Inflation in the United States now stands at its highest level since 1982, reaching an 8.3 percent annual rate in April 2022 and peaking well into the double digits in fast-growing metro areas like Phoenix. Opinion polls show rapidly rising prices as Americans’ Number One concern and a central challenge to Joe Biden’s presidency, which he acknowledged in a White House speech this week. “I know that families all across America are hurting because of inflation,” Biden said.
Less appreciated is how inflation is undermining Biden’s $1 trillion infrastructure law. The problem is that $1 trillion today doesn’t go as far as it did yesterday—and it won’t go as far over the next five years of the law’s spending as it does today. Not getting infrastructure projects done efficiently and cost-effectively leads to higher prices down the road, delayed materials, and dearer contracts—and that goes doubly under current inflationary conditions. Before the pandemic, public-sector construction costs in America were already among the highest in the world. They’re about to get worse.
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