It’s fair to ask if the new release by the American Society of Civil Engineers calling for trillions in infrastructure investment is analogous the American Society of Barbers calling for everyone to run out and get haircuts. But while I need to learn more about their methods, their results—we seriously need to upgrade our public goods—strongly resonate:
ASCE’s report focuses on the electrical grid, water and wastewater, surface transportation, and airports, waterways and ports. All are obviously critical inputs to the nations productive capacity, they’re all aging, and according to the report, the expected investment levels are well below what’s needed, most notably in surface transportation.
It is widely agreed upon by economists of all stripes that the private sector will underinvest in such public goods; no firm or corporation can raise or recoup the costs of national systems of roads, waterways, airports, etc. Of course, this insight far from guarantees that the political system will optimally or efficiently invest in public goods—oversight is as critical here as elsewhere.
But the current mantra of “Washington has a spending crisis” is divorced from both the reality of our fiscal accounts and importantly, our infrastructure needs. I can’t vouch for every number in here re the loss of GDP and jobs, but they’re clearly pointing in the right direction.