Opinion

Felix Salmon

A bipartisan proposal for more government spending

By Felix Salmon
November 11, 2011

Now here’s a pair of strange bedfellows: Robert Frank and PJ O’Rourke. They have a bipartisan op-ed in USA Today making the obvious and compelling case for infrastructure investment. Not grand schemes like new high-speed rail lines, but just basic maintenance on which the country has fallen massively behind:

The American Society of Civil Engineershas identified $2.2 trillion worth of repairs needed on bridges, roads, dams, schools and water and sewage systems. And that’s just overdue maintenance, never mind addition or replacement.

Be it stimulus to the good, or deficit to the ill, the case for undertaking these projects immediately is compelling. Postponement is dangerous and expensive. Falling bridges, crumbling roads, bursting dams, moldy schools, contaminated water and leaking sewage are on no one’s agenda for cutting government costs or increasing government benefits.

And to delay infrastructure expenditure is to inflate it. For example, take a badly worn stretch of Interstate 80 in Nevada. The state’s Department of Transportation says fixing it today would cost $6 million, but waiting two years would cause the roadbed to be so degraded by traffic and weather that the price would rise fivefold, to $30 million.

Here’s my question: how did we miss this the first time round?

Here is our proposal: Have Congress create a 12-person bipartisan jury of eminent — or even half-bright — citizens. Give this panel authority to decide which of the American Society of Civil Engineers’ projects should not be begun right away. Greenlight all the rest, and with luck most will get done before the Chinese decide they’re tired of buying our 10-year T-bills at 1.7%. In contrast to the desperately overdue maintenance projects that our proposed committee would identify, the stimulus bill passed in 2009 actually didn’t have all that much infrastructure in it, and a lot of what it did have was new pork projects that were far from shovel-ready.

I have to admit that by now I expected to be able to see the real-world effects of the stimulus spending which began in 2009. But America’s infrastructure is just as crumbling as it’s always been, and the National Infrastructure Bank that I expected to see stood up as part of the 2009 stimulus never came close to being created.

We’re living in a world where the NYT writes long articles about how BNDES, the Brazilian national development bank, is so ambitious and powerful — and overspilling Brazil’s borders — that it’s causing demonstrations in Bolivia. But meanwhile, the USA seems to be incapable of corralling funding for urgently-needed domestic repairs, record-low interest rates notwithstanding.

This is a clear market failure, but one driven by the fact that the costs of infrastructure spending fall on the government, while the benefits accrue to private businesses and individuals. Since the government represents private businesses and individuals, such a set-up makes perfect sense in the rest of the world — we all group together to work on projects which benefit everybody. And America used to be great at this: the interstate highway system, the Tennessee Valley Authority, the Hoover Dam.

Now, however, there’s this bipartisan idea that government spending is a Bad Thing which needs to be cut back. Frank and O’Rourke are a rare example of bipartisan consensus in the other direction. I hope we see more of it. But I’m not holding my breath.

Comments
17 comments so far | RSS Comments RSS

please… no more talks of federally sponsored banks, infrastructure or otherwise. fannie and freddie caused as much, and likely more, damage than any private bank. they were also the largest campaign donors to our corrupt congress (this fact alone boggles the mind). lets get infrastructure spending going, but please forget about another government owned bank.

Posted by dsl80 | Report as abusive
 

please… no more talks of federally sponsored banks, infrastructure or otherwise. fannie and freddie caused as much, and likely more, damage than any private bank. they were also the largest campaign donors to our corrupt congress (this fact alone boggles the mind). lets get infrastructure spending going, but please forget about another government owned bank.

Posted by dsl80 | Report as abusive
 

please… no more talks of federally sponsored banks, infrastructure or otherwise. fannie and freddie caused as much, and likely more, damage than any private bank. they were also the largest campaign donors to our corrupt congress (this fact alone boggles the mind). lets get infrastructure spending going, but please forget about another government owned bank.

Posted by dsl80 | Report as abusive
 

We can also really, really, suck at this. Take the Army Corps of Engineers, for instance.

Posted by absinthe | Report as abusive
 

PJ O’Rourke is only a Republican if your definition of a Republican is someone who is not a Democrat. The Republicans are so controlled by the small tea party minority that they will reject this idea instantly.

There is no “bipartisan idea that government spending is a bad thing”. That view is held by a minority in the Republican party, the majority of which are too cowardly to stand up against it, and the inevitable downward spiral it would bring.

Posted by KenG_CA | Report as abusive
 

“Here’s my question: how did we miss this the first time round?”

Repairs aren’t sexy. They are maintenance, you can’t pretend they represent growth. Hard to buy votes that way.

Better to do something that is entirely useless but LOOKS cutting edge. That’s how you impress voters.

Posted by TFF | Report as abusive
 

I think you should take a look at the origins of the ASCE number, Felix. It’s one of those endlessly-quoted but little-questioned numbers. i could be wrong, and it could be very rigorously calculated, and it is plausible. But there’s a certain built-in bias in the ASCE, no?

Posted by gringcorp | Report as abusive
 

Isn’t it a bit disingenuous to say there’s a “bipartisan consensus” against all government spending. The Republicans only oppose spending when they are in the opposition, and love giving money to their friends and donors when they are in power. The Democrats are not nearly that bad.

Do you really think the infrastructure debate would be going nowhere if the Dems could pass anything in Congress?

The other issue is why all this has to happen on the Federal level. Things like air traffic control need to be upgraded nationally, but roads and HSR and water systems can all be funded and built locally. Look at California, who is moving ahead with its HSR system through a bond issue. If the need is so great, paying the higher interest rates on state bonds is well worth it.

Posted by AngryInCali | Report as abusive
 

Where are those who argued fiscal stimulus couldn’t be done fast enough to bother with? Oh yeah, .. they are in charge.

Posted by MyLord | Report as abusive
 

“Look at California, who is moving ahead with its HSR system through a bond issue.”— uhhh, you may want to google the latest developments on that one.

Posted by TinyOne | Report as abusive
 

You missed half the problem: the GOP will agree to spend on infrastructure but only if we cut spending on the poor, the old and the sick. They treat this as a less than zero sum game; the ending cuts would need to be more than the spending. Can’t rationally deal with people like that.

Posted by jomiku | Report as abusive
 

“The state’s Department of Transportation says fixing it today would cost $6 million, but waiting two years would cause the roadbed to be so degraded by traffic and weather that the price would rise fivefold, to $30 million.”

This is pretty meaningless unless you also provide the amount that would need to be spent in two years if you did the $6mm today. Surely it will still need some work. Maybe it’s $6mm again in 2 years, maybe it’s $20mm, so you only save $4mm. Now, I’m sure it’s better to spend now then later, but with what is presented, it shows the far end of the spectrum, which may not be that close to reality.

Posted by kmbutler | Report as abusive
 

kmbutler, I can’t speak for that particular project, but roads are built in several layers. Replacing the top layer is relatively cheap. But once the top layer (the asphalt) breaks down, the lower layers start to pit (potholes). Fixing THOSE is dramatically more expensive. The estimates might be realistic.

Posted by TFF | Report as abusive
 

This is all wonderful, but… the political cost of taking on this debt is unacceptable. The GOP will require tax cuts for the rich and the utter destruction of the social safety net in return for repairs to infrastructure. How is this a good deal?

Posted by silliness | Report as abusive
 

Given that dsl80 is echoing the Big Lie, I’m half inclined to mark his triple-post as spam… Fannie and Freddie did NOT cause the financial crisis, and they were followers, not leaders, as the financial industry piled into overinflated real estate derivatives.

http://www.washingtonpost.com/business/w hat-caused-the-financial-crisis-the-big- lie-goes-viral/2011/10/31/gIQAXlSOqM_sto ry.html

Posted by Auros | Report as abusive
 

Certainly spending on maintenance needs to be maintained, not cut, but is this another way for pork belly politics to buy votes? Of course it sounds sensible, but if the price is cuts elsewhere, perhaps those cuts should instead be made in the localities where the repairs would be made? That would cut out the pork belly element, and focus the minds of local politicians on local matters.

Instead of following what the Alaskan Tea Party wants to do, a Republican Congressman may find it harder to refuse to spend money on a local problem his voters want fixed, and may even think twice about the cuts he would have to make to other local projects in order to pay for the maintenance.

Posted by FifthDecade | Report as abusive
 

I have a family member about to go bankrupt! I’ll tell them to step up their spending as a solution!

Posted by DrJJJJ | Report as abusive
 

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