Friday, April 12, 2013

What's an A?

Broken Bridge

The American Society of Civil Engineers (ASCE) has released their annual report card of the state of US infrastructure. The US was rewarded by the organization for the stimulus spending by upping the grade from a D to a D+, while stating that the US needs to spend $3.6 Trillion just to maintain the status quo. It makes America sound like a banana republic filled with bridges that are on the verge of crumbling, roads that are falling into ruin, and that the post-apocalypse future is not as far off as we would guess.

Frankly, that is just not the case.

If you look into your own (metaphorical) backyard, then you can probably see some pot-holes that need to be fixed and other minor infrastructural improvements that you believe ought to be taken care of right away. Everybody is an armchair planner who wants to see their neighborhood taken care of to its utmost peak. 

It is the job of ASCE, as a trade organization, to drum up political support to create as much work as possible for its members. More projects, the better. Worse grades create a call to action, whereas better grades would not. This is why ACSE has never and will never givs the US good marks - despite the fact that the US spends 3.3% of GDP each year on infrastructure, which is more than the OECD average of 3.0%. It is also why ACSE never rates any other countries. Creating a basis of comparison would show how ridiculous their grades are. In other words, they simply do not want you to know that there is no such thing as an A.

The issue is that not all problems are worth solving. A return-on-investment / cost-benefit analysis will quickly show that fixing everything is just not worth the money to do so. There are diminishing marginal returns. Instead, we invest in the infrastructure we do use as opposed to maintaining every road, bridge, and dam that the US every built just for the hell-of-it.

Analogy time: Presidential candidates that try to run 50-state strategies have a tendency to lose to other candidates that only focus on the swing states that matter. Prioritization is necessary.

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