This worry is overblown. The Reason Foundation put out a report this week that found America's infrastructure is in fine shape, though there's certainly work to be done.
All 50 states lowered their highway fatality rates from 1989 to 2008 and 40 states reduced their percentages of deficient bridges during that time. Nationwide, the number of deficient bridges in the country fell from 37.8 percent of all bridges in 1989 to 23.7 percent in 2008.
The Reason Foundation study tracks spending per mile on state-owned roads and measures road performance in seven categories: miles of urban Interstate highways in poor pavement condition, miles of rural Interstates in poor condition, congestion on urban Interstates, deficient bridges, highway fatalities, rural primary roads in poor condition and the number of rural primary roads flagged as too narrow.
Moreover, if America's infrastructure is in bad shape, it's not because of a lack of government spending. Reason Foundation found that inflation-adjusted infrastructure spending has grown by 60% in the last twenty years despite the government controlling roughly the same amount of road mileage.
It's popular to cite th World Economic Forum rankings of world infrastructure, but misleading. The U.S. was ranked 16th in infrastructure according to the WEF, behind similar countries like Canada. But the top countries in the world for infrastructure are small and dense - those of the Netherlands and Singapore, for example. Among the world's largest countries, the U.S. stands behind only Canada, and among the world's most populous countries is bested by France, Germany and Japan. U.S. infrastructure certainly comes out well compared to the rest of the European Union, as Charles Lane pointed out.
There are certainly things that the federal government can and should do in the area of infrastructure investment. Last year, Ed Glaeser laid out a positive agenda - because President Obama at the time was on a previous pro-infrastrucutre blitz - for infrastructure investment that would focus on market reforms and decentralization that would fix what needs to be fixed while staying humble in scope.
LET USERS PAY: In the early days, we paid for infrastructure, such as the Erie Canal and the Brooklyn Bridge, by charging tolls. That was easy to do, as demand for these improvements was enormous. But our fondness for big projects gradually and dangerously moved us away from this ideal. The Highway System is meant to be funded with gas taxes paid into the Highway Trust Fund, but funding formulas mean that the taxes each state pays into the fund rarely match the money received.
The stimulus delivered a dollop of highway spending provided with general tax dollars, and the Congressional Budget Office projects that the Trust Fund will be broke by 2014. Yet Congress is now promoting a vast new road spending bill. The budget the president presented yesterday supports paying for infrastructure with “current user-financed mechanisms,” but also proposes tapping “part of the savings from ending the war in Iraq and winding down operations in Afghanistan,” which just means using general tax revenue to pay for highways.
DE-FEDERALIZE TRANSPORT SPENDING: Most forms of transport infrastructure overwhelmingly serve the residents of a single state. Yet the federal government has played an outsized role in funding transportation for 50 years. Whenever the person paying isn’t the person who benefits, there will always be a push for more largesse and little check on spending efficiency. Would Detroit’s People Mover have ever been built if the people of Detroit had to pay for it? We should move toward a system in which states and localities take more responsibility for the infrastructure that serves their citizens.
INSTITUTIONALIZE MAINTENANCE FUNDING: Throughout the world, political leaders love to cut ribbons on new projects, but they hate the hard work of maintaining older infrastructure. The natural result is that bridges become unsafe and highways are riddled with potholes. As I suspect that states and localities will always do too little to invest in maintenance, this would be a good place to redirect federal spending.
Instead of funding new projects, the Highway Trust Fund could instead become solely a road and bridge maintenance fund. Obama’s 2013 budget moves in this direction by espousing a “fix-it-first policy,” but that isn’t the same as tying future tax revenue to needed maintenance.
Despite President Obama's dire warnings, American infrastructure is not "crumbling." Infrastructure investment isn't a magic wand for economic sluggishness. There are positive steps in a federal infrastructure reform agenda that can be undertaken, but President Obama's dire warnings about the decrepit state of American infrastructure aren't true and aren't helping move the conversation forward.
The Alberta Example: Spending Caps Are the Way to Prevent Unsustainable Fiscal Binges During Growth Years | Daniel J. Mitchell
Chicago's Fiscal Freefall: Moody's Cuts Chicago Credit Rating to Two Steps Above Junk | Mike Shedlock