Roosevelt Institute | Cornell University

Infrastrucure and the Economy

By Hilary GelfondPublished May 1, 2013

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This past Tuesday, the American Society of Civil Engineers (ASCE) released its 2013 Report Card for American Infrastructure. With an average grade of a D+, the ASCE estimates the America needs to spend $3.6 trillion on infrastructure improvements by 2020, $1.6 trillion more than current funding.[i] However, creaky bridges, congested roads, outdated school buildings, and unreliable energy grids have a greater impact on American wellbeing besides the obvious safety hazards.
By Hilary Gelfond, Published 5/1/13

This past Tuesday, the American Society of Civil Engineers (ASCE) released its 2013 Report Card for American Infrastructure. With an average grade of a D+, the ASCE estimates the America needs to spend $3.6 trillion on infrastructure improvements by 2020, $1.6 trillion more than current funding.[i] However, creaky bridges, congested roads, outdated school buildings, and unreliable energy grids have a greater impact on American wellbeing besides the obvious safety hazards. Our failing infrastructure also inhibits America’s economic growth as congested roads and unreliable bridges cause businesses to raise prices to compensate for higher shipping costs. In addition, inefficient transportation methods provide incentives for businesses to invest overseas, and the inadequacies of public transportation methods (buses, trains) further diminish worker productivity.[ii] Among all nations, the United States ranks 24th in infrastructure quality, and as government investment falls in this key area, developing nations such as China are rapidly improving.[iii]

The United States is currently faced with two problems: a slow economic recovery and infrastructure in need of repair. However, they have a common solution. As demonstrated in a study performed by the Boston Federal Reserve Bank, when the government directs funds toward infrastructure repair and development, jobs will be created, new businesses will emerge, and the overall growth rate of the economy will increase. Thus, the United States should use this crucial time in its development to repair its infrastructure, and create a “New Deal” of sorts that, among other things, allocated funds towards a high-speed rail system to connect the nation, green buildings, roads, and modern school buildings. The private sector does not have much incentive to repair public infrastructure.[iv] Thus, government must develop comprehensive policy to address the issue. While the world is rapidly increasing its standard of living through technological development, the United States will lag in this growth if it cannot maintain a basic backbone of infrastructure.[v]



[i] http://www.infrastructurereportcard.org/a/#p/overview/executive-summary


[ii] http://usatoday30.usatoday.com/money/economy/story/2012-05-20/creaking-infrastructure/55096396/1


[iii] http://reports.weforum.org/global-competitiveness-2011-2012/


[iv] http://www.bos.frb.org/economic/neer/neer1990/neer590b.pdf


[v] http://www.cbsnews.com/8301-201_162-57575112/u.s-gets-d-on-infrastructure-report-card/