http://www.nytimes.com/2008/11/19/business/economy/19leonhardt.html?ref=business
Near the intersection of 47th Street and Lake Park Avenue here — a gateway to the Hyde Park neighborhood that’s home to the next president of the United States — sits an enormous, barely patched pothole. That pothole is a fitting symbol of this country’s crumbling infrastructure: its clogged roads, overburdened airports, aging subway systems and failed levees.
Now, finally, some help seems to be on the way. The House recently passed a bill that would allocate $18 billion for new construction projects. Barack Obama has signaled that he will sign a version of that bill and probably ask for tens of billions of dollars of additional spending to create badly needed jobs and help fix up America in the process. Money is going to start flowing.
And yet when it comes to the nation’s infrastructure, money isn’t the main problem.
A lack of adequate financing is part of the problem, without doubt. But the bigger problem has been an utter lack of seriousness in deciding how that money gets spent. And as long as we’re going to stimulate the economy by spending money on roads, bridges and the like, we may as well do it right.
It’s hard to exaggerate how scattershot the current system is. Government agencies usually don’t even have to do a rigorous analysis of a project or how it would affect traffic and the environment, relative to its cost and to the alternatives — before deciding whether to proceed. In one recent survey of local officials, almost 80 percent said they had based their decisions largely on politics, while fewer than 20 percent cited a project’s potential benefits.
There are monuments to the resulting waste all over the country: the little-traveled Bud Shuster Highway in western Pennsylvania; new highways in suburban St. Louis and suburban Maryland that won’t alleviate traffic; all the fancy government-subsidized sports stadiums that have replaced perfectly good existing stadiums. These are the Bridges to (Almost) Nowhere that actually got built.
They help explain why our infrastructure is in such poor shape even though spending on it, surprisingly enough, has risen at a good clip in recent decades. Spending is up 50 percent over the last 10 years, after adjusting for inflation. As a share of the economy, it will be higher this year than in any year since 1981.
So if you talk to people who spend their lives studying infrastructure, you’ll hear two reactions to the attention that Mr. Obama, Nancy Pelosi and even some Republicans are now lavishing on the subject. The first is: Thank goodness. The second is: Please, please don’t just pour more money into the current system.
“The system is fundamentally broken. We send a blank check and kind of hope for the best,” Robert Puentes, the infrastructure maven at the Brookings Institution, told me. “We need an extreme makeover.”
Mary Peters, the current secretary of transportation, put it this way: “The United States is one of the few countries in the world to make the majority of its transportation investments without first conducting any kind of economic analysis to determine whether those investments will have any practical benefits for commuters or shippers. The results are telling.”
How can we do better? I think there are three principles to follow.
The first is that we just need to start trying to do better. Right now, federal funds typically aren’t tied to tangible goals, like how much a new road would reduce traffic or how much a new train line would reduce carbon emissions and oil imports. Much of the time, the government doesn’t even collect this sort of information.
That is not the case in Britain and some other counties. As Mr. Puentes points out, projects in these countries are still sometimes based on political horse-trading. “But at least politicians are forced to stand up, in the face of evidence, and defend a decision,” he says. “It’s so different in this country, where there is no evidence.”
One of the best examples is the success of congestion pricing in London. By charging fees to enter the city, the government has vastly reduced traffic. The program, which initially faced skepticism, is now a big hit with the public.
In this country, the government keeps on building roads that keep on filling up with cars, because drivers don’t bear the full costs of the traffic, pollution, and wear and tear that they create. Just imagine if Congress, as a condition for financing new roads, demanded evidence that they would reduce traffic.
The second principle is that we could indeed stand to spend more on infrastructure. Spending may be at a 27-year high, but it’s still far from the levels of the 1950s, ’60s and ’70s, when the Interstate Highway System was being built. As a percentage of gross domestic product, it is below current levels in many European countries.
All told, government agencies here now spend about $400 billion a year on infrastructure. The Congressional Budget Office recently estimated that another $100 billion a year in worthy projects aren’t being done. (Of course, if some of the waste were eliminated from current programs, the net increase could be less than $100 billion.)
Finally, it’s important to remember why infrastructure has become a hot topic now. The economy already appears to be in its worst recession in a generation. Without a majorstimulus package, it could get a lot worse next year. So now isn’t the time to overhaul the entire system. Speed matters.
But now wouldn’t be a bad time to send a message. The current system is so inefficient that even a minimal amount of change would represent progress. If you want your project moved to the front of the line, you should have to come to Washington bearing hard data — not flimsy boosterism — about its economic and environmental benefits.
And infrastructure doesn’t have to just mean just bridges and tunnels. It can also means schools and homes. One intriguing idea is for the government to subsidize basic renovations to make houses more energy efficient. This would have the added benefit of putting unemployed construction workers and contractors back to work.
Over the longer term, there are some reasons for optimism. At the Transportation Department, Ms. Peters has pushed for more cost-benefit analysis (without getting much help from Congress). Mr. Obama has called for the establishment of a separate “infrastructure bank,” which could potentially make decisions more on the merits and less on politics.
None of these changes would happen without a fight, for the simple reason that some people and places benefit from the current system. But that fight is worth having. Today, when everyone is talking about stimulus, and big deficits are seen as necessary, government money may be easy to come by.
Someday, though, those deficits will have to be repaid, and there will no justification whatsoever for infrastructure spending that doesn’t really help the nation’s infrastructure.
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