Infrastructure Spending: Watch the U.S. Fall Behind

In his first State of the Union address on Jan. 30, President Trump called on Congress “to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need.” Trump is expected to unveil a plan to finance this spending on Monday, Feb. 12; the federal government will reportedly provide only $200 billion of the total, with state and local governments covering the vast majority. Since they cannot be compelled to do so, the plan will rely heavily on incentives.

There is bipartisan agreement that the country’s roads, bridges, airports, public transportation systems, seaports and other physical infrastructure is aging, poorly maintained and – not coincidentally – badly underfunded. But how does the U.S. compare to other major economies?

Not well. Using OECD data, we tracked infrastructure spending by the world’s seven biggest economies (as of mid-2017) from 1995 to 2014, the most recent year for which data is available. Specifically, we tracked spending on inland infrastructure – which the OECD defines as “road, rail, inland waterways, maritime ports and airports” – as a percentage of GDP. $1.5 trillion would amount to almost 7.6% of 2017 GDP, but reports indicate that the spending is to be spread over 10 years, not one.

Clearly, the U.S. is out of practice. It hasn’t spent more than 0.68% of GDP in any of the years surveyed, and nearly always came last- or second-to-last out of its peers. The other notable trend is massive spending by China, which admittedly had a lot of catching up to do: the U.S. completed its major infrastructure projects decades ago. Unfortunately, the U.S. hasn’t done much to maintain or update – not to mention outdo – those projects since.

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Cobi Jones writes about the blockchain community in the US. He is an entrepreneur and private investor in blockchain projects