Does America Underinvest in Infrastructure?
The Minnesota bridge collapse has sparked a number of inquiries about the state of America’s infrastructure. According to the WaPo,
[T]he overall national infrastructure is stuck in a “death spiral,” as states repeatedly fail to maintain the status quo condition of their transportation networks . . . . Maintenance standards slip further as the money is spread thin. Diminishing tax revenue and surging costs have put a double squeeze on state transportation departments, transportation experts said. While federal gas tax rates have remained at 18.4 cents a gallon since 1993, construction costs have been increasing 20 percent a year in some areas.
As law prof/infrastructure theorist Brett Frischmann has noted, “For public goods, the market mechanism may fail from both the supply and demand sides, even if markets are competitive.” So the government can intervene–but a 1998 CBO study concluded “additional federal investment spending is unlikely to have a perceptible effect on economic growth.” Of course, as the bridge tragedy shows, there’s a lot more to life than economic growth.
Economist Robert Frank tells a very different story than the CBO report in his book Falling Behind: How Rising Inequality Harms the Middle Class. He makes the following points:
Roughly half of the nation’s roads are in backlog, meaning that they are overdue for maintenance. Our bridges are in a similar state of disrepair. The deaths of ten motorists when a bridge collapsed over Schoharie Creek on Interstate 90 in New York prompted an emergency inspection of all the state’s bridges. More than one-third were found to be structurally compromised by deferred maintenance. Road maintenance postponed costs from two to five times as much as maintenance done on schedule. And in the meantime, damaged road surfaces
cause an average of $120 in damage each year to every car and truck in the country.
Why is America investing so little in infrastructure? Frank relates it to the positional spending pressures common in so many areas of life:
Why doesn’t the average voter realize that if we elect a Congress that raises taxes to fund basic public services, the extra tax burden won’t be very painful? After all, a direct consequence of the tax increase will be an across-the-board reduction in consumption, one result of which should be, according to my argument, that the consumption context will shift, so families won’t feel they need to spend as much as before.
[Unfortunately,] from a psychological perspective, this conceptualization of the problem is totally unnatural (and not just because mainstream economists never call attention to this side effect of tax increases). If I am carrying $5,000 of credit-card debt and thinking about my needs for the next month, and somebody then proposes a tax increase, I am going to say I just can’t afford it, even though I am fully cognizant that public services are underfunded.
I generally agree with Frank, and I think we need to assure the safety of our roads and bridges–especially the “75,000 of the nation’s roughly 600,000 bridges — 13.1 percent — [that] were rated ‘structurally deficient’” in 2005. Whether this is to be achieved by tolls or general taxes is a difficult issue; given what Republican Congressman Roscoe Bartlett has said about “peak oil,” I’m in favor of the former. But I think we can all agree this episode highlights the shortcomings of a reflexively “anti-tax” & “anti-toll” approach to government.