It’s that time of year, so I’m doing a lightly themed version of what ideal areas of focus are for government spending. We’re using ‘A Christmas Carol’ and playing with the ghost of Christmas Past/Present/Future. Sorry. It’s low-hanging fruit.
Almost every aspect of our infrastructure, once world-class, is now outdated and crumbling. Our overall score on the American Society of Civil Engineers’ report card is a D. Estimates for the scale of the underinvestment range well over a trillion dollars. That’s not a total bill, that’s an estimate of the cost of bringing our existing infrastructure into good condition and modernizing it. There are some exceptions; our freight rail infrastructure is the best in the world and energy production is both diverse and robust. Bringing the rest of our infrastructure up to the standards set by those aspects would help boost GDP growth in the short run, increase the value of existing government assets, and add long-term growth.
Let’s start by talking about the movement of people. Public transit is where the US has the worst shortcomings. In a 2013 poll, only 51% of Americans responded that they would be able to get to a grocery store using public transit. The yawning gulf between effective public transportation and what we currently have is only expanding as our population becomes more urbanized. Even cities thought of as places with high-quality infrastructure are struggling to modernize. New York City’s subway system frequently encounters delays and overcrowding. Updating aging systems, refurbishing rusting and crumbling tracks, and expanding insufficient public transit infrastructure is particularly difficult in dense cities where real estate is valuable and utilities are run underneath our feet. On top of that, sometimes residents stand in the way as the noise can be something of a nuisance.
The answer to ballooning costs is not just throwing money after the problem; urban planners must first observe how people move and then figure out how existing systems can be supplemented or expanded. For example, many South American nations, too poor to afford expensive rail systems, rely on slightly modifying roads so buses can move rapidly through traffic. Adding tolls to roads reduces traffic and increases usage of public transit, which in turn makes it more sustainable. Tolls also help fund maintenance on those roads (if you’ve ever taken a toll road, you’ve probably noticed that the quality is noticeably better).
Our highways, after all, are not in great condition, either. They have a growing backlog of needed rehabilitation. The combination of deteriorating quality and increasing congestion has led to the end of the decline in traffic fatalities and an estimated annual cost of $160 billion in wasted fuel and time according to a study conducted by Texas A&M. We need to invest an enormous amount of money in our roads to bring them back up to par. We could easily connect this to public transit and only spend the money in municipalities that allow higher levels of density.
If you don’t want to drive over the highways, you have to walk into one of our airports. It’s likely that, if you’ve traveled abroad, you’ve noticed the difference in quality between US airports and airports in Europe or Asia. User fees are federally capped in the US, limiting the ability of our airports to invest in themselves. The results are crowding, lines, more frequent delays, and longer delays when they do occur. The problem has gone on for too long, though, and needs to be kickstarted with a shot of stimulus for expanded terminals, updated air traffic control (especially important with the expansion of drones), and more runways.
Goods are also frequently spirited across the country and the globe via our roads and airports, but there is one thing we do better than anyone else: freight rail. This is one of a few things that President Jimmy Carter successfully deregulated. The Staggers Act (1980), freed carriers to set their own prices and allowed them to abandon lines that were no longer profitable. The combination of higher potential profit and lower risk unleashed a wave of competition and today we ship a higher percentage of goods by rail than any other developed nation despite an effective subsidy of trucks (not as many tolls and lower taxes) when compared to those other nations. It should be noted that this deregulation was limited to freight rail and did not impact passenger rail.
Another successful Carter Era policy was the deregulation of utilities. Energy was addressed by forcing the owners of the electric grid to accept electricity from any source, which made solar and wind farms possible today. Rates are lower with energy producers forced to compete and the network is more distributed. This means that it is also more robust; if one producer is somehow incapacitated, the entire grid does not collapse. Further investments in the basic research making more advanced methods of energy production possible could go a long way towards helping us grow; more energy makes all energy cheaper and that makes more things possible. We will talk about that in the ‘future’ section of this brief series.
Electric transmission, though, is mostly unchanged since the 1950s and 60s. Competition is harder, especially over long distances. You don’t necessarily want multiple long-distance powerlines dotting the landscape or covering our cities. It would probably be more effective to use competition only in the bidding on the construction of new lines. NASA was able to spark a private revolution in rockets by guaranteeing a buyer of that propulsion. The Department of Energy could certainly do it by guaranteeing a buyer of massive amounts of modern electricity transmission infrastructure. SpaceX built reusable rockets. Perhaps the best kind of infrastructure has not yet been invented.
Nothing will change without enormous investments and these only scratch the surface of what we need to work on, but sustainable investments must make every dollar count. Spending carefully and maximizing the impact of each dollar doesn’t just save us from a pile of debt, it means we can do more now. The $900 billion stimulus bill that made it through Congress does start to address some of these issues, but that’s all it is: a start.