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Get the Feds Out of Infrastructure

February 5, 2013 in Economics, Politics & Elections

By Chris Edwards

Chris Edwards

The federal government’s budget deficits are pushing the
nation toward a fiscal meltdown, yet our leaders can’t seem
to curb their zeal for infrastructure spending. President Obama has
been pushing a $50 billion package for infrastructure and will
likely include a similar plan in his upcoming budget. For their
part, most Republicans eagerly pursue all the spending they can get
for road, rail, airport, and dam projects in their districts.

The enthusiasm for infrastructure spending is emblematic of
broader problems in the bloated federal budget. Federal politicians
love to intervene in activities that should be left to state
governments and the private sector. And they claim that new and
expanded programs will produce great results even after decades of
waste on existing policies.

A report by Obama’s Treasury Department justifying his
infrastructure plan called for “well-targeted” and
“carefully selected” investments that are
“directed to the most effective programs.” But federal
infrastructure spending has never worked that way. For more than a
century, it has been shot through with politics, lobbying, and
bureaucratic fumbling.

Consider the two oldest federal infrastructure agencies —
the Army Corps of Engineers and the Bureau of Reclamation. Their
spending, often on water infrastructure, has always been based on
pork-barrel politics, not “directed to the most
effective” projects. Both agencies have been known for
fudging their analyses of dubious proposed projects to gain
approval. In his 1971 book on the Corps, distinguished engineer
Arthur Morgan found that “there have been over the past 100
years consistent and disastrous failures by the Corps in public
works areas … result[ing] in enormous and unnecessary costs to
ecology [and] the taxpayer.”

The federal
government is a poor choice to run infrastructure
projects.”

Army Corps and Reclamation projects have often been aimed at
benefiting private interests, not the public interest. For example,
the Army Corps’ costly Mississippi River-Gulf Outlet Canal
near New Orleans, which was completed to aid the shipping industry,
failed to benefit the regional economy. It also ended up harming
the general public interest by magnifying the damage caused by
Hurricane Katrina.

As to how “well targeted” federal infrastructure
spending actually is, look at Amtrak. Its investment is dispersed
to low-population areas where passenger rail makes no sense. Routes
through rural areas account for only a small fraction of riders and
cause most of Amtrak’s financial losses. Those routes exist
because every lawmaker wants a train through his or her state, but
it means that investment gets steered away from where it is really
needed, such as the Northeast corridor.

It’s a similar story with federal highway spending. Some
states, such as Texas, have growing populations and therefore
greater needs. But comparison of the …read more
Source: OP-EDS  

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