03/28/2024

Too Much Law and Too Little Infrastructure

During the 2016 presidential election campaign, one thing that both Democratic candidate Hillary Clinton and Republican Donald Trump agreed on was that the United States needed to renew its infrastructure. The former has proposed a $275 billion initiative to achieve just that; the latter has staked much of his claim to competence on his ability to build things. Clearly, the new President will have to do something starting in January 2017 given promises that have been made to date.

The importance of infrastructure for economic growth need not be belabored; it is part of the capital stock that enables and increases U.S. productivity. Nor has the severity of its decay gone unnoticed; the issue has been discussed extensively in the media. But the issue also bears important political implications. Building infrastructure creates large numbers of jobs for working Americans, and renewed efforts can bolster the sagging fortunes of the working class, whose anger has propelled populist politicians like Donald Trump. It is one of the few ways that the Federal government can spend money to reduce income inequality in the United States.

Infrastructure decay not only costs us economically at home, but also negatively affects our international influence and status. The United States, which used to have the finest infrastructure in the world, is now ranked 16th according to the World Economic Forum. Corporations like Caterpillar and GE argue plausibly that the declining U.S. capacity for large-scale infrastructure hurts the nation’s ability to compete abroad.

The existing infrastructure deficit does not arise out of a vacuum: Our recent failure to build new and smarter infrastructure, as well as to properly maintain the existing stock, constitutes a microcosm of larger governance failures. There is a perfect de facto conspiracy on the part of the two main political parties to block a major push on infrastructure. The Republicans, for their part, do not want to pay for it, and have blocked increases in the gas tax that funds the Highway Trust Fund since the early 1990s. The result is that the revenue collected from that tax has not kept pace with inflation. By contrast, the Democrats feel comfortable permitting new projects to death, increasing both their cost and the length of time needed to execute a project. Between this Scylla and Charybdis, very little has gotten done.

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