From the New America Foundation this week comes a brief report on the efficiency losses of America's outmoded infrastructure. The costs approach $200 billion per year, with sitting in traffic making up over half that total. An excerpt:
Ah, my work here is done. From the White House today:
The President on Infrastructure Investment: "This is Work That Needs to Be Done. There Are Workers Who Are Ready to Do It."
I was glad to hear that the definition of infrastructure was broad enough to include more than just transportation networks. Read the transcript or watch the video at the link above. Read the Treasury/CEA analysis of infrastructure investment here. From its executive summary:
On his way out the door, Larry Summers joins the Build While It's Cheap Chorus. Writing in The Financial Times, Alan Rappeport reports:
Larry Summers, the outgoing director of the White House National Economic Council, said the US must ramp up spending on domestic infrastructure to drive the economic recovery.
Speaking at the Financial Times’s View from the Top conference in New York, Mr Summers called it a “short-term imperative and a long-term macroeconomic imperative” that the US government increase infrastructure investment. He said that a combination of low borrowing costs, cheap building costs and high levels of unemployment in the construction sector made this the ideal time to rebuild roads, bridges and airports.
I presume that Summers did not come to this view just as he thought about leaving. But it is worth pointing out that he was one of the chief proponents of "timely, targeted, and temporary" as the recession was beginning.
Connections to New York City—the country's largest metropolitan economy—are economically crucial to the state of New Jersey. At present, New Jersey commuter trains share a bottleneck of a tunnel under the Hudson River with Amtrak, the national rail carrier, running on just two tracks that were originally built in 1910. The new tunnel, it is estimated, would double the number of New Jersey residents with a 50 minute or less commute to Manhattan. But the bigger picture is that traffic demand will only rise, and new capacity must ultimately be added, one way or another. If it isn't built now, when things are cheap, it will be built later, when things are expensive.
Writing in The Washington Post, Ezra Klein correctly notes that the case for infrastructure spending during an economic downturn is compelling and that the most recent proposals for infrastructure spending are too small. He writes:
People say that the government should be run more like a business. So imagine you are CEO of the government. Your bridges are crumbling. Your schools are falling apart. Your air traffic control system doesn't even use GPS. The Society of Civil Engineers gave your infrastructure a D grade and estimated that you need to make more than $2 trillion in repairs and upgrades.
Sorry, chief. No one said being CEO was easy.
But there's good news, too. Because of the recession, construction materials are cheap. So, too, is the labor. And your borrowing costs? They've never been lower. That means a dollar of investment today will go much further than it would have five years ago -- or is likely to go five years from now. So what do you do?