State and local investment in transportation, public buildings, water treatment systems, and other forms of vital infrastructure has fallen to a 30-year low. Reversing this decline is key to creating good jobs and promoting full economic recovery -- and it's an especially good time for states to do it, as we explain in a new paper.
Cheap gasoline raises the perennial question over how the U.S. funds its transportation infrastructure -- a key rationale behind Obama's proposed oil tax. And it makes electric vehicles (EVs) and biofuels less competitive on price, hindering U.S. efforts to reduce greenhouse gas emissions and oil consumption. Can the U.S. continue to fund upkeep of its infrastructure and reduce emissions from transportation?
What the economy needs is a massive program of investment in public infrastructure to provide jobs and domestic growth that is relatively insulated from global trends. Such a program could also accelerate an overdue transition to a greener economy. That would require on the order of about half a trillion in outlays a year, some of it financed by higher taxes on the rich and some of it financed by debt. Try to find a mainstream politician calling for that level of public outlay. Look around you at the appalling state of basic public infrastructure. In New York, the a new subway line is literally taking decades because only a little money is available each year. Our coastal water and sewer systems are sitting ducks for the next surge of sea level rise. Basic roads, bridges, tunnels and electrical systems have deferred maintenance bills stretching into the trillions. Our internet access systems are technically behind those of most of Europe and some in the Third World -- and far more costly to consumers. And don't get me started on Amtrak.