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." In an open letter to Congress, the White House outlined a plan for the federal government provide $200 billion over 10 years, with "incentives in the form of grants" encouraging state and local governments to make up the other $1.3 trillion.

According to a budget proposal released Feb. 12, this federal spending – together with additional funding for the military and increased border enforcement – would be paid for through $3 trillion in non-military spending cuts over 10 years. Congress must approve any federal spending increases or cuts, and legislators tend to ignore presidential budget proposals.

There is, however, 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. Trump's letter said that the U.S. "has fallen further and further behind other countries." Is that true?

Yes. 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 the package is intended to be spent 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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