I’m a licensed civil engineer. As an undergrad at the University of Minnesota, I was offered the opportunity to join the American Society of Civil Engineers (ASCE) at a student membership rate of $25. My class was told that getting into the ASCE as a student was an easier way to join what otherwise was an exclusive professional organization. The impression I was left with was that this was an organization I needed to be in to advance my career and that I might not get another chance. I gave them my $25.
That was the first and last time I ever pondered giving the ASCE my money. Fool me once….
The ASCE recently issued a report titled Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future. It’s an update of a prior series of reports that we’ve discussed extensively here. I’m going to take some time this week to put the latest report in context. I’m also going to take a critical look at the media coverage of it, along with the pronouncement of economists, and their shared role in what I’ve called an “Infrastructure Cult.” I’m also going to look at what an organization of civil engineers should be doing in response to what is clearly a set of critical challenges.
“We are not maintaining our infrastructure because we have overbuilt — we’ve built too much infrastructure — and, consequently, we have failed to make productive use of those investments.”
To begin with, some common ground: American infrastructure is not being maintained. This is a critical threat to our future prosperity, one that grows more dire each day. The sooner we begin to address this problem, the less painful the subsequent actions will be. On this concept, Strong Towns and the ASCE are on the same page. Where we dramatically depart is both our evaluation of the cause of this crisis as well as our recommendation for what must be done.
Let’s start with the cause. The ASCE would have us believe that we’re failing to act by not spending enough on infrastructure. This is false. We are not maintaining our infrastructure because we have overbuilt — we’ve built too much infrastructure — and, consequently, we have failed to make productive use of those investments.
Infrastructure spending is supposed to generate wealth for us. Theoretically, we spend a dollar on infrastructure and it not only creates a dollar in tax revenue to pay for that investment but it creates an additional dollar for the fire department, a dollar for the police department, fifty cents for parks and some spare change for running city hall. And as long as we maintain the infrastructure, it’s supposed to generate this wealth over and over and over. This is how it’s supposed to work.
“Our infrastructure approach is destroying our wealth, not enhancing it.”
The way it actually works is that we spend a dollar on infrastructure and then, during the life of that infrastructure, we recoup a fraction of that dollar back. Then we are burdened with maintenance costs. Our infrastructure approach is destroying our wealth, not enhancing it.
This can be demonstrated with the ASCE’s own numbers. On page 11 of the report they suggest that Gross Domestic Product (GDP) between 2016 and 2025 will under-perform by $3.955 trillion (their absurd level of precision, not mine) because we aren’t investing enough in infrastructure. That means the federal government, which last year took in 18.1% of GDP through taxation, is missing out on $716 billion in tax revenue. According to the ASCE, the federal government need only spend twice that amount — $1.44 trillion — to avoid that loss.
Their numbers through 2040 are just as ridiculous. There you have a $14.201 trillion GDP loss resulting in a $2.6 trillion loss to the federal treasury. We can avoid that $2.6 trillion loss of revenue by spending a mere $5.2 trillion.
And note: the losses they are projecting are vastly inflated which only makes that gap wider. More on that later in the week.
How is any of this possible? How is it possible that we spend a dollar on infrastructure and we don’t get multiple dollars back as we’re led to believe? How is it that infrastructure investments are actually not funding defense and health care and social security and the rest and, in fact, are not even self sustaining? They don’t even pay for themselves, let alone their maintenance?
It’s the second part of that problem statement above: We’ve overbuilt AND we don’t make productive use of our infrastructure investments.
What do we mean by “productive use” of our infrastructure? As you drive home today, take note of how far apart things are from each other. If you walk or bike, you experience this acutely, but for those of you driving, estimate the distance between buildings. Look at the size of the parking lots. Check out the landscaped areas and stormwater ponds. All of these areas are being served by incredibly expensive infrastructure — massively expensive — yet they create no real wealth.
Look at the frontage roads — development along only one side!!!! — and all that land around the interchanges. That stuff costs a fortune. If we were really concerned about making productive use of our infrastructure, if we actually paid for it ourselves instead of — as the ASCE has advocated for my entire professional career — having some remote federal bureaucracy provide the funds, we’d obsess over those gaps. They would not be something we drove by or ignored. We’d have emergency meetings at city hall weekly and daily progress briefings on what was being done. If we paid for them directly, those gaps would be a desperate, all-consuming obsession.
Now look at the buildings. When you’re in a modern commercial area you’re going to see big box stores, strip malls and fast food places. These buildings are designed to last a couple of decades, at most. Compare that to the stuff in the ground. Your tax dollars are responsible for maintaining that infrastructure forever (at least in theory). If you have a chance on your commute, travel through a commercial area that is 20+ years old and witness the cheaper clientele, the closed stores and the weed-infested parking lots. If we obsessed over the productivity of our infrastructure investments, we’d obsess over the resiliency and adaptability of what we build. We’d ensure that it grew in value over time and not be so accepting of the decline we see all around us.
The same goes for our residential areas. Look at how far apart those homes are — this lifestyle is a source of American pride, after all — and consider just how adaptable that three car garage with the attached house topped by eight ridge lines is. Our investments are one life cycle. We’ve built them, we don’t envision them ever changing and our obsession now — for which the ASCE is happy to provide the propaganda — is determining who is going to pay for the bizarre amount of infrastructure needed to serve it all. If we obsessed about making productive use of our infrastructure, if it bothered us even remotely that a typical residential home in a suburb will generate nickels and dimes on the dollar of what is needed to maintain the infrastructure, we wouldn’t tolerate the ASCE and their “Failure to Act” rhetoric.
According to the American Society of Civil Engineers, our failure is in not providing even more money for infrastructure. It’s not enough that, in a city like Lafayette, Louisiana, which we profiled here earlier this year, there are two dollars of public infrastructure investment for every one dollar of private, taxable wealth. What do we need in order to be successful? Three dollars of public infrastructure for each dollar of private wealth? Four? Ten?
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
— Upton Sinclair
The ASCE has identified a symptom of a larger problem: we lack the money to properly service and maintain all of the infrastructure we have built, let alone build more. What the ASCE has failed to realize is how their advocacy on behalf of the engineering profession is at the core of the problem. The more we spend on this approach, the worse things get. The ASCE and the Infrastructure Cult distract us from focusing on the abysmal productivity of our infrastructure investments. We need to obsess over how to make better use of what we’ve already built. We won’t do that– and we’ll compound our problems– if we simply pour trillions more into this failing approach.
To be a civil engineer is to be a servant of society. I didn’t become an engineer so that I could prosper from decline. The ASCE does not represent me. Their proposals serve the narrow interests of their members but don’t represent the ethics of the profession. They should not go unchallenged.
Tomorrow we’ll expose the cheap propaganda of the ASCE report as a way to illuminate the mindless reaction of the Infrastructure Cult (media, economists, and politicians).
(All photos by Johnny Sanphillippo unless otherwise noted.)
This blog entry was originally published here.
The mission of Strong Towns is to support a model of growth that allows America’s cities, towns and neighborhoods to become financially strong and resilient.
The American approach to growth is causing economic stagnation and decline. It has made America’s cities financially insolvent, unable to pay even the maintenance costs of their basic infrastructure. A new approach that accounts for the full cost of growth is needed.