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The Calvert-Henderson Infrastructure Indicator unpacks macro-statistics to reveal an ongoing debate: To what extent has the U.S. been overlooking the vital role infrastructure plays in undergirding its economy? In 2009 this debate is settled. The USA has under-invested in its vital infrastructure for decades, as evidenced by the bridge collapse in Minneapolis and breached levees that flooded New Orleans, to floods along the Mississippi River and in the Washington D.C. commuter trains’ collision and massive water main break. At last, the Obama stimulus plan is addressing a backlog of over $1 trillion, with $13 billion for high speed and commuter rail and over $50 billion for renewable energy and the new smart electric grid. Historically, infrastructure referred to highways, railroads, harbors, bridges, aqueducts, public buildings, dams, and the like. Industrial societies evolved airports, communications systems, energy supplies, water, and other utilities. Today, infrastructure includes education, research & development, computerized systems, and all taxpayer-supported systems used in commerce. Between 1947 and 1999, the public and private infrastructure capital stock of the U.S. more than tripled in real terms to stand at $7.4 trillion, two-thirds of which is public infrastructure.
The indicator picks up the recent trend to privatize growing areas of formerly publicly-owned infrastructure, including electric utilities, phone, water, and other services. After the 2001 electricity blackouts in California, a re-evaluation of deregulation of such vital infrastructure is underway. Such publicly funded investments used to be “expensed” items in GDP accounts. As of 1996, a more realistic asset budget in GDP now accounts for such investments as “assets” since they often have a useful lifetime of 50 to 100 years or more. This accounting change has contributed to the U.S. budget surplus.
Infrastructure Expert: William J. Mallett, Ph.D. updated by Hazel Henderson.