| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : US Economy Last Updated: Nov 5, 2013 - 7:06 AM

Gross capital investment by US public sector at lowest since 1947
By Michael Hennigan, Finfacts founder and editor
Nov 4, 2013 - 7:48 AM

Email this article
 Printer friendly page
US Urban Land Institute/ Ernst & Young report [pdf]

Gross capital investment by the US public sector has dropped to just 3.6% of US economic output, the lowest since 1947, compared with a postwar average of 5%, according to figures compiled by the Financial Times, as austerity bites in the world’s largest economy.

With an impasse on entitlement reform in areas such as social security and health, the Republican Party has been successful in reducing investment spending that is in effect an investment for the future.

Both the Democrats and Republicans have kept the federal gasoline tax that is used to maintain the roads network, unchanged since 1993.

The New York Times said last February that the gasoline tax, 18.4 cents a gallon, has been essentially stable since 1993; in inflation-adjusted terms, it’s fallen by 40% since then.

Instead of penalising gasoline use, however, "the Obama administration chose a familiar and politically easier path: raising fuel-efficiency standards for cars and light trucks. The White House said last year that the gas savings would be comparable to lowering the price of gasoline by $1 a gallon by 2025. But it will have no effect on the 230m passenger vehicles now on the road."

The American Society of Civil Engineers said earlier this year:

Once every four years, America’s civil engineers provide a comprehensive assessment of the nation’s major infrastructure categories in ASCE’s Report Card for America’s Infrastructure (Report Card). Using a simple A to F school report card format, the Report Card provides a comprehensive assessment of current infrastructure conditions and needs, both assigning grades and making recommendations for how to raise the grades. An Advisory Council of ASCE members assigns the grades according to the following eight criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation. Since 1998, the grades have been near failing, averaging only Ds, due to delayed maintenance and underinvestment across most categories."

President Obama said last March:

While our national infrastructure got its best grade in 15 years from the American Society of Civil Engineers' annual report card in 2013, that grade is now a D+ instead of a D. We don’t have to accept that for America -- we can do better. And in a time of tight budgets, we can do it in a way that makes sure taxpayer dollars are spent wisely. Additionally, there are few more important things we can do to create jobs right now, and strengthen our economy than to put people back to work rebuilding America – our roads, bridges, schools, and ports.

In his 2013 State of the Union address, President Obama announced a three-part plan to encourage private investment in American infrastructure that will make our roads, bridges, and ports safer, give our businesses and workers the tools to compete successfully in the global economy, and create thousands of much-needed jobs in cities and towns across the country."

Jason Furman, chairman of President Obama’s council of economic advisers told the FT:

New authority for federal investment in the 2012 fiscal year was $475bn; you look at our proposal for 2014 and it’s $624.8bn. We are proposing a very large increase and that’s because the country is not investing enough in its infrastructure and it’s not investing enough in R&D.”

In recent years the OECD’s (Organization for Economic Cooperation and Development) International Transport Forum, has said that the US spends considerably less than Europe on maintaining its roads network. In 2006 America spent more than twice as much per person as Britain on new construction; but Britain spent 23% more per person maintaining its roads.

One in every five US bridges is classified as “structurally deficient”, requiring significant maintenance, repair or replacement.

The number of miles travelled by cars and trucks has doubled in the past 25 years, but highway lane miles have increased by only 4.4%. Demand for electricity has jumped by about one-quarter but the construction of new transmission facilities has dropped by 30%. The US now ranks 23rd for overall infrastructure quality, according to a World Economic Forum study.

America’s dependence on its cars is reinforced by a shortage of alternative forms of transport. Europe’s large economies and Japan routinely spend more than America on rail investments, in absolute not just relative terms, despite much smaller populations and land areas.

The Economist said in 2011 that the cost of car ownership in Germany is 50% higher than it is in America, thanks to higher taxes on cars and petrol and higher fees on drivers’ licences. The result is a more sustainably funded transport system. In 2006 German road fees brought in 2.6 times the money spent building and maintaining roads. American road taxes collected at the federal, state and local level covered just 72% of the money spent on highways that year, according to the Brookings Institution, a think-tank.

The Carnegie Endowment said in a report that the United States is one of only a handful of countries in the world where revenues raised to support the federal transportation system do not cover costs. Revenues represent just 62% of federal surface transportation expenditures, while all other members of the OECD group of  34 mainly developed economies, more than cover 100% of their transportation expenditures through user taxes - - and sometimes several times over.

The report also says that oil represents 94% of transportation fuels and transportation is responsible for nearly 75% US oil consumption.

American Society of Civil Engineers (ASCE) estimate in a report (brief registration) that in order to bring the nation’s surface transportation infrastructure up to tolerable levels, policymakers would need to invest approximately $1.7trn between now and 2020 in the nation’s highways and transit systems.  The US is currently on track to spend a portion of that - - $877bn - - during the same timeframe. The infrastructure funding gap equals $846bn over 9 years or $94bn per year.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

US Economy
Latest Headlines
US jobs rose by 215,000 in July; Unemployment rate stable at 5.3%
US economy grew at weak pace in Q2 2015 - Worst expansion since 1945
Decoupling of per capita GDP, productivity, private employment, and median family income in America
US economy stumbles again in 2015
Income gap highest in 30 years; No inequality rise in best-paying US firms
Fed minutes raise doubts about fragility of US recovery
Senate Democrats block trade deal authority for Obama
Five firms held 25% of top US non-financial companies cash pile in 2014
US added 223,000 jobs in April; Broad jobless rate at 10.8%
Investment struggles as dividends/ share buybacks at top US firms to exceed $1tn in 2015
US economic growth plunged in Q1 2015
Why the Fed may (almost) never raise interest rates
US jobless rate falls to 5.5%; Broad rate at 11%; Participation rate at 1978 level
US added 257,000 jobs in January; Broad jobless rate at 11.3%
US economy will soon see best years in a decade
US annualised GDP slowed sharply in final quarter 2014
US budget deficit to fall to 2.6% of GDP in 2015
US added 252,000 jobs in December; Jobless rate falls to 5.6%
US adds 321,000 jobs in November; Private sector adds 10.9m jobs in 57 months of growth
US manufacturing slowed in November
US retail spending over Thanksgiving weekend fell 11%
US consumer spending weak in October; Business investment fell again
US third-quarter GDP revised up to 3.9% annualised rate
After destroying banking secrecy US helps Swiss exporters
US oil imports from OPEC cartel at 30-year low
Tax-inverted "Irish" firm Actavis agrees to buy US Botox maker Allergan
US nonfarm payroll employment rose 214,000 in October' Jobless @ 6-year low
Swiss bankers await fallout of US tax evasion acquittal
Two PMI reports give contrasting trends on US manufacturing
US GDP increased at annualised 3.5% in third quarter of 2014
US city home price growth slowed again in August; Consumer confidence rebounded in September
US new orders for manufactured durable goods fell again in September
Loans to buy US shares at record highs
Global markets slide; US industrial production best in 3 years & jobless claims in 14-year low
US federal budget deficit dips to 2.9% of GDP in fiscal year 2014
US added 248,000 jobs in September; Jobless rate falls to 5.9%
US set to become world’s leading liquid petroleum producer again
Obama issues new rules to combat tax inversions
US Securities and Exchange Commission to pay $30m award to foreign whistleblower
Typical American household income in 2013 was below the 1989 level