The Failure of American Governance in 1 Depressing Chart

Infrastructure spending has fallen about 25 percent, after inflation, the past 5 years.
More
Reuters

Here are three facts to consider.

First, infrastructure spending has a higher bang for the buck than just about any other kind of spending. The San Francisco Fed, for one, estimates that every $1 of highway spending raises GDP by $2. Second, even if you don't believe in multipliers, infrastructure spending is something we have to do eventually—so we'd save money if we do it when interest rates are low. Third, investors are paying us 0.43 percent after inflation to borrow for 5 years.

Now look at the chart below, via Cardiff Garcia of FT Alphaville, of inflation-adjusted infrastructure spending in the U.S. the past decade. Weeping is optional.

This is what a disastrous policy error looks like. There wasn't enough infrastructure spending in the stimulus, and there really hasn't been enough since the stimulus ended—and since austerity-obsessed Republicans took over the House. President Obama has, of course, called for modestly more infrastructure spending now, but that's been a political non-starter.

This isn't even penny-wise and pound foolish. It's just foolish.

Jump to comments
Presented by

Matthew O'Brien

Matthew O'Brien is a former senior associate editor at The Atlantic.

Get Today's Top Stories in Your Inbox (preview)

Why Are Americans So Bad at Saving Money?

The US is particularly miserable at putting aside money for the future. Should we blame our paychecks or our psychology?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In