I’m not opposed to spending more money on fixing up roads and bridges and other physical infrastructure–indeed, it’s often an investment fully justified by cost-benefit analysis–but I am dubious that 21st century economic growth is going to be based on fewer potholes. When talking about investment to drive economic growth, I’d like to see more focus on expansion of research and development spending.
I will go a step further and say that I am opposed to more infrastructure spending as carried out by the Federal government. Politicians are fond of allocating capital to themselves, and my guess is that as flawed as the private sector may be, it will spend an additional dollar more wisely than the politicians.
So when the infrastructure bandwagon rolls through town, leave me off.
The only things I can think of that checks the boxes and moves the needle is evacuated tube transport, thorium nuclear, and solar and robotics research.
Would a requirement for an explanation as to what public good coordination problem is served by proposals do any good?
I’m not quite following here…. Is the private sector going to start fixing potholes on the interstates? Or is it that you think the private sector will build an alternate transportation infrastructure when the public stuff gets too bad to use?
If government spending increases to fix those potholes then it is taken away from the private sector. If they use it for new roads or other projects doesn’t matter in particular.
From my vantage point in NYC, I would guess that a lot of infrastructure has a negative return on investment. When you add up cost/time overruns and the disruption to existing lives it hardly seems worth it.
FedEx does report it goes through tires twice as fast as twenty years ago due to poor roads. Some state and local cost sharing is important to prevent bridges to nowhere though. It is stupid to think private can replace public. A much broader selection of targets is welcome. Roads tend to be quite expensive.
1. The need for infrastructure maintence implies a need to finance and perform maintence, not necessarily a demand that politicians be involved. Big new projects will often get attention when what is really needed is filling potholes, replacing boring but worn out bridges (rather than bridges in new locations) etc.
(Though to be fair, the WA replacement of the 520 bridge was to a large degree motivated by the fear the old one would sink in a storm. A quite reasonable fear…)
2. I am also skeptical of any analysis that says “R&D spending should be some percentage of GDP” – R&D spending should be driven by the rational frontier – meaning the spending should ideally match the opportunity for a better or faster result.
Many things happen only when “their time has come” and once enough is invested to be sure those good things will come as soon as practical, spending more will not help. (Driverless cars and indeed flying cars depend on a very high level of computing resource, computing resources are driven by relentless market pressures, you just have to wait…. Smart phones were not really practical until a certain class of touch screen arrived, you just had to wait…)
Is the world, including the US, spending enough resource in the rights ways on basic biological research, and medicine at the level of vaccines, blood pressure control, and so forth? Perhaps not. But if all available skilled research units are 100% comitted, then more spending won’t help, at least in the short term.
I’d start with learning the difference between operating budgets and capital budgets. Perhaps we should actually maintain public assets, and pay for it as we go.
As I’ve said numerous times we had to pay to bring our neighbors culverts to code because the builders put them in wrong on the promise of once the roads were annexed of receiving road maintenance, bus service and police patrols.
The payment went. The maintenance, buses and patrols never came. Be careful with assumptions.
Some years ago, The Economist nailed the issue, saying “America doesn’t have an infrastructure crisis, it has a pricing crisis.”
Private money WILL build public infrastructure if it can make a return.
Public-private partnerships let both government and markets have a say.
With a bit of skill and the right metrics, government can be bonded NOT to meddle later; the “rent control” problem can be solved.
Best of all, most infrastructure projects have interesting bundles of physical and financial risks. Again using the right indices and metrics, we can construct low-beta hedges (insurances) to make use of all that hungry capacity now flooding the insurance-linked-securities markets.
Well worth pursuing.