Not-sexy infrastructure is much more important than you think

Every two minutes, a water main breaks in America. The total amount of treated water wasted every day is about 6 billion gallons, or 9,000 swimming pools. Every day! And it highlights why the infrastructure bill that President Biden just signed into law is so important. The need to fix America’s crumbling infrastructure has become a weary cliche — but that doesn’t change the fact that it is indeed falling apart. And just as is the case with any kind of deferred maintenance, the longer we wait, the worse the problem becomes — and the more expensive it will be to fix.

One way to make clear what a shift the Biden administration’s infrastructure legislation represents is to look at the amount that the federal government has spent on infrastructure over the decades. In the 1950s and ’60s, infrastructure spending as a percent of gross domestic product was over 1%. In 2019, decades later and with an exponentially bigger economy, spending was about 0.7% of GDP. The new surge of spending from the bill will raise it to about 1.3% over the next five years. And the bill has many good ideas to encourage private investments that would increase these numbers.

Economists disagree on exactly how much growth is produced by infrastructure spending. But if we take a longer and broader view, the payoff seems obvious. Felix Rohatyn, the banker who rescued New York City from bankruptcy, wrote “Bold Endeavors,” a book that shows how, over 150 years, federal investments created the American economic system — from the Erie Canal to the first transcontinental railroad to rural electrification to the interstate highways.

We tend to think of the United States’ competitive advantages largely in terms of either the capitalist system or the hard-working and inventive people who have come to the country over the centuries. While those things are certainly a part of the equation, other countries can boast similar advantages. An almost unique feature of America is that it has the world’s largest and most easily accessible consumer market in the world, a point made in Peter Zeihan’s excellent book “The Accidental Superpower.” As he notes, the United States has 17,600 miles of navigable waterways, the world’s largest network by far. China and Germany have 2,000 miles each. Those waterways feed into a series of massive deepwater ports. Some of the largest natural harbors are Puget Sound, San Francisco Bay and the Chesapeake Bay. The latter has “longer stretches of prime port property than the entire continental coast of Asia from Vladivostok to Lahore.”

But this massive advantage has been eroding for decades as waterways, railroads and ports have all faced increased traffic and insufficient investment. Almost 80% of the inland locks and dams that made America’s waterways work should have been replaced by now, many of them being 60 or 70 years old. New locks would mean barges would move through the system much faster. Similarly, investments in port infrastructure will ease up these crucial choke points. Better roads and faster railways will all make a difference.

This is a once-in-a-generation opportunity for Democrats to show the country that public investment can work. That makes it crucial that this money should be spent well and fast. Common Good, an organization that advocates good and cost-effective government, put out an excellent report in 2015 on infrastructure approvals that should be read by everyone involved in administering these funds at the federal, state and local levels. A six-year delay in starting construction projects, it notes, could cost America $3.7 trillion, which is more than double the amount of money needed to modernize key sectors of the country’s infrastructure by the end of the decade. Common Good’s Philip K. Howard writes in the report, “As practiced today, environmental review often harms the environment. America’s antiquated power grid, for example, wastes the equivalent of 200 coal-burning power plants.”

Infrastructure sounds like a bore, but it’s important not simply because of the obvious fact that it makes the economy run. Spending on infrastructure is a sign of a healthy society that is willing to invest in its future. Yale economist Ray Fair wrote a paper in September in which he analyzed the United States’ infrastructure spending from 1929 to 2019. He found it was around the 1970s that spending as a percentage of GDP started to plunge, never to fully recover. It was also about that time America began routine deficit spending. To him, both are signs of a society that is more interested in spending on consuming in the present than investing for the future. The federal government spends $4 for every senior citizen compared with $1 for every person 18 and younger. In 2019, the federal government spent $4 on the elderly and disabled for every $1 it spent on children.

Fair sees the infrastructure bill as a very small shift in that long-term trend. But let’s celebrate the change and hope that we can begin, once again, to embark on some bold endeavors for the country’s future.