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Greater infrastructure spending needed in US

By James M. McClintick (China Daily USA)

Updated: 2015-09-26 13:13:48


In an effort to address its economic slowdown, China has been rapidly moving forward on an array of national public infrastructure projects.

In April 2014, for instance, China's State Council announced dozens of massive new projects, including the construction of airports, railroads and harbors; the development of wind power and hydropower; and the modernization of the oil and gas industries.

Not surprisingly, China spends far more money on infrastructure than any other nation in the world. Specifically, since the early 1990s, China has invested more than 8 percent of its annual gross domestic product (GDP) in infrastructure projects.

In addition, under China's current Five-Year Plan, the country will have invested as much as 10 trillion yuan in public facilities and rail by the end of 2015. That is a staggering amount by any measure.

The infrastructure contrast between China and the United States is stark and growing ever more so. Although the US invested as much as 4 percent of its annual GDP in infrastructure during the 1950s and 1960s, that number is down to just 2.4 percent today. The result of the disinvestment is troubling and can be seen everywhere in the country.

American airports and harbors, for instance, are overburdened with far more traffic than they can accommodate, and more than 4,000 dams are at risk of failure. Roadways are congested and deteriorating, resulting in accidents and traffic jams that force commuters to spend more than 4 billion hours each year driving to and from work.

In addition, bridges have decayed to such a point that repairing them would cost approximately $140 billion. Worse yet, the country's aging infrastructure poses a direct threat to human health and the quality of life.

According to the US Environmental Protection Agency, more than 1.2 trillion gallons of untreated sewage leak into US waterways each year from antiquated sewer systems, some of which use components that are 200 years old.

For all of these reasons, the American Society of Civil Engineers (ASCE) has awarded a grade of D+ to the United States, based on the condition and performance of its infrastructure. In its report, the ASCE identified a "pressing need for modernization" and noted the "significant backlog of overdue maintenance" across various infrastructure systems. The ASCE calculates that correcting these problems will require the US to invest roughly $3.6 trillion by 2020 in critical upgrades and repairs.

The enormity of this problem is harming America's ability to compete economically with China and other countries. This fact is not lost on President Obama, who visited China late last year while participating in the Asia-Pacific Economic Cooperation and G20 summits. After taking note of China's newly modernized airports, electrical grid and broadband systems - among many other developments - he observed, "The one thing I will say is that if [the Chinese] need to build some stuff, they can build it. And over time, that wears away our advantage competitively."

That moment is now at hand. For the United States to remain a global superpower with a first-class economy, the federal government must dramatically increase and expedite funding for infrastructure. Although the US House of Representatives recently voted for a bill that would extend funding for highway repair and transportation programs over the short term, Congress has not passed a long-term transportation bill in 10 years.

This is because lawmakers tend to resist spending on infrastructure programs out of the misguided belief that doing so would raise the federal deficit and harm the fragile American economy further.

In reality, the opposite is true. Experts have found that spending just $1.3 billion on American infrastructure in 2015 would create tens of thousands of domestic jobs in construction and related industries. In addition, such an investment could add $2 billion to the nation's real economic growth and reduce the deficit by $200 million for the year.

Then, once completed and operational, the new infrastructure would enhance the economy's productive capacity, resulting in even more growth in long-term employment. This increase in economic activity and employment would provide a much-needed boost in tax revenues.

In addition, the improvement to transportation systems would allow faster movement of goods and services throughout the country, lowering prices for consumers and raising profits for companies.

All of these factors should motivate American policymakers to move beyond their shortsighted concern with containing federal spending and embrace a robust infrastructure program.

To some extent, China's strong commitment to national infrastructure spending is reminiscent of America's in the early- and mid-20th century. Between 1933 and 1943, for instance, the federal Public Works Administration under President Roosevelt funded the construction of more than 34,000 projects, including roads, airports, dams, railways, schools and hospitals.

Then, in 1956, President Eisenhower signed the Federal-Aid Highway Act into law, which allocated $26 billion for the creation of a 41,000-mile network of interstate highways. These projects have all benefited the United States in ways that are immeasurably greater than the original cost of funding them.

Since the 1960s, however, American investment in large-scale public works has fallen dramatically. Meanwhile, China, India, and other countries have been forging boldly ahead with serious investment in transit systems, airports and numerous other projects. There is a strong correlation between a nation's economic growth and its investment in infrastructure, as the Chinese government fully recognizes. Given this fact, and Americans' deep frustration with the state of their own country's infrastructure, it's time for Congress to open the public purse and once again make a long-term commitment to modernizing the nation. Otherwise, the United States will simply rest on the laurels of yesterday's public-works achievements while China and other up-and-coming nations quietly pass it by.

The author is James M. McClintick is an attorney and consultant in Chicago.


 Greater infrastructure spending needed in US

One bullet train stops at Shenyang North station in June. The total length of China's high speed railway will reach 20,000km by the end of this year. Xinhua