Last week The Morning Measure looked at President Obama’s proposed budgets for transportation and energy. Overall those two areas of the budget are increasingly focused on providing more targeted funding going to areas that are expected to reap returns through increased competitiveness in the future (funding for quicker more reliable passenger rail and research in clean energy for example). With economic growth one of the Administration’s primary goals this is a good strategy. A recent report by the McKinsey Global Institute shows that America’s investment in its infrastructure is lagging significantly behind other developed as well as several developing countries and that this lack of investment is hurting U.S. economic competitiveness.
The New York Times recently had a great piece arguing very similar points namely that in the current atmosphere of budget-cut-fever we must be careful not to cut our way to stagnation and complacency. There may be areas that warrant funding cuts but transportation energy and education are certainly not among those areas. From The Times:
“Mr. Obama’s $3.7 trillion budget like his State of the Union address three weeks ago is premised on what you might call the ‘national neglect’ theory of decline. In this view of the world if we fail to invest now in the kinds of things that will enable 21st-century industries to flourish then the United States in 2050 might look like 19th-century Britain or France whose economic dominance bred a kind of self-satisfied apathy while our hungrier forefathers ran around inventing light bulbs and Model T’s and stuff like that.
In order to avert the same fate at the hands of rising economies in India and China Mr. Obama would invest billions now to lay down high-speed rail lines expand the wireless Internet and educate a new generation of entrepreneurs to name a few of his most pressing priorities.”