I recently wrote why I think the US infrastructure “crisis” is way overblown. Not that we don’t necessarily need more spending. Maybe we do. Not trillions, though. Transportation, in particularly, is poorly priced, leading to ineffecient use. Like economist Edward Glaser of Harvard, I am more worried about the state of our schools than our highways. On a recent EconTalk podcast with Russ Roberts, Glaeser gave his two cents on the supposed infrastructure crisis:
When I think about America as a whole, I see an amazing amount of infrastructure. And it certainly doesn’t appear to me that we are deeply lacking in infrastructure. That wouldn’t have seemed to me to be America’s primary lack. I worry about competitiveness over the next 50 years; I am far more concerned with the quality of our schools than the quality of our highways.
And the second thing which I think is central is I see no reason; almost all infrastructure can be paid for by users rather than the general tax revenues. I just cannot possibly see why we think that the crumbling bridge is a job for taxpayers far away rather than the users of that bridge. Or our airports need to be paid for with general tax revenue rather than by the generally well-heeled customers of those airports.
So, I am certainly willing to believe that there are particular points of infrastructure that need upgrading; but if they can’t be upgraded with the fees on their own users then I’m going to be much more skeptical about the need to upgrade it.
Adam Smith said this quite clearly, quite eloquently, 240 years ago, that the best way to avoid white elephant projects was to fund those projects with fees on the people who were actually going to use them. Those words remain true today.
Follow James Pethokoukis on Twitter at @JimPethokoukis