Fixing Infrastructure Isn’t as Simple as Spending Another Trillion Dollars
It isn’t easy to add new subway lines or new highways, and so “solutions” don’t really exist.
If there’s one thing Americans can still agree on, it’s that America needs to spend more on infrastructure which is visibly falling apart in many places. This capital investment creates jobs and satisfies everyone’s ideological requirements: investment in public infrastructure helps enterprises, local governments and residents.
Unfortunately, it isn’t a simple as spending another trillion dollars. Spending money is the easy part; actually fixing what’s broken isn’t just a matter of spending more money.
The poster child for spending trillions on infrastructure and getting very little value is Japan, which has funneled much of its fiscal stimulus over the past 30 years into vast and largely needless infrastructure projects: bridges and roadways that are lightly used being just one example.
The reason for the this low-value-creation policy is the political power of the construction industry and the convoluted political structure which gives rural areas inordinate political power over public spending. As a result, enormously expensive and utterly needless highways and bridges litter lightly populated rural communities which have become dependent on construction jobs for what little remains of the local economy.
In other words, what’s broken in Japan remains broken. Spending more on infrastructure hasn’t fixed what’s dragging the nation into permanent stagnation.
If you live in any of America’s major urban centers (or happen to visit), you know that traffic congestion is now off the scale. From Portland to Las Vegas to Atlanta, traffic jams and crushing commutes are now the norm.
Soaring housing costs have pushed workers farther into the exurbs, lengthening commutes and choking highways constructed for a much smaller populace.
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