The consequences

The trouble with fixing our infrastructure and expanding it to deal with growing demands placed on it lies in finding the roughly $150 billion a year needed to do so.  Governments at all levels are already swimming in debt, and the infrastructure-financing systems that are in place at the moment (gasoline tax, highway fund, private/public partnerships, etc.) are either completely inadequate, or haphazard in their application.  The sad thing is, infrastructure spending is one of the best investments that the government can make – according to the US Chamber of Commerce, “over two years, one dollar spent on infrastructure construction produces roughly twice as much ($1.92) in direct and indirect economic output.”

That’s a clear 90+% return on investment (ROI).  In the business world, that kind of investment decision is properly classed as a “no brainer.”  The costs of not investing make the ROI of infrastructure projects even more appealing – the ASCE estimates that we’ll face $1.2 trillion in costs to businesses between now and 2020, and $611 billion in costs to households, if we fail to change infrastructure spending trends. An additional investment of “only” $157 billion per year between 2013 and 2020 would prevent $3.1 trillion in lost GDP, $1.1 trillion in lost trade, $3,100 per household in lost disposable income annually, and 3.5 million lost jobs.  Their projections for 2030 and 2050 are even scarier.

It takes money to make (or save) money – ask any CEO or investor.  Our failure to look ahead on our infrastructure has cost us and will continue to cost us.  But putting sufficient investment into our infrastructure in the short-term will pay off in a big way, provided we can muster the political and financial will to do so.

 

Next page:  Interactions – Infrastructure

Previous page:  Lack of Investment

Back to Infrastructure

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s