Looking back: ASCE "Revises" Report
Chuck Marohn is on vacation right now but, in light of the new American Society of Civil Engineers (ASCE) Infrastructure Report Card that was just released, we're re-running some past content reflecting on a previous infrastructure report card. Same old, same old. Next week, Chuck will dig into the new report, but for now, read Monday's summary and analysis of the 2011 report and then check out today's follow-up below, in light of a "revision" issued by the ASCE. No surprises here: The revision just makes things more confusing and ridiculous. -Rachel Quednau
The cover of the ASCE report.
Recently we wrote about the ridiculous piece of propaganda issued by the American Society of Civil Engineers (ASCE) and dutifully circulated by the media. The report, "Failure to Act," was designed to paint a negative picture of America's future if we did not pony up trillions for engineers to build and maintain infrastructure. The central argument was that continued decline of our infrastructure systems would cost us $1 trillion over the next decade. To avoid this calamity, according to ASCE, would cost us a mere $2.2 trillion. This is modern engineer-logic, where spending $2.2 trillion to save $1 trillion is just plain common sense.
Interestingly, ASCE then issued a statement clarifying its report. According to Brian T. Pallasch, ASCE's Managing Director of Government Relations & Infrastructure Initiatives:
ASCE is revising figures reported in the release of its recent study on the economic impact of underinvestment in transportation infrastructure. The original report dramatically underreported the negative effect of Americans’ personal income due to failing transportation infrastructure. The report shows a clear and rapidly-expanding negative impact on Americans’ pocketbooks in both the near and long term, and a dramatically accelerating negative effect on GDP in the near- and long-term. Our original release projected that Americans’ personal income would drop by $930 billion by 2020 but recover slightly in 2040. The data clearly show that the effects will be dramatically more negative, with $3.1 trillion in personal income losses by 2040. The negative effects on American GDP will also expand dramatically over time, with a near-term loss of $897 billion and a near-tripling of that loss to $2.6 trillion by 2040.
Ostensibly they want to be taken seriously.
Let's focus on the revised GDP number of $2.6 trillion by 2040. Recently, we talked about budget projections in our piece, "Downgraded." We showed how the Federal government is using overly-optimistic projections of GDP growth and how just slight changes downward in those projections would mean trillions in lost GDP. In fact, a minor drop in the growth rate from 4% to 3% would cut $2 trillion out of the GDP by 2020.
Sometimes when you are throwing around a trillion here and a trillion there, it all gets kind of lost in translation. So, to clarify this, I've started with the 2010 GDP of $14.7 trillion and projected out three different growth rates through 2040, ASCE's study window. I then compared that to ASCE's projection for cumulative lost GDP. When you bring these projections out to 2040, here's what it looks like:
This illuminates the absurdity. Even in the scariest scenario envisioned by ASCE's report, GDP loss amounts to a fraction of the estimation error between the different assumed rates of growth. When you get to 2040, the $2.6 trillion in cumulative loss pales in comparison to missing the overall growth rate in the projection by just 1%. This is statistic silliness.
This also shows how ridiculous 30-year projections are. Do we really have a clue as to what our economy is going to look like in 30 years? In a past article, I looked back to 1981 in an attempt to point out how much change has taken place in the last 30 years. The hubris involved in making a projection like this, with the precision they offer, is laughable.
Just for the mental exercise, let's take ASCE at their word and assume we lose $2.6 trillion cumulatively in GDP. Since we tax at roughly 20% of GDP, that would mean the U.S. Treasury would lose out on $540 billion in revenue over the next 30 years. Contrast that with the $6.6 trillion they are suggesting we spend over that same period and you start to get a sense for how backward this logic is.
When I said yesterday that this felt like a cult, this is what I meant. We have collectively believed for so long that spending on infrastructure is the key to prosperity that we don't even bother to check if it really is. ASCE even checked their own numbers. They simply looked at the estimates for lost GDP, etc... and said, "That sounds pretty bad." Then they looked at their projection for how much money they and their allies wanted to shoot for in the appropriation and said, "That sounds right."
They are all so brazen they didn't even bother to notice that the amount they wanted to see spent was more than the amount they claimed we would lose!
Or did they notice but thought we would be too stupid to figure it out? If that's the case, it worked. I've searched all over the news and can't find a single story or blog post that did anything but parrot this report's findings. Just like in a cult, nobody questions this stuff.
You'll note ASCE never took the annual transportation appropriation they were calling for and ran that dollar amount out to 2040. That would not have been good propaganda.
ASCE's report is an embarrassment to the engineering profession. This revision merely adds insult to injury.
Charles Marohn (known as “Chuck” to friends and colleagues) is the founder and president of Strong Towns and the bestselling author of “Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis.” With decades of experience as a land use planner and civil engineer, Marohn is on a mission to help cities and towns become stronger and more prosperous. He spreads the Strong Towns message through in-person presentations, the Strong Towns Podcast, and his books and articles. In recognition of his efforts and impact, Planetizen named him one of the 15 Most Influential Urbanists of all time in 2017 and 2023.