No Need For Increasing Investment In US Infrastructure: US Infrastructure Quality Improving Over Last 20 Years

Posted by Milton Recht:

From Bloomberg, "The Myth of the Falling Bridge" by Evan Soltas:

But the idea that the U.S. has an infrastructure crisis? No. A broad, permanent increase in spending is unwarranted.

How much does the U.S. spend on infrastructure compared to the rest of the world?

It's in the middle of the pack. Between 2001 and 2011, annual public investment averaged 3.3 percent of gross domestic product, according to the Organization for Economic Cooperation and Development. The average OECD nation spent 3 percent of GDP over the same period.

A 2011 study by Marco Percoco, a professor at Bocconi University in Italy, shows that U.S. public investment has tracked the OECD average since at least 1970. Developed nations invest between 2 percent and 3.5 percent of GDP. The U.S. is about where it should be -- close to peer nations such as Canada, Germany and Australia. Nations that spend substantially more tend to be in a phase of catch-up growth, such as South Korea and Poland.

Is the U.S. reducing its infrastructure spending?

It's been pretty steady. Total public construction spending has varied between 1.7 percent and 2.3 percent of GDP for the last 20 years, according to the U.S. Census Bureau. By the Congressional Budget Office's slightly different measure, infrastructure spending has been between 2.3 percent and 3.1 percent of GDP since 1956.

Is the quality of infrastructure worsening?

Just the opposite. Believe it or not, infrastructure has improved significantly over the last two decades