If this topic sounds a little familiar, we have discussed infrastructure in the past, including in November 2008 before we knew Barack Obama had been elected president. Unfortunately, bureaucracy prevailed, and progress was slow.
In that first editorial, we defined infrastructure as highways/bridges, the power grid, drinking water and sewer systems, levees and dams, and ports and locks. Government – local, state and federal – is charged with maintaining and upgrading our infrastructure. Interestingly, looking at the plans of our current administration, “real estate” such as schools, hospitals and airports are also included in their infrastructure definition.
It’s hard to know where to start, but we thought it would be informative to look at where things stand now and what the Trump administration might be planning. A recent letter from the Alliance for American Manufacturing (AAM) to the incoming Trump administration indicates the following.
- America has 156,000 deficient bridges, an investment backlog of $85.9 billion for roads and $200 billion lost annually in economic activity due to inefficient rail transportation.
- Wasted and inefficient time at U.S. airports accounts for roughly $8.1 billion in annual losses to the airline industry.
- Nearly 3 in 4 voters (74%) say large infrastructure projects, financed with taxpayer money, should be built using American materials and workers.
There is much to do, and the Trump administration has created an infrastructure priority list. Nationwide, they have compiled a list of about 50 projects totaling at least $137.5 billion. The administration anticipates spending will be $150 billion in 2017 with similar expectations over the next two years. That’s a spending level of about $411 million/day! Hopefully, we will get our money’s worth. I saw a recent study that showed $1 billion bought a subway 0.35 miles long in New York, but it bought 2.62 miles in Paris.
While it won’t help all infrastructure projects, Trump’s plan involves attracting private-sector funding through federal tax credits. It’s believed this plan could spur $1 trillion in private investment over 10 years. Perhaps this might also keep costs in check. The Democrats have their own proposal for a $1 trillion infrastructure bill. While the means to the end might be different, infrastructure is clearly a need that interests and involves everyone.
It’s important that something is done. Doing nothing is not an option. A 2016 report from the American Society of Civil Engineers titled “Failure to Act” estimated that inadequate infrastructure spending could cost the U.S. $14 trillion in GDP through 2040. U.S. freight railroads understand this fact, and the Association of American Railroads recently estimated that $22 billion will be spent in 2017 to maintain and upgrade the nation’s private rail network.
The interesting and unpredictable factor is how to determine future use of some of the nation’s infrastructure. A number of recent news stories in our magEzine have discussed autonomous vehicles and how this, as well as services such as Uber, will reduce the number of cars on the road, which will be less taxing on infrastructure such as roads and bridges.
Beyond the obvious needs, infrastructure improvement is also a problem of national security. We have previously detailed some of the issues with our power supplies having no backup systems or replacement parts in the event of an EMP-type event/attack.
It’s clear that there’s a big job ahead. We may not all agree as to the best way to accomplish it – more or less government – but our industry and the overall economy will benefit as infrastructure projects are undertaken across the U.S. It’s not optional, so “let’s git ‘er done!”