Spending on infrastructure has fallen in real terms in America

It is easy to take internet connectivity for granted these days. But when stringing up fibre-optic cable in the woods of Vermont, not much comes easily. Some homes are a mile back from the road, requiring thousands of dollars and much tree-pruning to link them to the network. In remote areas new poles are needed to replace ones that date back to the introduction of electricity. The wait for these can run to two years. The local broadband group responsible for Vermont’s north-east corner brought high-speed internet access to about 2,500 homes in 2023. If not for the delays, it could have reached 7,000.

Bringing broadband to under-served parts of rural America is one element of a giant infrastructure programme that began two years ago when President Joe Biden signed it into law. It was hailed as a historic opportunity to repair America’s bridges, rebuild its roads for electric vehicles and update its power grid and communications technology. With headlines proclaiming its $1.2trn in investments, worth about 5% of GDP, it was easy to get caught up in the excitement. That makes the current state of the big dig all the more disappointing. Instead of the anticipated surge, total infrastructure spending has fallen by more than 10% in real terms since the passage of the law (see chart).