Word on the street is that President Obama will call for yet more “infrastructure” spending in his
Wednesday Thursday night campaign speech address to Congress. Russ Roberts, of Econtalk, makes the effective rebuttal to this idea (as with most of the President’s ideas, it’s too amorphous to call it a “plan”) in two posts, “Crumbling“, and “Shovel Ready.” In Shovel Ready, he notes that Japan spent a decade spending money on “shovel ready” public works projects that provided little economic benefit above and beyond the circulation of currency for its own sake (or its own sake).
In Crumbling, he shows that we’ve been increasing the percentage of GDP spent on infrastructure for about three decades, and yet still hear complaints about “crumbling infrastructure.’ He then goes on to quote a New York Times column giving examples of waste here. One thing he doesn’t mention is that building pointless roads isn’t just a one-time expense – we’re stuck with the maintenance of those roads pretty much forever, lest they, too “crumble.”
Of course, this was before the most recent “stimulus,” and all those orange signs proclaiming spending throughout the land and to all the commutants thereof.
Taken as a whole, it’s a powerful argument against the sort of fire-hose spending “plan” that will likely be announced Thursday night.
I happen to believe that infrastructure is one of the proper areas for government spending, for a variety of reasons. How best to do that can be the subject of vigorous debate, but the story of the Kansas Turnpike shows the risks incurred when interstate projects aren’t attempted by an interstate authority. (For the moment, I’m happy to revisit the debates over political economy from the 1940s, but not the 1840s.)
All of this is what makes the first stimulus package such a shame. In the 1950s, we had the luxury of buying North Dakota’s support for I-95 with I-94. We could make a lot of mistakes, and still get the thing basically right. We don’t have that luxury now. Wasting almost $1,000,000,000,000 in “infrastructure” spending in 2009 doesn’t mean we get to go back and clean up the mess. It means we don’t have the money to do it right this time, so there is no this time.
A friend of mine likes to bemoan Americans who won’t spend on infrastructure, but it’s probably one of the few areas where the overwhelming majority of us actually do agree. And if the government weren’t so busy doing all the other things it shouldn’t be doing, it might actually have the attention and money to get this one right.