This is an image that was first highlighted by Professor Vaklav Smil, a professor at the University of Manitoba (in Winnipeg, Canada). The world-renowned expert, in particular, is considered one of the most relevant on key issues related to energy (see Energy at the crossroads: global views and uncertainties And Global disasters and trends, the next fifty years), Especially described by Bill Gates as his favorite writer, but not yet translated into French!
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In his work Creating the Modern World: Materials and Dematerialization, In three years – from 2011 to 2013 – China used 50% more concrete than the United States … throughout the twentieth century. As China produces more concrete each year than any other part of the world, this trend is unlikely to change, especially as San Francisco’s Golden Gate Bridge, which is twenty times more dedicated to erecting massive structures such as the Hong Kong-Zhuhai-Macau Bridge, required 1.08 million cubic meters of cement to build.
The gap says the United States has had decades of slow-moving investment to renovate its aging infrastructure, thanks to a $ 2.250 billion budget. Stephen Monier, Investment Director, Lombard Audio, explains that this is a unique opportunity for investors to invest in this significant initiative.
Many neglected infrastructure
The post-epidemic economic recovery is an opportunity to revamp infrastructure, which has been dormant since the Great Depression of 2008-2009. The U.S. Employment Program, proposed by the Biden administration on March 31, aims to transform U.S. public investment over the decades, thereby laying the economy on a stable foundation for the future. The project demonstrates that the United States ranks 13th in the world for the quality of its infrastructure. Over the past sixty years, U.S. federal government spending on infrastructure has fallen by more than half as a percentage of GDP, from 3.8% in the 1960s to 1.6% in the last decade.
Massive civil engineering projects – especially during the Roosevelt New Testament – that took place in the last century need to be strengthened, replaced or recycled. Last month, the American Society of Civil Engineers (ASCE) released its latest three-year report on the country’s infrastructure. Going through this document, the poor condition of dams, roads, roads, schools, public transport systems, hazardous waste management systems, air transport infrastructure etc. Explicit.
Dirty roads, railways and dams
Some examples: Between 2015 and 2020, the United States derailed 30 kilometers of railroad tracks (several hundred trains derailed each year, most of the time without extreme luck). 46,154 bridges, 7.5% of the total, show structural defects. At current rates, it takes 40 years to repair them … except for that time the park will continue to deteriorate, with 42% of all bridges in the country already 50 years old and over. An average of one leak occurs every two minutes in a waterway, resulting in the loss of drinking water equivalent to 9,000 municipal swimming pools each day. The rate of dams at high risk of accident has increased and now more than 2,300 structures are of concern.
ASCE estimates the investment required to repair the slowdown is $ 2.390 billion over the next decade.
Today half of the total cost of the U.S. project goes to repairing roads and railroads and upgrading water pipes and airports. $ 620 billion is to be spent on the transportation network, including recharging electric vehicles and establishing global access to high-speed Internet.
Small inflation risk
Stephen Monier believes spending will spread over many years, which will reduce their inflationary impact. Not to mention the unforeseen difficulties of stopping large infrastructure projects in general (“Big Dick”, road tunnel in Boston, Massachusetts: Discourse: These works were first approved in 1982 and, with a budget of $ 2, $ 6 billion, lasted almost six times longer than expected Much).
For the U.S. administration, the revitalization of infrastructure will have the added benefit of creating jobs. U.S. unemployment fell to 6% earlier this month after the epidemic rose to nearly 15%. But this ratio is still far from the level, The lowest in 50 years, recorded in 2019. In fact, there are still more than 10 million more unemployed than before the epidemic, which strengthens the argument in favor of counter-cyclical infrastructure spending for the economy. The Federal Reserve, for its part, has said it will measure the strength of the economy by looking at long-term employment trends and looking only at average inflation levels.
An agreement is found in Congress
This envelope should win the support of Joe Biden’s political opponents in Congress, Stephen Monier recalled, referring to “some compromises”. “We expect a close end to the original plans in the third quarter of this year. Spending is gaining some support among Republicans because the infrastructure plan has already been designed under the administration of Trump. The mistakes made ten years ago, the economic impact of the epidemic and the competition with China in the wake of the financial crisis combined with the desire to avoid politics. It could help the political process, “he said.