Second, have we created an infrastructure deficit by underspending? Are we indeed spending too little? Third, if so, how much spending is needed to bring infrastructure up to “international standards.”
First: How does U.S. infrastructure rank?
Advocates of infrastructure spending point to the glistening glass and steel of United Arab Republics’ futuristic airports, of French and Japan’s bullet-trains reaching 200 miles per hour, and of Germany’s dense autobahn network. Surely, they argue, the United States must be an infrastructure laggard when compared to these masterpieces of twenty-first century technology and innovation. But are these images representative? The United States is a country of almost four million square miles. Of course, it will have some shaky bridges, potholed roads, and suspect water systems. It has 600,000 bridges. But over the past 65 years, only 45 bridges have collapsed for an infinitesimal annual failure rate.
The latest tally of the widely-cited World Economic Forum’s (WEF) ranks U.S. infrastructure in eleventh place, behind countries like Singapore, Hong Kong, Germany, France, and even Spain. But, at eleventh place, the U.S. ranks ahead of Canada, Austria, Australia, and Scandinavia—no slouches in infrastructure. The WEF’s U.S. ranking is artificially depressed, first, by America’s low cell phone subscriptions per capita. (The United States and Albania have about the same number due to the lack of fixed line service in poor countries). Second, the WEF ranking is determined by “experts” from each country, who provide subjective scores (ranging from 1 to 7) for each component of the index. Will the 369 country specialists from the United States evaluate U.S. infrastructure by the same standards as the 100 experts from Egypt or the 39 from Haiti?
In its New Global Index of Infrastructure, the prominent Kiel Institute for the World Economy has constructed an alternate infrastructure index, based on facts rather than expert opinions. The Kiel results are strongly correlated with the WEF’s, but the two differ on the U.S. ranking. WEF ranks the U.S. at eleventh place, while Kiel ranks it at fourth behind Hong Kong, Singapore, and Germany. The first two are city states, which face lesser infrastructure challenges. Among nation states, therefore, the United States comes in at number two just behind Germany.
If the Clinton campaign’s assertion that U.S. infrastructure is “crumbling” and the Kiel Institute’s numbers are correct, citizens of Switzerland, Canada, Luxembourg, Japan, UK, France, Korea and Sweden should worry out loud about their more decrepit and dangerous infrastructure collapse. Strange that such voices are silent.
The second question is: Does the U.S. spend too little on infrastructure?
The U.S. infrastructure crisis claimed by Clinton must be the result of too little cumulated spending relative to other countries. But that’s not the case. According to OECD statistics, the United States spent 3.2 percent of its GDP (2001-2011) on public investment versus the European Union’s 3.0 percent. With roughly equal GDPs, the United States actually outspent the European Union—the model of infrastructure that our politicians frequently praise. What’s more, the newly-published McKinsey Global Institute’s Bridging Global Infrastructure Gaps confirms that U.S. government investment (as a percent of GDP) has outpaced Japan, the UK, and Europe since 2000, and that the United States and Canada combined have spent equal shares of GDP on infrastructure as Western Europe from 1992 to 2013.
The question, though, is how that money is spent. In both the United States and Europe, public investment and procurement are political processes characterized by waste and corruption. If we get less bang per buck from our infrastructure dollar than other nations, our problem is not too few dollars but too few dollars efficiently spent. We need fewer bridges to nowhere and less money spent on propping up failing green businesses and public employee pensions.
Finally, how much should we spend on infrastructure?
The McKinsey report estimates that the world needs to increase its 2015-2030 infrastructure spending from its current $2.5 trillion to $3.3 trillion per year to achieve a GDP growth rate of 3.5 percent. In other words, the world economies need to raise infrastructure spending by $0.8 trillion per year for the next 15 years for a total of $12 trillion, or 15 percent of world GDP.
McKinsey, however, recommends that virtually all of the increased infrastructure spending go to those poor countries with alarming infrastructure deficits. In fact, McKinsey offers a list of countries whose current spending levels are sufficient to produce robust growth rates, among them the United States. The United States has a thirty percent surplus between current rates of infrastructure spending and infrastructure spending needs between now and 2030. In other words, we do not need an infrastructure bank and a stimulus disguised as infrastructure. We are already spending enough.
The American Society of Civil Engineers does not agree with McKinsey. Our civil engineers have decided that the United States must spend $3.4 trillion between now and 2030 to correct our infrastructure deficit. If our civil engineers had their way, the U.S. would gobble up 30 percent of the world’s extra infrastructure spending that McKinsey says should go to the developing world. Asking the civil engineers how much infrastructure spending we need is akin to asking defense contractors how much we should spend to keep America safe.
If Hillary Clinton were indeed a citizen of the world, she would direct our infrastructure spending surplus to less fortunate countries not to her campaign contributors. Our builders, construction workers, and infrastructure lobbyists may not understand, but it would be the right thing to do.
The Clinton Bank will be the next step in getting rid of the now useless Congress who refuse to stop the evil of the left as many are making lots of money supporting the left wing tyranny in DC.
This is whistling through the graveyard. We do indeed have lots of roads and bridges but the roads are like rubble piles instead of pavement.
Our airports look like slums in many places. They have not even been remodeled in decades in many places. There are a few new ones.
No, our infrastructure is in a shambles because we spend most of our money on benefits that discourage work. If we spent less more people might actually look for and produce on a job.
A little fear of starvation is good for the soul and motivation.
Discussing infrastructure nationally obscures the issue. Our infrastructure issues are sporadic, but are much worse in some states than others. I have lived in eight different states. Texas and Kentucky had the best roads by far, well built and generally well maintained.
My current state of South Caroline is by far the worst. They underfunded roads for years and now have a back log of repairs and required upgrades screaming for attention. I have replaced one windshield, have to replace another, and the replacement windshield just took another rock two weeks ago. My route to work (rural two and four lane US highways) is littered with patched potholes and decaying pavement.
The interstates are marginally better, but the interchange between I-26 and I-20 was dubbed “malfunction junction” as it simply cannot handle the daily traffic load. The legislature finally passed a road bill, but we shall see if they can finally address all the accumulated problems, let alone expand and improve the system.
The items cited as made in the 21st century are bogus - they were made in the last century with the exception on one or two UAE airports.
Left out of the article .....
Prevailing Wage labor costs table.... More commonly known as Union labor cost.
http://www.dir.ca.gov/oprl/pwd/Southern.html
ALL Tax dollars Must be spent at Prevaling wage for the area of the country you live in ... This chart is Southern Calif.
For fun click on Laborer (flag an w college degree s/) to start .... Base Hourly rate $50.48
Operating Engineer .. Group 1 ( see further down group 1 includes Forklift Operator) base hourly rate $64.94
Traditionally Union n workers vote about 40% conservative.
And in their defense they don’t get the full sum of money in their check ...much is skimmed off by the union then of course the government has a field day ...
Bottom line the costs of projects get inflated and you could hire 4 guys at $16 per hour to run a forklift and have many qualified applicants trying to get that job
Can’t be.
We spent $800 billion on infrastructure in 2009.
Everything was fixed.
No, our infrastructure is not number one. The Airports in DC, NYC, LA, and Florida are national embarrassments. Visit almost any city in Germany, Japan, etc and you’ll see infrastructure.
I’ve had the experience several times of foreigners visiting amazed in some ways at how cool America is, and then stunned at the lack of transportation, the crappy internet, and other things they take for granted.
“McKinsey, however, recommends that virtually all of the increased infrastructure spending go to those poor countries with alarming infrastructure deficits”
He just mentions the McKinsey report like we should all know who that is. But last I checked, infrastructure spending isn’t coming from some world fund to be allocated as needed worldwide.
American spending has ZERO to do with world spending.
If the author ever dared set forth past the DC beltline the state of roads, bridges, electrical power grid, water/wastewater, and transportation infrastructure in rural America is such that he would be ashamed to put his name on such tripe.
“Discussing infrastructure nationally obscures the issue. Our infrastructure issues are sporadic, but are much worse in some states than others. “
Very true, sometimes crossing a state line is eye opening. The road immediately looks crappy or twice as good.
and that’s part of the problem, because of state-to-state differences in priority allocations, liberals take this as a sign that federal intervention is needed. In fact what is needed is dismantling of the federal bureaucracy, de-regulation, and returning more authority and money to the states who know their local needs best. In the absence of such meddling, if one state has a superior infrastructure that encourages growth and development, other states will notice and act to close the gap. But when the feds are involved, limited resources are peanut-buttered across all areas without regard to local needs. If you’ve ever had any involvement with a project and been told “we can’t do anything about it, that’s determined by federal standards” you will know what I mean.
Just because we’re number 1 doesn’t mean we don’t need work. That’s the thing with grading on a curve, somebody HAS to be #1 no matter how many bridges are falling apart.
In terms of a continental scale infrastructure the US is far ahead. Singapore and Hong Kong are miniatures with, respectively, the best airport in the world and one of the newest with an incredibly efficient and inexpensive (as opposed to the $60-100 car ride in many major airports) rail link into the city. And Germany is just one country on a continent that includes Greece and Romania (no offense intended to either, but we’ve got good roads everywhere). But on a city by city scale (I submit Buffalo and Detroit as my exhibits) or country by country and I’m kind of surprised we beat out Switzerland, Canada, and Japan.
Washington is in terrible shape, too. Bad roads, unsafe bridges, insufficient transportation or highways for the population, lead in the old pipes, aging IT infrastructure, a single overcrowded, terrible airport that can’t support the population of the western half of the state...
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I never trust these types of rankings (for almost anything), but none of the sources list the US as #1. Why just make it up?
Most of the places with state-of-the-art airports don't have to deal with this kind of bureaucratic nonsense.
Here's something that the U.S. does exceptionally well, to the point where we are the envy of the world: railroads -- freight railroads in particular. You can travel from one end of the globe to another and you will never see a mile-long coal train of 280k-lb. rail cars running over steep grades like the Rocky Mountains, or a double-stack intermodal train making a 3,000-mile trip from Los Angeles to New York City in less than a week. Civil engineers and railroad officials from some of the most advanced countries in Asia and Europe are awed at how easily North American railroads move trains like this.
Here in the U.S. we do this sort of thing very well because this is much more important to our economy than airports are.
much is skimmed off by the union then of course the government has a field day ...
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Before I retired, about 17 years ago, union dues were typically two hours pay per month. I understand that it has gone to 2.5 hours pay per month now.
I owned Union and non Union compaines over various periods of time in Calif.
The union employee does have a direct pay to the union as dues but medical, vacation and retirement are also paid indirectly. The union then provides those benefits but are part of the payroll package paid by the employer.
I have never had a gripe w the working man just the Gov and unions .
Hope if you’ve retired you’re getting what was promised to you and if your wife survives you she his covered too. Have seen many ugly things over the years w unions and of course gov.
The purpose of my post was to illustrate the wage cost vs normal private wage scales and then the burden placed on the taxpayer.
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