Four graphs showing a nation in decline. An unnecessary and easily fixed decline.

Larry Kummer, Editor

13 years ago

Summary: We mock China for their over investment in infrastructure. Gleaming new factories, high-speed trains, subways. Foolish ants. Exceptional America does it better. As a third in this series, we look at some pictures of how much America invests in itself. These are snapshots, not a comprehensive assessment. Still, they tell a chilling story. We can fix this; it takes only our wisdom and will to do so. Probably new leaders, too.

“In a field one summer’s day a Grasshopper hopped about, chirping and singing. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest. …”

Contents

Corporate profitability
Business Investment
Government Investment
Government investment in infrastructure
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These graphs show totals as a per cent of GDP. All of the investment graphs show declines.
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(1) Corporate Profits After Tax (without IVA and CC Adjustments)

The growth and level of US corporate profits are exceptional. What did the CEOs’ cut to produce these profits? Among other things, wages and investment. It’s the sort of short-term thinking that has come to characterize American business. It produces a lavish bloom of profits, but long-term decay for America.

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(2) Net domestic investment by domestic businesses

This does not include overseas investment by US businesses.

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(3) Net domestic investment by Government

A nation works only as well as its public infrastructure. Let’s hope elves come to fix ours tonight.

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(4) Infrastructure spending: Gross nondefense Federal investment on structures

We’re still living off the infrastructure investments of the 1930s and 1955-1970 eras. Visitors to America often remark about our decrepit third-world-like infrastructure. The recession provided an opportunity to fix that, borrowing at low rates to inexpensively rebuild infrastructure using unemployed workers. We blew it, investing instead in war (e.g, the F-13, conflicts in Iraq and Afghanistan and a dozen other places).