Credit: Getty Images
By Sheila Bair
July 8, 2013

So I was returning from a trip to China recently via Beijing’s modern airport. Unfortunately, my experiences at New York’s J.F.K. were not so pleasant. The plane was delayed because of air-traffic-control backups, I tripped and cut my knee on a broken tile in the terminal, and when I found a restroom to clean up the blood, I was confronted with a doorway blocked by bright yellow tape and the strong aroma of raw sewage. Nor were my experiences going from New York to Washington any better. I missed the train because I had to lug my bag down several broken escalators. Once I finally boarded another, it took 30 minutes for the Wi-Fi to connect. We hit a bad stretch of track, and my iPad went flying. I was late and unprepared for a board meeting (because of my broken iPad). When I finally got home, a storm had knocked out the electricity (again).

Yes, this all really happened. (Well, okay, not all of it on the same trip), but here’s the point: Bad infrastructure costs real time and money. The American Society of Civil Engineers (ASCE) estimates that disruptions caused by infrastructure will amount to $3 trillion in lost GDP by 2020. All those delays, power outages, and banged-up knees add up. It also makes our businesses less competitive globally. The World Economic Forum ranks the U.S. 25th in infrastructure, well behind most of our major competitors.

With government borrowing rates low (courtesy of the Fed) and so many construction workers eager for work, you would think that the federal government would launch major infrastructure programs. Unfortunately, the Fed’s cheap money has been squandered mostly on sugar-high stimulus and paper profits in the stock and bond markets — ephemeral benefits that are fading fast. In contrast, infrastructure programs would have lasting and much-needed benefits for this and future generations. Yet Washington’s bigwigs are providing little leadership on the issue, and they are missing the boat, as government borrowing costs will continue to go up.

Many in the GOP seem to think the government spends too much already and is too incompetent to run major infrastructure programs. But lots of sensible people, including those at the New America Foundation, a leading centrist think tank, have proposed the creation of a National Infrastructure Bank, which would support only projects that were approved by a team of engineers and that could be paid for over time with user fees or dedicated revenues like energy taxes. The proposal would provide nearly half a trillion in infrastructure financing without adding to the long-term deficit. (Some have suggested that this idea isn’t getting traction because it prevents Congress from steering pork to their districts!)

But where are the Democrats? Not only would infrastructure make American business more competitive, but it would also lower unemployment. Studies show that every $1 billion in infrastructure spending can create more than 20,000 new jobs. Health and safety are also at stake. Another bridge fell down recently, in Skagit County, Wash. No one was killed, thank goodness, unlike the 13 lives lost when a Minnesota bridge collapsed in 2007. But ASCE estimates that one in nine bridges in the U.S. are structurally deficient. Water mains burst on average 250,000 times a year. Poor air quality in our aging schools has an adverse impact on students’ and teachers’ health.

Regrettably, the only infrastructure spending Congress seems inclined to authorize is $30 billion to build and man hundreds of miles of fence along our Mexican border. So as China is building modern infrastructure, we are looking to build our own Great Wall, except that we are keeping out farm workers instead of the Mongols.

So as Congress struggles with immigration reform, it should really take a second look at needed infrastructure spending. Because if we keep letting our roads, bridges, and airports deteriorate, in a few decades nobody will want to come here anyway.

Fortune contributor Sheila Bair is former chair of the FDIC and author of New York Times bestseller Bull by the Horns.

This story is from the July 22, 2013 issue of Fortune.

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