The USA should be the wealthiest country in the world. But the reality for most Americans is very different – the last 50 years of economic prosperity has somehow passed us by.

The answer to “somehow” is that car infrastructure is 2X-3X more expensive to maintain than any other modern transportation alternative, and we have compounded that expense for over 50 years.

Education and Healthcare

We often hear that education and healthcare are more expensive here than in other countries, but I’ve rarely heard a reason as to why. A great researcher, Ashton from the Black Forest Family has done a brilliant comparison of two similar universities, one in the US and one in Germany, where she found that the budget of the US university was 3X the budget of the German university even though they have similar enrollment sizes.

In short, it costs 3X as much to educate a student at an American university than it does at a German university, with no apparent reason why – these are public universities with no profit motive. Healthcare has a similar problem, although since much of healthcare in the USA is for-profit, it has a more obvious boogeyman to blame.

Why are these two industries specifically more expensive? The answer is that they’re both labor-intensive. Education and healthcare require huge staffs of personnel with many college and hospital campuses being veritable cities.

And here in the USA those employees need cars to get to work. Multiply the number of employees by the cost of a car per year, and suddenly the much-larger budgets start to make sense.

Cars are a National Expense

The other leg of this analysis comes from the brilliant Capital in the 21st Century which does a great job of defining “national capital” – i.e. the total amount of private and public wealth within a country. I love this concept because transportation systems are effectively national assets (railroad ownership be damned).

According to the US Dept of Transportation, the average household spent 16% of their budget on transportation, which in the USA means cars. By contrast Germans spend about 12% of their household budget on transportation, and in Japan that percentage is around 10%. Here’s a similar estimate from the US DoT for the US, UK, and Japan.

Since these are averages, they sum up nicely to become national numbers and we can see that the USA as a county is spending more on transportation than any other country.

To put this into the language of capital, the USA is spending a larger percentage of it’s national income on transportation than any other country. And that’s just for the vehicles.

Compounding expenses

The obvious question is that if we’re spending so much on transportation, why is our infrastructure crumbling?

The answer is that car infrastructure is actually more expensive than the above figures show, since the above figures don’t include the massive private debt burden for cars OR the massive public debt burden for car infrastructure.

Private debt for cars has always been huge but has skyrocketed since 2008 and was 1.4 trillion dollars in 2021 (about 6% of GDP). That’s for vehicles that have a lifespan of around 12 years and which are somehow both “luxury items” and absolutely essential for most Americans.

Public debt for car infrastructure seems to be something of a dirty secret in the civil service world – I’ve explored many city budgets in my studies and every single one has gone to great lengths to hide the cost of road maintenance, but for most cities in the USA it’s a majority of the city debt.

If you consider the national debt plus the combined debts of every state, county, and city in the US, and realize that the majority of that debt has been spent on car infrastructure (most of which is in poor shape), you start to understand the scope of the problem that Strong Towns has been pointing out: the United States of America is functionally broke.

It is likely that as a nation we’ve borrowed more than our annual GDP in order to pay for cars and car infrastructure, and those “investments” will be worn out in a single decade or two. This pattern has been repeating since cars became essential sometime around the 1970s.

Our infrastructure is crumbling because even the massive amounts that we are spending are not enough to keep up with the maintenance. Compound that debt across the last 50 years and it’s obvious that we’ve wasted generations of wealth on automobiles.

I’m a ray of f*cking sunshine

Most Americans won’t believe me. Often I feel like Bill James in the early days of Sabermetrics, except that baseball doesn’t usually kill people or bankrupt entire countries.

There are genuine sparks of hope and as always I’m standing on the shoulder of giants. The War on Cars and Not Just Bikes are doing amazing educational work. Writers like Jessie Singer and Donald Shoup have groundbreaking books about the problems caused by cars. Strong Towns is helping cities make positive changes that will help us get out of the debt cycle we’re stuck in.

We cannot continue to bankrupt ourselves to pay for these cars and roads.