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Please Debate America's Sorry Infrastructure

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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The big presidential debate is tonight, and expectations are that lots of people will be watching. One of the key issues -- remember those? -- facing the U.S. is the abysmal state of infrastructure. It would be nice to learn more from each candidate what they would do as president to restore the state of U.S. infrastructure to its former greatness.  I'd like to be optimistic.

The problems with U.S. infrastructure have been a pet peeve of mine for a long time. It is one of those things that is important economically, is well understood academically and is supported by the public across party lines. I have been discussing it in print since the financial crisis ended

The U.S. was a leader in infrastructure expansion in the 20th century, and other nations copied that success; in the 21st century, the U.S. has fallen behind. Infrastructure runs into needless hurdles in our abysmal Congress -- the place where good ideas go to die.
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Because of interest rates that are near record lows, it has never been less expensive to fund major projects. And there has never been a more compelling time or a greater urgency, since there is a more-than-50 percent chance that the Federal Reserve will raise rates in December.

What infrastructure investments would yield the greatest returns in terms of economic growth, efficiency, safety, security and quality of life? It is an target-rich environment. Here are some areas, in no particular order:

Electrical grid: The past decade of blackouts and brownouts, plus vulnerability to storms like Sandy, has demonstrated that the nation’s electrical grid is aging and frail. Not only that, it is vulnerable to foreign cyberattacks. It needs a major overhaul.

We also should encourage investment in alternative energy and the resale of power back to the grid. Some local utilities in states such as Arizona and Nevada have been successfully thwarting this.

Roads, bridges, tunnels: The northern half of the country has taken a weather beating the past few years, as hotter summers and colder winters have wreaked havoc on the U.S.'s basic ground transportation system. The easiest way to fund repairs is to raise the gasoline tax, a near impossibility given how many legislators have signed an ill-considered pledge to never raise taxes of any kind, ever.

Autonomous vehicles and smart roads: Now would be a good time to consider the infrastructure improvements that would help self-driving vehicles deal with the sorts of issues that limit their ability to handle inclement weather, lane closings and detours. We can embed navigation aids, create more readable lane markers and develop and/or deploy other technologies that will ensure U.S. roads can handle the millions of autonomous vehicles that we all know are coming. This can increase both vehicle volume and safety. Our outmoded traffic signals could also use an upgrade.

Airports: As my Bloomberg View colleague Matthew A. Winkler noted earlier this month, Colorado's decision 27 years ago to spend more than $2 billion on a new Denver airport has been a boon for the metro area and the state. It not only fostered growth, but helped the state economy diversify from its dependence on resource extraction. Much of the rest of the country could use similar investment in air transport.  

Ports: There are two aspects that require work: The first is the need for deeper channels, higher bridges and bigger docks to accommodate the largest container ships. But more inconceivable than that is the simple fact that the U.S. has still failed to commit the resources needed to make U.S. ports secure against terror, including dirty bombs and biological weapons. If an attack happens, it will be cold comfort to know that the deficit was that much smaller.

These are not make-work government boondoggles; they are investments that would provide the foundation for future economic growth. Like the Interstate Highway System -- a bipartisan project started in the 1950s that has paid for itself many times over -- these are public-works programs that will help propel the country out of the current slow-growth recovery. If ever there was a time for an infrastructure upgrade, this is it.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Barry Ritholtz at britholtz3@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net