The hidebound and costly thinking on infrastructure
There are any number of reasons to push back against the Biden administration’s $2.3 trillion infrastructure proposal, and the remnant that still thinks Washington spends too much money for a bankrupt have been making that case from the beginning.
Among them is the Cato Institute’s Chris Edwards, who penned 10 reasons to oppose the Biden infrastructure idea. Included in the list are the usual suspects – waste, bureaucratic delay, and increased cost. But so, too, is how much Uncle Sam’s plans for roads, bridges, and much else distorts incentives, and blocks innovation:
Federal infrastructure subsidies discourage the states from moving facilities to the private sector where they would be better managed. Biden would increase subsidies to airports, for example, but airports do not need subsidies. Many European airports have been privatized and are self‐funded through user charges and commercial revenues.
The urge of federal policymakers to support infrastructure is understandable. America should have the world’s best highways, airports, and other facilities to help us compete. But any package coming out of this administration and Congress will likely distort investment, increase federal red tape, and reduce private investment by raising taxes.
A better approach is to let the states and private sector take the lead by raising user charges to fund new investments and encouraging private investment in airports, seaports, bridges and other facilities.
None of these considerations make their way into official Washington discussions. Instead, official DC is more concerned about looking busy (spending someone else’s money). Right on cue, the GOP has made Biden a counter-offer on infrastructure spending: a $928 billion grab-bag of items that might pave a few roads, but still refuses to look at new ways to build, maintain, and manage infrastructure as a whole.
That’s how government works, regardless of which party controls a majority – spend more, in the same way and on the same things, and hope for better results. It’s long past time to break this cycle, and try policy approaches that tap private sector innovation.