One of the biggest threats to America’s future has the easiest fix
By Miles Kimball and Noah Smith
In the 1990s, with its economy stagnating after a financial crisis, Japan lavished billions on infrastructure investment. The Japanese government lined rivers and beaches with concrete, turned parks into parking lots, and built bridges to nowhere. The splurge of spending may have allowed Japan to limp along without a full-blown depression, but added to the mountain of government debt that remains to this day.
Given Japan’s experience, it may seem odd for us to call for an increase in America’s infrastructure investment. In terms of infrastructure, the US now is not Japan in the 1990s. They didn’t need to build … but we do.
First, the United States is a lot larger than Japan, and larger than the densely populated countries of Europe. We have a lot more ground to cover with highways, bridges, power lines, and broadband infrastructure. We need to be spending a higher fraction of our GDP on these transportation and communication links—but instead, we spend about the same or less.
Second, where Japan’s infrastructure was in good condition when the spending binge started, America’s infrastructure is in hideous disrepair. The American Society of Civil Engineers gives America’s infrastructure a “D+”. Although infrastructure opponents typically dismiss the opinions of civil engineers (who, after all, stand to personally gain from increased infrastructure spending), McKinsey released a recent report saying much the same thing. McKinsey notes that Japan is spending about twice as much as it needs to on infrastructure. But the US is spending only about three-fourths of what we should be spending. The Associated Press piles on, saying that 65,000 American bridges are “structurally deficient.” A former secretary of energy says our power grid is at “Third World” levels. The list of infrastructure woes goes on, and on, and on.
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http://qz.com/173492/one-of-the-biggest-threats-to-americas-future-has-the-easiest-fix/