Infrastructure spending won’t transform America

By George Will.

"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 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.

Some historians even suggest that there might not have been a Civil War 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 increased infrastructure spending to increase productivity by reducing road and port congestions 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 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 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. And although the construction industry and unions might disagree, not everything ever built merits maintenance in perpetuity.

The last 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. America got many marvels — e.g., the Hoover Dam and 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."