As Florida works to reconnect its electric grid, Puerto Rico seeks to rebuild one, and Texas continues to detoxify and reopen its water supply, it becomes obvious that the infrastructure that supports our modern way of life is much more fragile than we thought. In key areas such as infrastructure finance and maintenance, we have allowed governmental organizational capacity to atrophy over the past several decades. The anti-government era that came to power with Ronald Reagan’s election in 1980 has resulted in insufficient investment in transportation, water, sewage, electrical, and storm control systems. It is not that no money has been spent on these collective goods, but that we are not keeping pace with our needs. I think it’s useful to look at how we collect and spend infrastructure money, which is largely (75%) a state and local government function in America. According to Chad Shirley of the Congressional Budget Office:
“Almost all spending on transportation, drinking water, and wastewater infrastructure is done by the public sector. Federal, state, and local governments spent $416 billion on it in 2014. That amount equaled about 2.4 percent of gross domestic product, a percentage that has been fairly stable for roughly 30 years. The largest amount of public infrastructure spending in 2014 went to highways ($165 billion), followed by water utilities and mass transit and rail. About a quarter of the $416 billion (roughly $100 billion) came from the federal government, and three-quarters (a little over $300 billion) came from state and local governments. Of the federal spending, roughly two-thirds paid for new, improved, or rehabilitated structures and equipment. State and local governments spent money on those things as well, but a much larger proportion of their spending paid for the operation and maintenance of infrastructure. Furthermore, state and local governments pay for most of the facilities that schools require.”
China spends about 8.8% of its GDP on infrastructure, India about 5.1%, and Japan about 4%. A great deal of this nation’s national public resources that could be spent on infrastructure is devoted to our military budget, which totals about 3.5% of our GDP. Some nations spend more of their GDP on the military than we do ― Saudi Arabia 10.4%, Israel 5.1%, and Russia 4.5% ― but most spend less; China only spends only 2.1% of its GDP on the military and Germany spends 1.2%. That may be why China and Europe have high-speed rail while we have low-speed Acelas. The main story on federal infrastructure funding is that we spend much more capital on the military than on civilian projects. The world is a dangerous place, and we must protect ourselves from threats to our well-being. Some threats come from abroad, however as we learned in recent weeks, some are the result of natural disasters.
While I am not minimizing threats posed by terrorists and crazy people with missiles, I think it is also time to address the threats posed by extreme weather events as well. Climate change is making extreme weather events more severe, and our patterns of land use have reduced natural protection from weather events and placed more people in the pathways of exposure to risk. I am not arguing that we need less money for national defense, only that we need more money to solidify, modernize, and reinforce our infrastructure. Our communities must be built to assume that they will be flooded or otherwise impacted by extreme weather. Our shorelines and settlements must be built to resist and quickly recover from these events. Our airports, ports, roads and rails need to be engineered for resiliency as well as perform their basic transport functions. Sewage, waste and water systems need to be made less vulnerable to flooding.
We can strengthen our energy system while reducing greenhouse gases and we should start investing in a modern electrical grid immediately. Decentralized micro-grids and larger scale smart grids are needed to make the electrical system more efficient and resilient. Research and development of solar cell, wind and electric battery technologies should be undertaken and considered critical areas of national need. As soon as these new technologies are developed we should implement them. Their use will enable communities and businesses to function even when the electric grid is offline.
This will take money. I recently proposed development of a national trust fund to reconstruct homes and infrastructure after disasters and to conceptualize disaster reconstruction as a national security issue. But we should not wait for disaster to strike before we act. We can rehabilitate infrastructure while it is still functioning to make it more resilient and to avoid the need for reconstruction. Again, this will take money. To generate the funds needed we can either cut the military budget, cut entitlements or raise taxes. Since most economists believe that infrastructure spending pays off in increased productivity, we can view any increased taxes as an investment in future economic growth. If public infrastructure investment is based on borrowed money, it can crowd out private investment and our nation’s productivity growth is less pronounced.
New taxes seem to be infeasible in the current political climate. It is likely that over the next few years, increased federal resources for infrastructure will be disguised as post-disaster reconstruction funding. Many of those funds will be borrowed and will be the result of intense political horse trading. We have an opportunity now to take the recent (and still ongoing) disastrous hurricane season, along with the memory of “superstorm” Sandy, and use it to frame a rational and well thought through program of infrastructure construction, restoration and maintenance. As hard as it is to imagine anything rational emerging from this federal government, it still makes sense to try.
People in Texas, Florida, Puerto Rico and the U.S. Virgin Islands have come together in heroic fashion to help their communities struggle back to a semblance of normalcy. They are removing drywall, detoxifying basements and mold, clearing trees and debris, and doing whatever sweat equity and human compassion can accomplish. But there is a limit to what a community can accomplish without the federal government’s capital, technology, and expertise. Harvey, Irma, Jose and Maria have resulted in massive damage throughout this nation and throughout the Caribbean. While we may not see storms like this every year, the cost of weather-related damage has been increasing steadily throughout the 21st century.
This is a crisis that calls for enhanced governmental capacity to address a new, national issue of national security. We know that government is capable of developing these new capacities. We have already seen it with the reasonably well coordinated federal, state and local first response to these storms. Weather forecasts have been rapidly communicated, supplies have been prepositioned, emergency facilities have been rapidly opened and many lives have been saved. First responders have staffed both evacuations and well-organized, determined rescue efforts. Now it’s time to make sure that we reduce our vulnerability to the potential impact of storms, sea level rise, droughts and forest fires. The small government ideology of the Tea Party and conservative movement has not often opposed the development of government capacity for defense and homeland security. They need to be convinced of the need to develop enhanced federal government capacity to plan, fund and manage infrastructure development. This is a prudent response to a clear and growing danger.