Neil H. Buchanan

Why the U.S. Government Must Invest in Infrastructure Now, Or Pay A Steep Cost

By NEIL H. BUCHANAN


Thursday, November 19, 2009

Recently, I returned from a trip to Austria, Spain, England, and Scotland. By coincidence, the first issue of The New York Times I picked up after returning to this country included an op-ed column by Bob Herbert, who argued passionately that the United States is falling behind our peers in virtually all areas of public investment -- roads, bridges, electrical grids, education, and more. After my trip, and after looking carefully into the evidence on the matter, I am convinced that Herbert is correct.

In this column, I will first reflect on some of the things I saw on my recent travels that confirm Mr. Herbert's dire assessment of the United States' position, relative to the rest of the relatively advanced economies in the world. I will then consider the broader policy initiatives that continue to be essential for our future prosperity, initiatives that have not been able to gain traction in U.S. policy debates for the last several decades.

My basic contention, however, is a simple one: The federal government is the only entity that has the opportunity to change the foundation on which our future prosperity will be built. If we continue to ignore the pressing needs that only the federal government can fill, then our future will be much poorer and more dangerous. And there is no better time than today to address these needs – for infrastructure improvement will address not only the United States' competitiveness, but also its strikingly high levels of unemployment and underemployment.

The Stark Contrast Between Traveling in Europe, and in the United States

Every traveler must, by definition, come into direct contact with a country's transportation infrastructure. Whether he or she is traveling by train, plane, bus, automobile, or any other mode of transportation, the traveler's experience will directly reflect the practical effects of policy choices made by a country's government in designing its public infrastructure.

It is, of course, dangerous to draw general conclusions about policy based on a few weeks of travel. Bad experiences can happen in even the best-designed systems; inferior systems might seem attractive on a good day. Even so, patterns begin to emerge; and experiences in one country can provide useful examples of alternative ways to organize and build a society.

Moreover, there is ample independent verification of the overall state of the infrastructure in the United States. The Brookings Institution's Metropolitan Policy Program, which Herbert's op-ed cited, includes a Metropolitan Infrastructure Initiative, which has assessed the state of the roads, bridges, etc., in the United States. Its findings are quite disturbing, citing conclusions ranging "from genuine concern about the condition and quality of our existing infrastructure, to difficulties and lack of choices in moving people and goods."

Similarly, earlier this year, the American Society of Civil Engineers issued a report that assessed the state of America's bridges, roads, drinking water systems, sewage treatment facilities, and so on. The engineers' overall assessment, based on an academic grading scale, was that infrastructure in the U.S. receives a grade of "D."

How does poor infrastructure show itself in day-to-day living? Take, for example, my trip from the United States to Vienna, Austria, and contrast that with my return to Washington, D.C. Arriving in Vienna, the airport was uncongested, clearing Customs took less than one minute, and I was out of the airport in a matter of minutes after that. At that point, there were clearly-marked signs for a high-speed train from the airport, which offered a mere seventeen-minute ride from the airport (on the outskirts of that nation's capital city) to the city's center. And in fact, the seventeen-minute train ride really took seventeen minutes.

From there, an array of choices for subways, trams, and buses was available. There was no need to hire a taxi, but if that had been necessary, it would have cost approximately thirty dollars to travel from the airport to my hotel on the other side of the city.

Compare this to my experience when arriving at Dulles International Airport, outside Washington, D.C. The airport was clogged with people, and information was not easy to find. Clearing Customs was a thirty-minute ordeal through a snaking line of angry travelers, even though the actual contact with a customs agent was at most a 20-second encounter. For those who wish to travel into D.C. from the airport, there is no train available. Finding the only bus service from the airport is non-intuitive (to say the least), and that bus ride does not terminate in Washington, but in Arlington, Virginia. A taxi or limo can cost up to one hundred dollars, depending upon where one goes in Washington.

Perhaps Vienna, Austria is a unique example. Austria is a small country, and its capital is not as large as ours. In my travels, however, I took flights through airports in Bilbao, Spain; Munich and Stuttgart, Germany; London; and Edinburgh, Scotland. The contrast with airports in the U.S. was stunning. Flights in Europe were on time or early. Transportation into and out of the nearby cities was inexpensive and efficient. The entire traveling experience, while never enjoyable, was at least never miserable. That's quite a contrast to far too many experiences I -- like so many others -- have endured in the United States.

The Stakes: Economic Competitiveness and Political Relevance

But other than personal inconvenience, readers may ask, why does any of this truly matter? If one wants to travel to D.C., then one puts up with it. The destination is what matters, not the journey, right?

Hardly. Tourism matters – as an extremely important economic engine in many areas, including Washington, D.C. And, even more importantly, business matters. And experiences such as those I had will directly affect the decisions that people in business make about where to locate their companies' offices, and with whom to engage in commerce.

Decisionmakers, both in the U.S. and abroad, know that our transportation networks are decades out of date and are falling apart. That is not enough to drive all business out of this country, of course, but it certainly means that many marginal decisions will cut against the interests of the United States. If we want to be internationally competitive, then we must improve our "welcome mat."

Moreover, the same decisions that will inevitably push businesses to locate in, or even relocate to, other countries threaten to change the notion that the United States is the center of it all. While some pundits claim that U.S. debt or financial policies are pushing business abroad, infrastructure surely remains a profoundly important factor: Is it physically possible to move around in a particular country with reasonable speed and efficiency?

We fall painfully short in that regard. And if we continue to push the world away in this respect, then it is inevitable that the world will, over the years, come to care less and less about the United States.

The Consequences at Home: An Inferior Infrastructure Means Less Prosperity

Let us suppose for a moment, however, that the story I am telling is exaggerated. In particular, imagine that the position of the United States is so dominant and so secure that we could never go the way of Rome or the British Empire (which were also once certain they would never fade). Even on a purely domestic basis, our failing infrastructure affects our own lives for the worse.

The most dramatic examples, of course, involve literal life-and-death events. The inadequate levees in New Orleans led to that city's tragedy in 2005. The collapse of a bridge in Minnesota in 2007 killed thirteen people. Looking beyond the headlines, though, and focusing on our everyday lives, the consequences of our neglect of public infrastructure are no less real. The travel of people and goods within the country is more expensive and less efficient than it could be. Water and sewer systems are inadequate, leading to the spread of disease. The communications and electrical grids are years out of date.

Moreover, our educational system is another central part of our public infrastructure, and our continued neglect of far too many schools dooms innocent children to lifetimes of economic under-performance -- under-performance that harms the rest of the country as well. We need all of our workers to be productive, not just those whose parents can afford to live in nice suburbs.

In short, this is not merely a matter of keeping up with the Austrias and Spains (to say nothing of the Chinas and Indias, which are also investing heavily in their own infrastructure). This is a matter of quality of life in the United States, as well as of our continued domestic economic prosperity. Infrastructure is the starting point for future economic growth.

The Policy Options That Can Fix the Problem: Almost Too Obvious to Believe

Given that our infrastructure is in such poor condition, what policy options must we enact? The report, noted above, from the American Society of Civil Engineers says that we must spend $2.2 trillion over the next five years just to bring the nation's infrastructure into a state of good repair. That, of course, says nothing about what we must do to expand and update for the future.

This would have been a very good year to get started down that road. The federal government passed a stimulus package that could have included at least a first step toward addressing these problems. Instead, we were told that such investments -- precisely because they have long-term, not short-term, payoffs -- are not really "stimulative." Democrats thus had to strip most of the genuine investment out of the bill.

The only good news, if one can call it that, is that the stimulus bill ended up being too small. Yes, the worst-case scenarios of global depression seem to have been averted; and the economy shows signs of actual improvement. Nonetheless, we are years away from any real improvement in the employment situation. We can and should put unemployed people to work building schools, constructing pipelines, laying train tracks, and doing all of the other things that will form the basis of future prosperity in this country.

If we fail to do all of this, we will continue to pay the price. Not generations from now, but every day from today forward. The choice is between sacrificing a little bit now to build the infrastructure that we need, or watching our prosperity slip away. That should not be a difficult decision.


Neil H. Buchanan, J.D. Ph. D. (economics), is a Visiting Scholar at Cornell Law School, an Associate Professor at The George Washington University Law School, and a former economics professor.

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