Analysis: The US Infrastructure Crisis - Business Newsroom

Analysis: The US Infrastructure Crisis – Business Newsroom

Recently, a video emerged on social media showing the progress of building a tunnel under a highway in the Netherlands. It was impressive that the tunnel was completely built in one weekend, and within a few days, the road over the tunnel was transporting passengers back to and from their destination. That kind of vision is totally alien to the United States, where Infrastructure Week runs year-round.

Although it has the largest economy in the world and is famous for developing its infrastructure during the nineteenth and twentieth centuries, the United States has fallen behind. According to Statista search As of 2019, the United States lags behind a dozen other countries, ranging from the Netherlands to Singapore and Spain to the United Kingdom in terms of the overall quality of public infrastructure.

In 2020, the United States Certainly A “C-” rating for its general infrastructure. Among the reasons included in the lackluster ranking are some startling statistics: About 6 billion gallons of water are lost in the country every day due to massive water cuts, 43% of public roads in the United States are “ in poor and moderate condition, ” and one in five children. Americans have no “contact.” Fast internet.

The infrastructure issue has been a focal point of American politics for decades, but it has taken center stage in recent years. Then-candidate Donald Trump in 2016 Prepare Spending $ 500 billion on infrastructure investment; President Joe Biden Asked Congress for nearly $ 2,000,000,000,000.


According to the Organization for Economic Cooperation and Development (OECD) dataThe United States spends a similar amount of its public resources on public investment compared to other developed countries. When national government spending is compared as a percentage of gross fixed capital formation (GFCF), the United States is not far behind other countries with better infrastructure.

Investments by sector in government spending include research and development, “military weapons systems, transportation infrastructure, and public buildings such as schools and hospitals”.

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Larry Summers, a former vice president for development economics and chief economist at the World Bank and director of President Obama’s National Economic Council, said the modern economy is in a “secular recession.” This phenomenon is said to consist of low interest rates, low inflation, slow expected economic growth, and slow unemployment. solve this problem , Summers says, Is “increase investment, use infrastructure wisely, procure more efficiently and locate faster.”

Ed Glaser, economist and professor at Harvard, agrees with Summers that more investment in infrastructure is needed. he is DiffersHowever, insofar as Summers sees investment in infrastructure as a solution to recessionary pressures. “We should see it as a reasonable investment for the future of this country,” says Glaser. Glissar “We really believe in him[s] There is no place where tens of billions of dollars can easily be wasted on infrastructure, which makes implementing projects extremely costly for the wrong reasons. “

Glaser and Summers agree that infrastructure investment is vital to American prosperity, especially for low-income communities disproportionately affected by the recession caused by the Coronavirus. But Glissar insists on caution. “The strategy that says we know exactly what to do – write bigger checks – is probably the last thing we need in the world.” For the Harvard economist, there is a reason to spend more, but spending needs to be targeted and precisely targeted in order to get the best possible return from taxpayers’ money.


Much of the infrastructure investment equation includes the ability to innovate. America has long been recognized as a global innovation hub, due in large part to the country’s large number of immigrants and the thriving international university scene. Innovation allows taxpayer money and private investors to earn higher returns on investment than they would otherwise.

The American Chamber Foundation has that Are fighting This “innovation drives economic growth”, and that “American innovation and enterprise genius” places the nation in a key position for sustainable economic expansion in the long term.

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“Ultimately, the state’s policies and programs that actively promote entrepreneurship, innovation, technological development, and job creation are rooted in market realities,” the Chamber continues. This means building on the country’s existing core industries and technological advantages, while having the visibility and tools to pursue opportunities in developing and emerging sectors. “

Arizona in particular has seen the benefit of such an approach. Under Governor Doug Ducey, the state benefited from its low taxes and low statutes. The Arizona Commerce Authority, founded during Governor Jan Breuer, as well as a host of other public and private institutions, Accelerate this growthNow standing Talkative – bravado One of the most vibrant job markets in the country as companies and individuals migrate to the country from all parts of the country and the world.

Arizona’s growth has led to the growth of its public treasury, allowing Governor Doug Doss and the state legislature to expand their investments in infrastructure even as the COVID-19 pandemic continues. Recently, the governor Announce $ 230 million in new infrastructure expenditures.

Responsible for infrastructure development

As Arizona continues to expand its horizons, a statewide infrastructure solution cannot be solved alone. There is a bipartisan consensus in Washington to increase infrastructure spending, but some are concerned that simply throwing money at the problem will do little to solve current structural problems.

Glazer Are fighting The expansion of the regulatory burden, including the large federal bureaucracy that often delay projects for years, is greatly contributing to the malaise of America’s infrastructure. The emergence of local interests in relation to new developments also slow down projects. “The obligations have been expanded [need to] Effortlessly earned, Glaser says, avoids inconveniencing anyone, causing costs and delays to skyrocket.

Under the Trump administration, President Event Various executive orders remove some of the red tape that many economists believe is hindering infrastructure development. Under President Trump, the Executive Authority did the work of A. Joint efforts “To speed up the federal licensing process for infrastructure projects, including new mines, highways, pipelines, and other projects.” According to the World BankAmerica ranked 15th out of 33 countries in the Organization for Economic Cooperation and Development for ease of licensing in 2017.

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The liberalization of infrastructure development under Trump was mainly driven by momentum to accelerate economic growth in the United States.

Public sector unions can also be an obstacle to developing the United States’ infrastructure. Bee Case Study As for public sector unions and their ability to “manipulate both supply and demand,” California public sector unions have lobbied for policies that have increased the state prison population, and thus opportunities for union membership, which represents prison guards.

The California Policy Center has He said A similar dynamic is taking place between public sector unions and infrastructure development. By using environmental considerations as the basis for increased spending on infrastructure and broad legislation, the Union is stimulating excessive investment in infrastructure in order to[e] Payment and benefits … “They describe this process as self-reinforcing.” Since the cost of living inevitably rises due to artificial restrictions on the supply of land and energy, union workers negotiate even higher salaries and benefits to compensate, and the monopolies of the companies that control current supplies get more revenue from land, energy and profit, ”says the center.

While many disagree about how America is committed to further infrastructure development, it is Broad agreement The government must do more to address this problem. It is up to policymakers, legislators, and influencers to decide whether the federal government will take a closer approach to that of Summers or Glazer.

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