During a speech in Jacksonville, President Obama pointed to our “crumbling infrastructure” as an impediment to trade. He indicated this is hurting the American economy. But, he has a “plan” for new investments into the nation’s infrastructure.
Is there really a problem? Are our highways, rail lines and bridges on the verge of falling apart?
According to studies into growth and Evan Soltas at Bloomberg, the answer is no. Studies show the US has been amazingly steady in our infrastructure spending, averaging between 2.3 percent and 3.1 percent of GDP since 1956 and 3.3 percent of GDP since 2006. We’ve actually outspent European governments on infrastructure improvements over the last 7 years, as they have averaged .2 percent of GDP less than the US.
The President said we have “more than 100,000 bridges that are old enough to qualify for Medicare.” Yet, the Reason Foundation examined 20 years of state highway data and found that deficient bridges across the country have dropped from 37.8 percent of bridges in 1989 to 23.7 percent in 2008. While that is still an alarmingly high percentage of “problem” bridges, it is clear the issue is being addressed.
And, as for his claim our infrastructure threatens international competiveness, The World Economic Forum recently listed the five most problematic factors for doing business in the US, and infrastructure did not make the list. It cited inefficient government bureaucracy, tax rates, tax regulations, access to financing and restrictive labor regulations as the biggest impediments to business in the States.
Obama, however, has no plan to address these five points. In fact, if past performance is an indication then his infrastructure plan will make the bureaucracy point worse. When the President pushed through infrastructure projects as part of his stimulus bill during his first term, $90 billion was shifted to green energy companies (several of whom have now gone into bankruptcy), $1.3 billion to subsidize Amtrak, and $8 billion for a boondoggle high-speed rail system.
If the President is concerned about the nation’s ability to bring in foreign business, he should pay more attention to what experts say and less to funneling money into pork barrel schemes.
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