The chart you posted doesn't show declining infrastructure spending. It shows a decline in the percentage of GDP spent on infrastructure by the federal government. I could find nominal dollar figures and it would show an increase over time, but it wouldn't be very meaningful either.
The percentage of GDP spent on infrastructure probably should drop over time, both because you can use the installed base (we don't need to reconstruct the interstate highway system from scratch or build the Hoover Dam again), and because real per capita GDP grows over time. Also infrastructure per person doesn't necessarily have to be at the same level when the population increases, there is a need for more total infrastructure, but often slightly less per person when you have higher populations and higher population densities.
Also not all infrastructure spending is federal, you have state, local, and private spending.
-----------------
"...To be sure, for millions of Americans the state of the nation's public capital infrastructure is of paramount concern. Two congressional commissions' reports and several other studies have inflamed public opinion by fostering the notion of an infrastructure crisis.(1) Proponents of that notion suggest that the nation's infrastructure is crumbling. They point to a decline in the rate of growth of the public-sector capital stock that began in the 1970s. That decline, they argue, caused U.S. productivity growth to stagnate and the nation's standard of living and its international competitiveness to decline. In their view, infrastructure is the nation's "third deficit," a companion to the budget deficit and the international trade deficit; they conclude that increased infrastructure spending is an urgent national priority that will yield high returns.
The evidence suggests, however, that the perception of an infrastructure crisis is the product of two false premises: (1) that spending on public infrastructure has been declining and (2) that the reduction in public capital investment has lowered private-sector productivity.(2) The truth is that there is no shortage of infrastructure funding. Since 1948 the real level of federal capital stock per person (1987 dollars) has remained virtually constant at $1,500. The real capital stock at all levels of government rose from $6,000 per person in 1948 to $10,500 in 1970 and has remained at that level since. The leveling off of infrastructure spending since 1970 is almost entirely attributable to the completion of the interstate highway system and a reduction in spending on school construction as the percentage of the population that is of school age has declined.
Studies that purport to show the economic benefits of increased spending on infrastructure have distorted the role of public capital formation and its contribution to private- sector performance. The level of infrastructure spending has been more a consequence than a cause of economic growth in the United States.
Infrastructure is often narrowly defined to include highways, mass transit and rail systems, aviation facilities, and water supply and wastewater treatment facilities.(3) That practice is followed here because proponents of the infrastructure-crisis view use such measures. More realistically, however, infrastructure includes the relatively large physical capital facilities that are fundamental to the organization of communities and their economic development along with the communities' organizational, informational, and technological frameworks. Hence, infrastructure includes education systems; public health systems; water treatment and distribution systems; garbage and sewage collection, treatment, and disposal systems; public safety, legal, and corrections systems, including fire and police protection and communications systems as well as utilities and transportation systems.(4)
In a highly developed market economy like that of the United States, much of the infrastructure is privately provided and managed. Most electric and gas utilities in the United States are privately held ventures as are the telephone and cable companies, the airlines, and thousands of private schools and colleges. In fact, local governments have recently begun increasing private-sector involvement in infrastructure by mandating that to obtain necessary government approvals for development, real estate developers provide public water and sewer structures; mains and hookups; and streets, sidewalks, street lighting, highway access, and overpasses.(5)..."
cato.org |
