The Other Deficit
We’ve heard less about the deficit in recent days, as the nation’s attention has turned back toward the indecent lack of jobs. That’s a good thing. Questions of the debt and deficit are important ones we must address as a nation. But the debate we held this summer was about simple alarmism and artificial panic, and neither of those do us any good, nor bring us closer to resolution on the question of our finances. Rather, there’s another important deficit that received far too little attention in all of the summer’s fervor over the debt ceiling, one that is both more immediate and potentially far more helpful.
I’m speaking about our nation’s infrastructure deficit. The general problem is simple: We have not, over the past half-century, engaged in ambitious public works projects as we once did. The examples are myriad; a few of them will serve to illustrate the general trend. The US lags behind the developed world in high-speed rail, with only one extant line, and a slow one at that. As New York Times columnist Thomas Friedman never tires of pointing out, American airports are outdated in comparison to their Chinese counterparts. Of the US’s more than six hundred thousand bridges, nearly a quarter are structurally deficient or functionally obsolete. If you’d prefer a twenty-first century metric, the US ranks thirty-first in average internet speed, despite the US having itself developed the internet less than thirty years ago. Each of these problems, and dozens more, are resolvable—not questions of technology we don’t have or labor we lack, but of the misallocation of our resources. And each of these problems imposes costs both on the economy and the quality of life of ordinary Americans.
That’s the US infrastructure deficit. It doesn’t have a single, massive number describing it. But when we compare it to the fiscal deficit, it’s clear that the infrastructure deficit is in many ways the more important one.
First, the infrastructure deficit bears a direct relationship to your quality of life, while the fiscal deficit does not. The fiscal deficit does have meaningful consequences on the long-term economic health of the nation. (Though there is little consensus just what those consequences are, and when they can be expected to emerge). The infrastructure deficit has consequences on the quality of life today. Whether you can drink from your tap; whether you can drive to work safely or not; whether your electricity is cheap or expensive. It also has long-term economic consequences. Businesses that can rely on roads in good condition to connect them to workers and consumers are likely to grow. Businesses must have access to affordable, reliable power and Internet to modernize and expand.
Second, the infrastructure deficit has a fairly constant “rate of interest,” while the fiscal deficit’s rate of interest is highly variable—and quite low. Bridges, of course, are not built with a depreciation rate stamped on their side. But nevertheless they degrade, in good economic times as well as bad. The dropping of the Dow does not stop tree roots from pushing their way up through roads or prevent pipes from rusting. A poor economy can reduce the wear on infrastructure somewhat, but only slightly. And the population of the US continues to grow and demand more and more modern infrastructure. Right now the interest rate on the fiscal deficit is near zero. Borrowing money is very cheap. (The T-bill interest rate in September was a staggering 0.093 percent!) The borrowed time that our patchwork infrastructure relies on is not. It will cost us more every day; it is the clear priority.
Finally, addressing the infrastructure deficit can help the economy, while addressing the fiscal deficit can only hurt it. Building bridges hires the unemployed. It gets them off the welfare roles and starts them spending again. It raises wages by giving workers greater leverage, because they have other job options. It bails out underwater mortgages and other debt. It stimulates demand. Austerity measures—that is, cutting government services or increasing taxes—the only two ways to bring down the fiscal deficit, have none of those benefits. Instead, austerity takes money out of the economy. When we’re in troubled economic times, fighting the infrastructure deficit can help pull us out. Fighting the fiscal deficit only digs us deeper.
The most important deficit in America today is the one we’re not talking about. But unless we do, we’ll face increasing expense maintaining our standards of living and slower economic development.
Louis R. Evans ’13, a Crimson editorial writer, is a social studies concentrator in Currier House.