What rural electrification was eight decades ago, broadband access might be today: a blessing not widely enough enjoyed. But infrastructure spending will not have the economically and socially transformative effect that it had before America became a mature urban society. Princeton University historian James M. McPherson writes that before all-weather macadamized roads, it cost the same to move a ton of goods 30 miles inland as it cost to bring a ton across the Atlantic. The person who would become the 16th president began his public career advocating canal construction in Illinois, and in 1849, before he became a prosperous railroad lawyer, he received U.S. Patent No. 6469 for a device to facilitate boats’ passages over sandbars and shallow water.
Some historians even suggest that there might not have been a Civil War for him to win if the fourth president, James Madison, had not vetoed (on constitutional grounds; he thought that no enumerated power authorized Congress to do such things) the infrastructure bill of South Carolina’s Sen. John C. Calhoun, who became a secessionist firebrand. Their theory is that improved infrastructure might have moved the South away from reliance on a slavery-based agricultural economy.
Today, the nation needs somewhat greater infrastructure spending to increase productivity by reducing road and port congestion and boosting the velocity of economic activity. Unfortunately, this subject is not immune to the rhetorical extravagance that infects all of today’s political discourse.
The American Society of Civil Engineers has not actually programmed the computers of politicians and journalists so that whenever the nouns “roads” and “bridges” are used, the adjective “crumbling” precedes them. But the ASCE might as well have. It constantly views with high-decibel alarm the fact that governments at all levels do not buy as much as the ASCE thinks they ought to buy of what civil engineers sell. A calmer assessment of current conditions comes from the Rand Corp.’s study “Not Everything Is Broken”:
Since the mid-1950s, public infrastructure spending “has generally tracked the growth of the U.S. economy.” In 2014, state and local governments — they always have done, and always should do, most infrastructure spending — made 62 percent of the nation’s capital expenditures and 88 percent of operations and maintenance for transportation and water infrastructure. Federal capital spending on highways has been declining since the Interstate Highway System was mostly completed, but at the end of 2016, municipal bond issues to finance infrastructure were the highest in history, more than double the 1996 level. Actually, some infrastructure spending is probably too high (e.g., mass transit operating subsidies; users should pay). And although the construction industry and unions might disagree, not everything ever built merits maintenance in perpetuity.
The most recent surge of infrastructure spending, in the Obama administration’s stimulus, taught a useful lesson: Because of the ever-thickening soup of regulations, there are no “shovel-ready” projects. So, such spending cannot be nimble enough to ameliorate business cycles. This is just as well: Government attempts to fine-tune the economy are folly. The United States got many marvels — e.g., the Hoover Dam and part of the Golden Gate Bridge — from New Deal infrastructure spending. It did not get what the spending was supposed to provide: a cure for unemployment, which never fell below 14 percent until the nation prepared for World War II.
Bipartisanship, the absence of which is lamented until its recurrence reminds us of its costs, this month produced the budget agreement. It put the nation on a path to trillion-dollar deficits during brisk economic growth and full employment. So, Democrats face a disagreeable decision. They tend to regret private-sector involvement that taints the purity of government’s undertakings. Democrats might, however, have to embrace public-private partnerships that generate revenue streams — from tolls, user fees and other devices — for investors. That is, Democrats, whose euphemism for government spending is “investments,” might have to tolerate real ones.
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