Financial History 138 (Summer 2021) - Page 29

“ Failure to Act ”: Engineers Decry Underinvestment
Every four years , the American Society of Civil Engineers ( ASCE ) estimates the investment needed in each infrastructure category to maintain a state of good repair and earn a grade of B . The most recent analysis reveals that while there have been incremental immediate gains in some of the infrastructure categories , the nation ’ s long-term investment gap continues to grow .
The US is still just paying about half of its infrastructure bill — and the total investment gap has gone from $ 2.1 trillion over 10 years to $ 2.59 trillion over 10 years . As ASCE discovered in its 2021 study , “ Failure to Act : Economic Impacts of Status Quo Investment Across Infrastructure Systems ,” failing to close this infrastructure investment gap brings serious economic consequences .
By 2039 , continued underinvestment in US infrastructure at current rates will cost :
• $ 10 trillion in GDP
• More than 3 million jobs in 2039
• $ 2.24 trillion in exports over the next 20 years
When a nation fails to invest in its infrastructure , the citizens pay the price . Poor roads and airports mean travel times increase . An aging electric grid and inadequate water distribution make utilities unreliable . Problems like these translate into higher costs for businesses to manufacture and distribute goods and provide services . These higher costs , in turn , get passed along to workers and families .
By 2039 , America ’ s overdue infrastructure bill will cost the average American household $ 3,300 a year , or $ 63 a week .
CUMULATIVE INVESTMENT NEEDS BY SYSTEM BASED ON CURRENT TRENDS , EXTENDED TO 2029
ALL VALUES IN BILLIONS
Category
Total Needs
Funded
Funding Gap
Surface Transportation 1 $ 2,834 $ 1,619 $ 1,215
Water / Wastewater /
$ 1,045
$ 611
$ 434
Stormwater 2
Electricity 2 $ 637 $ 440 $ 197 Airports 2 $ 237 $ 126 $ 111
Inland Waterways & Marine
$ 42
$ 17
$ 25
Ports 2
Dams 3 $ 93.6 $ 12.5 $ 81 Hazardous & Solid Waste 4 $ 21 $ 14.4 $ 7
Levees 5 $ 80 $ 10.1 $ 70 Public Parks & Recreation 6 $ 77.5 $ 9.5 $ 68 Schools 7 $ 870 $ 490 $ 380 Totals $ 5,937 $ 3,350 $ 2,588
1 Data taken from ASCE Failure to Act 2021 study + rail funding gap from ASLRRA 2 Data taken from ASCE Failure to Act 2021 study . www . asce . org / failuretoact 3 Dams includes estimates from ASDSO , USACE , Bureau of Rec , and FEMA spending
4 Data based on conversations with ASTSWAMO and RCRA Part C ; Brownfield analysis ; the Superfund funding information does not include DOE ’ s Environmental Management program , which is funded at $ 6 to $ 6.5 billion annually
5 Total needs numbers is based on discussions with the National Committee on Levee Safety
6 Estimates based on National Parks Service , Great American Outdoors Act , National Association of State Park Directors , City Parks , and National Association of State Park Directors
7 Data from State of our Schools : America ’ s K-12 Facilities ( 2016 ). 21st Century School Fund , Inc ., U . S . Green Building Council , Inc .
Sectionalism was evident as far back as the Erie Canal . In 1807 , the US Senate asked the Treasury Department to compile a report proposing ways the federal government could improve the young nation ’ s transportation system . Secretary Albert Gallatin ’ s landmark Report on Roads , Canals , Harbors and Rivers was issued the next year , and noted :
The present population of the United States , compared with the extent of territory over which it is spread , does not , except in the vicinity of the seaports , admit that extensive commercial intercourse within short distances , which , in England and some other countries , forms the principal support of artificial roads and canals … It is necessary , in order to be productive , that the canal should be a communication with a natural extensive navigation which will flow through that new channel .
While President Thomas Jefferson initially supported the initiatives suggested in the report , “ southern members of Congress realized that the northern states would benefit more from the Erie Canal , and that proposal was killed ,” said Derrick Pratt , educator at the Erie Canal Museum in Syracuse , New York . Jefferson himself soured on the idea .
“ New York State realized it had to take the initiative ,” said Pratt , “ and made a $ 2 million appropriation to connect the Mohawk River to the Seneca River . The first season of navigation on the middle part of the canal that was completed first was 1820 . That allowed some toll revenue to be collected , but eventually the state had to spend $ 7.5 million to complete the canal in 1825 .”
The museum is in downtown Syracuse , in the last remaining weighlock building from the original canal . While that segment of the canal has long since been converted to a road , the Erie Canal still operates 339 miles from Albany to Buffalo ; the entire New York State Canal system stretches 524 miles .
“ The state funding for the first section of the canal proved the concept ,” said Pratt . “ The entire original canal was completed on time and on budget and was paid off in 10 years . Today the Canal Corporation is part of the New York Power Authority , and while it technically ‘ loses ’ several million dollars a year , the National Heritage Corridor conducted an economic study that found it generates $ 1.2 billion annually in related activity .”
Some of the locks on the current Erie Canal are beautiful in the evening light as seen from the big picture windows of Amtrak ’ s daily Lake Shore Limited as it winds its way from New York to Chicago , losing a few dollars but making a lot of sense .
Gregory DL Morris is an independent business journalist , principal of Enterprise & Industry Historic Research ( www . enterpriseandindustry . com ) and an active member of the Museum ’ s editorial board .
www . MoAF . org | Summer 2021 | FINANCIAL HISTORY 27