August 1, 2021

Just Because It’s Said by Joe Doesn’t Make It So

Attention readers: Neil Patel is off this week. Please enjoy the following column by Veronique de Rugy.

While President Joe Biden’s administration doesn’t seem to need an excuse to spend money, two recurring arguments for his gigantic $2.3 trillion infrastructure proposal are that our roads and bridges are “crumbling” and that modernization would generate economic growth and jobs — hence its name, the American Jobs Plan. But none of this clever marketing makes any of these claims true.

Let me start by pointing out that, to the extent that people think about roads and bridges when they hear the word “infrastructure,” they should know that only $621 billion of the $2.3 trillion is for transportation — and of that sum, only $115 billion is for repairing roads and bridges. The rest of the bill is mostly a handout to private companies that already invest heavily in infrastructure. These subsidies will come with federal red tape and regulation and hinder job creation, not bolster it.

Also, while our infrastructure could certainly be modernized and could use some maintenance, it’s not crumbling. According to the World Economic Forum, U.S. infrastructure is ranked No. 13 in the world — which, out of 141?countries, isn’t too shabby, especially when considering the enormous size of our country and the challenges that presents.

Yet as Washington Post columnist Charles Lane notes, it would be more accurate to bundle European nations together, since they share a significant amount of infrastructure, which would move the United States into fifth place.

Moreover, while the American Society of Civil Engineers’ 2021 report card gave the United States a C-, this is its best grade in two decades — meaning that the quality of roads, bridges, inland waterways or ports has been improving each year, without a congressional rescue plan. This fact doesn’t quite fit the crumbling-infrastructure narrative that politicians and the media like to tout.

Academics also refute the idea that infrastructure is crumbling. Reviewing a large body of research in a National Bureau of Economic Research paper, Wharton University economist Gilles Duranton and his co-authors state: “Perhaps our main conclusion is that, on average, U.S. transportation infrastructure does not seem to be in the dire state that politicians and pundits describe. We find that the quality of interstate highways has improved, the quality of bridges is stable, and the age of buses and subway cars is also about constant.”

This is an important reminder that the private sector doesn’t seem to have any problem maintaining its infrastructure assets, as we see in the difference with railroads. Passenger rail is in mostly bad shape when owned publicly, whereas privately owned freight rail is mostly strong in quality. The best way to improve infrastructure isn’t to throw taxpayers’ money at it, but to privatize things such as passenger rail, airports and air traffic controllers, as many other countries have done already.

Also, while the idea that building infrastructure will bring about more economic growth makes for a good talking point, it doesn’t work in practice. It’s proven that when there’s already economic growth occurring in a specific area, infrastructure spending targeted to support the boom will promote even more growth. But simply building infrastructure in the hope that it will create growth isn’t supported by evidence. For instance, in their review of the literature, Duranton and his colleagues find “little compelling evidence about transportation infrastructure creating economic growth.” One reason is that a supply of more infrastructure is likely to be a total waste of money if there’s no actual demand for it.

What’s more, looking at spending on highway construction in the Great Recession stimulus bill, economist Valerie A. Ramey concluded that “there is scant empirical evidence that infrastructure investment, or public investment in general, has a short-run stimulus effect. There are more papers that find negative effects on employment than positive effects on employment.” What that spending does do, however, is displace private investments. This is unfortunate, since the Congressional Budget Office found that private spending produces twice the return as does public spending.

Finally, in theory, government spending could lead to higher growth in the longer term. Unfortunately, legislators’ well-documented tendency to make decisions based on politics often leads them to favor projects that are outdated, expensive and never profitable at the expense of private and profitable alternatives. Rail and transit projects come to mind.

The bottom line is this: Politicians make a lot of promises, but we shouldn’t always believe them.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. To find out more about Veronique de Rugy and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.

COPYRIGHT 2021 CREATORS.COM

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19 Responses

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  2. We may be “fifth” under the best statistics in this story but there’s no mention of China. They’ve been building REAL infrastructure at an astonishing rate that makes us look third world.

    1. The sad thing is: not only do these spendthrift Libtard democrats MAKE us look like a third world nation, they literally ARE MAKING us into a third-world nation, as they spend money we don’t have, as a nation, on projects that only benefit a few individuals while leaving more and more American citizens living in tents on the sidewalk, as they, the “elite” work to screw up America’s potential., only to benefit themselves.

      1. I agree with you Dan, but, I think it’s because the US is planning on converting to a digital system. This will decrease the amount of the US dollar, by 31% as I have been reading. This will put most of us in the poor house. From what I understand banks are dumping US dollars at an amazing rate and increasing interest in SDRs which are special drawing rights from the International Monetary Fund or in plain words digital money. They are printing all this money because it will soon be worthless?

  3. And from where do they get the laborers to do the actual work, i.e. dig the ditches, pour the concrete, stuff like that, and how much do they k\pay them. Just wonderin’.

  4. Well no worries we will be China West by the time we get rid of the communist we have for president and Vice president. the rest of the left lunatics

  5. THAT’S WHERE OUR MONEY IS GOING, THEY WANT TO CONNECT TO AMERICA! EVERY TIME THEY SEND OUT A LITTLE BIT TO US, THEY SEND OUT BILLIONS AND TRILLIONS TO THEM, PROB PAYING OFF WHAT BIDEN AND HIS SON GOT FROM THEM TO PAY FOR THE ELECTION SCHEME, SCAM, JUST PAYING OFF PEOPLE TO SEE THAT HE WON.

  6. It is an attempt by the Democrat’s to buy their way with handouts for votes and support . The left has gone to far with this rip off of the nation.

  7. WHEN ARE PEOPLE GOING TO WAKE UP AND ADMIT WE NEED TO IMPEACH BIDEN AND HARRIS!

    WE THE PEOPLE (aka SILENT MAJORITY) had countless opportunities to have stopped this nightmare, but we chose to give the DEMOCRATS what they expected of us, to REMAIN SILENT! Thus, making us equally complicit in the fraud perpetrated against United States Americans!

    Isn’t it time you actually did something, took action? How much more damage needs to be done?

    I urge everyone who reads this to PICK UP THE PHONE and call your REP AND SENATORS in DC and DEMAND IMMEDIATE IMPEACHMENT OF BIDEN AND HARRIS.

    BIDEN is completely UNFIT FOR OFFICE! Biden is guilty of 18 U.S. Code CHAPTER 115—TREASON, SEDITION, AND SUBVERSIVE ACTIVITIES.

    HARRIS is guilty of violating 18US Code 2381 Treason, 18 US Code 2382 Misprision of Treason, 18US Code 2383 Rebellion or Insurrection, 18 US Code 2384 Seditious Conspiracy and 18 US CODE 2385 Advocating Overthrow of Government!

    Can you tolerate gasoline prices, product prices all going up, the WH being run by Harris, Pelosi and Schumer? Literally destroying our country, allowing thousands of illegals into our country bringing in God knows what diseases?

    Then copy and paste this information into an E-Mail and send to friends and family asking them to make the calls, then forward on to their friends asking them to make the calls and forward on! WE NEED TO MAKE THIS GO VIRAL!

    Members of the House
    202-224-3841

    Members of the Senate
    202-224-3121

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    Keep in mind: SILENCE = ACCEPTANCE

  8. The so called infrastructure bill is just another waste of already over taxed taxpayer money. Democrats don’t have a problem spending other peoples money and try to put everybody into the poverty level except them.

  9. Here’s my two cents in this discussion. Every time politicians want to spend more money then we have, it’s always we need to fix road, briges, we need to up the gas tax. We all pay taxes on our has every time we buy it. Someone tell me where all that money goes. Democrats will take the money to pay their backs millions and they will get kick back in millions. Another golden apple is education, we need more money for schools. Nothing get done but the educational unions take in million. This has been going on since the beginning of taxiing. We pay thru the nose more the half our pay in taxes. They never have enough.

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  11. joe biden is an idiot plain and simple–bottom 10% in both college and law school–what’s a fella to do–be a politician, and he’s not the dumbest, the guy from georgia who questioned a navy admiral if adding and additional number of troops and their families, what’s keeping the island of guam from capsizing? really there needs to be an IQ test for all people on the federal payrolls/especially the idiots that are making all the new bs rules/regulations and raising taxes to pay for a bunch of border jumpers/and soon their famlies!

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