Stop Bleating About Crumbling Infrastructure

The Amtrak tragedy has predictably elicited another round of jawing about the allegedly "disgraceful" condition of America’s "infrastructure". If Washington only had the courage to spend and borrow itself silly—-why the nation could leap out of its growth and jobs rut in a single bound. Or so goes the claim of mainstream politicians and pundits.

A recent jeremiad by one Philip K. Howard is par for the course. The latter is a lawyer and founder of a lobby group sporting a name—"Common Good"—–which itself is reason in itself to be wary.

But almost every category of U.S. infrastructure is in a dangerous or obsolete state — roads and bridges, power generation and transmission, water treatment and delivery, ports and air traffic control. There is no partisan divide on what is needed: a national initiative to modernize our 50- to 100-year-old infrastructure. The upside is as rosy as the status quo is dire. The United States can enhance its competitiveness, achieve a greener footprint and create upward of 2 million jobs.

That entire paragraph is pure hogwash. The overwhelming share of the nation’s infrastructure is not obsolete or dangerous; is not being starved for dollars; and has virtually nothing to do with the dramatic trend-line of decline in main street growth, investment, good jobs and real living standards.

In the above quoted passage, Howard attempts to throw in everything but the kitchen sink in his list of purportedly crumbling infrastructure, but that’s a ruse to deflect from the giant flaw at the center of the case. Namely, 98% of US infrastructure is either the responsibility of the private business system or state and local government.

Arguably, the only thing that Washington has any business being involved with is the interstate highway system. But the latter is generally in excellent shape along most of its current 47,000 miles of surface. In fact, it was the recipient of a huge dollop of largesse compliments of the $800 billion Obama stimulus, but most of these billions were wasted on pre-mature resurfacing of highways that didn’t need it and low priority interchanges. There were simply few "shovel ready" and necessary projects to fund.

In any event, the interstate highway system could be more than adequate maintained for $30 billion per year. That’s partly because its only a small piece of the highway pie, accounting for only 1.1% of the 4 million miles of streets, roads and highways in the entire nation. Indeed, the reason we have 89,000 units of state, county, municipal and township government in the US is precisely to take care of the 99% of road surfaces that the great Dwight D. Eisenhower said should remain a non-Federal responsibility—-even as he pioneered the Interstate highway system and trust fund.

The unheralded truth, in fact, is the current gas tax generates more than enough to fund the interstate system—–that is, before 70% of the incoming trust fund dollars are dissipated on mass transit, bike paths, beautification, and state and local highways which should be funded by local users or taxpayers.

So if the interstate highway system could be maintained in high style for 0.17% of GDP, where’s the beef?

It’s certainly not in what Phillips identified as the  "the power generation and transmission" sector. In fact, national investment spending has been running in the $90-100 billion range annually for the last half-decade—-or more than double the level of the early 2000s. Even after accounting for a 20% rise in the GDP deflator over the last 10 years, current investment in the utility sector is up by 80% from its 2004 level.

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