The Investment Deficit in America

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Research Director Eric Lotke discusses the “Investment Deficit” report and the “Real Investment in America” conference.

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America is falling apart. Falling apart, and falling behind.

Previous generations of Americans built interstate highways and transcontinental railroads. Now we sit in traffic.

Americans from an earlier era pioneered universal primary education and chartered great universities on public land. They enacted the G.I. bill to give the greatest generation the access to college that helped build our modern middle class. Nowadays American students toil in overcrowded classrooms with leaky roofs, while the cost of college soars out of reach.

America grew up investing in its land and its people. Historically, we directed roughly 8 percent of our gross domestic product to long-range investments, and the investment paid off. Now we are down below 4 percent. Our post World War II infrastructure is starting to decay, and we aren’t replacing it. We are lamenting the loss of jobs rather than hiring people to renew and rebuild.

Other countries are racing past. China spends 9 percent of its GDP on infrastructure investment and opens a new subway system every year.

From physical infrastructure like roads and bridges to human capital from kindergarten to college, this report comprehensively examines our investment deficit. It documents yesterday’s achievements, today’s problems and tomorrow’s solutions.

As this report is released, America’s economy is in a deep downturn, which is now spreading across the
globe. A major recovery program is essential to lift this economy from what is likely to be the worst
recession since the Great Depression. Direct public investment—in new energy and conservation, in modernizing our infrastructure, in education and training, and research and development—should be the centerpiece of any recovery plan. That is not only necessary to lift the economy in the short run; it is a vital down payment on the sustained public investment that we need to sustain a competitive and decent society in a global
economy.

The needs listed in this report provide a guidepost for both recovery and for long-term, sustainable growth.