Crumbling

by Russ Roberts on September 5, 2011

in Stimulus

Whenever someone writes about infrastructure or bridges, they always use the word “crumbling” and say that we have neglected our infrastrucutre. We have to spend more, we’re told.

It is good to remember this picture from David Leonhardt’s November 2008 column on infrastructure that shows that federal spending on infrastructure as a proportion of GDP was actually higher in 2008 than it had been any time since 1981.

Here is Leonhardt’s assessment of the problem. This, of course, is before the stimulus passed. But Leonhardt was prescient about the problems:

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.”

We’re always being told that we need to spend more money to fix the problem. That is much easier than fixing how the money is spent.

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{ 18 comments }

Jim September 5, 2011 at 10:12 am

The more likely outcome of debt financed infrastructure payments is that we will just fund a longer waiting line, like ensuring the doctor’s waiting room is full and all the customers can pay.

No sane state or local government will add appreciably to their union rolls; their coffers are already bare, pension obligations are under-funded, and future tax revenues are uncertain. In what world would you hire more union folks, even if the president gives you a few billion?

Are the egg heads in Washington really this naive?

I have an idea. Obama should travel to every local government pleading for a licensing and zoning moratorium so folks can start up businesses without government and legal interference. It may even serve to move the stagnant residential housing market through conversion to office and retail space.

Then, he should call a press conference and ask for forgiveness for preserving bank debt which at least partly forced the stagnation.

Majuscule September 5, 2011 at 10:33 am

In August 2007 the Interstate 35W bridge over the Mississippi River collapsed in Minneapolis. In February 2008, the Minnesota legislature overrode Governor Tim Pawlenty’s veto to pass a $6.6 billion transportation bill. The gas tax rose by 8.5 cents per gallon. The sales tax in Minneapolis-St. Paul metro counties rose 0.25 % to 6.75% to fund mass transit. Licensing fees for new vehicles also increased. The timing was not a coincidence.

The handwringing and fog of emotion caused by the bridge collapse led directly to this legislation. Governor Pawlenty was blamed both directly and indirectly for the disaster due to his hardline stance on preventing any tax increases under his watch. He was also blamed for the “crumbling” infrastructure that no one seemed to notice until just then.

Here are facts that were conveniently ignored by proponents of the bill:

1) The bridge contained a major design flaw: undersized gusset plates. The plates had been there since the bridge opened in 1967 but no government inspector had noticed the problem in the subsequent 40 years. Bridge inspectors are paid with government transportation funds.

2) In the 40 years after the bridge opened, 2 inches of concrete had been poured on top of the original deck. This increased the dead weight of the bridge by 20%. This concrete was paid for with government transportation funds.

3) At the time of the collapse, 578,000 pounds of construction equipment and materials were staged directly above the weakest point of the bridge. This construction work was being paid for with government transportation funds.

How could anyone with a straight face argue that transportation funding was being criminally ignored when transportation funding directly contributed to the collapse? Anyone who invokes tragedies like this to justify their penchant for fleecing taxpayers deserves to be ignored. Unfortunately, too many people are ruled by emotion over logic and allow the fleecing to occur. Never let a crisis go to waste, I suppose.

Chucklehead September 5, 2011 at 11:47 am

Interesting. Thanks

mightymouse September 6, 2011 at 4:48 pm

“The bridge contained a major design flaw: undersized gusset plates. The plates had been there since the bridge opened in 1967 but no government inspector had noticed the problem in the subsequent 40 years.”
50 years ago they probably did not have fancy finite element programs and had to do calculations by hand, so the engineers back then are usually extra conservative. So if you said that the gusset plate was under-designed, it was most likely because the bridge was accommodating higher demand than the capacity. The bridge has not kept up with the demand and is over-utilized because we have not been spending enough to keep up.

” In the 40 years after the bridge opened, 2 inches of concrete had been poured on top of the original deck.”
Because the bridge was accommodating a higher demand than the design capacity, what do you expect would happen to the pavement?

“At the time of the collapse, 578,000 pounds of construction equipment and materials were staged directly above the weakest point of the bridge.”
Well now you’re just blaming the DOT for doing maintenance. What do you expect? Infrastructures have to be maintained.

Randy September 5, 2011 at 10:52 am

Its the law of diminishing returns operating in a program run by people who don’t understand the concept.

Chucklehead September 5, 2011 at 11:51 am

Infrastructure now only makes sense because you should be able to get lower bids with the industry being hungry. Of course the project choice will determine if it is a wise investment. Davis bacon should be repealed, and gas tax money should be used for roads, not mass transit. Better yet, let the federal tax expire and let states set their own rates and direct their funds.

mightymouse September 6, 2011 at 4:56 pm

“Of course the project choice will determine if it is a wise investment.”
When lots of developed countries and many emerging countries embrace PPPs, why aren’t we, the US, going in that direction? It’s proven that gov’t don’t know how to distinguish “wise investment” and private will jack up your price of using the roads, so why not PPPs?

“gas tax money should be used for roads, not mass transit.”
Gas tax money should be used for whatever yields greatest return. If it’s mass transit, then mass transit it is.
And anyway, what is wrong with us, Americans? When every other developed countries and emerging countries are investing money in mass transit, we have been left behind.

Michael E. Marotta September 5, 2011 at 2:09 pm

Obviously, the lack of direct payments by users to fund the construction is the problem. You can find failed McDonald’s and 7-11 Stores, but you have to look hard. K-Mart went through two bankruptcies before recovering to buy out Sears. No one wrung their hands over K-Mart’s “crumbling infrastructure” — and it is good that they did not. Privatize the roads. That solves the basic problem.

Secondarily, while the Romans over-built, we under-build. They did not want to waste time fixing things. Today’s construction contractors depend on the government revenues that we see clearest as orange barrels. I just drove from Ann Arbor to Austin. Tennessee’s Albert Gore Sr. highway is a monument, certainly to Sen. Gore, though perhaps not to the wise practice of civil engineering.

Jim September 5, 2011 at 2:34 pm

Until I moved to Virginia, I was unaware that orange barrels were permanent road fixtures and routing tools. I always thought they were temporary construction markers.

It took my city 6 years to add an exta lane to 3 miles of road. During one of those summers, all 3 highways in and out of the city were under construction.

One 20 mile stretch of our state highway has been under construction for 22 of 23 years.

It couldn’t get any worse. Giving these folks more money is absurd.

kyle8 September 5, 2011 at 2:24 pm

We were told that most of that 800+ billion spent on the stimulus was supposed to go to shovel ready infrastructure jobs, but instead it was dished out in a huge slush fund to the democrat parties union and NGO cronies.

So now the money has run out and they want some more. There has rarely been such an obvious theft on such a grand scale.

Jim September 5, 2011 at 2:39 pm

Exactly my friend. It is a travesty.

In true ‘never let a disaster go to waste’ style, I believe the Progressives believe that they can just punch their agendas through with appropriate doublespeak, and the economy will keep pressing on with adjustment.

At some point, the straws break the camel’s back. That time is now. For twenty years, I have been asking people to imagine how rich even the poorest of us would be if the government had protected and nurtured markets instead of destroying them.

As an example, imagine the difference to living standards if just SS were returning life insurance style ROI’s to the working poor for the last 30 years.

mightymouse September 6, 2011 at 5:02 pm

“We were told that most of that 800+ billion spent on the stimulus was supposed to go to shovel ready infrastructure jobs, but instead it was dished out in a huge slush fund to the democrat parties union and NGO cronies.”
Most of that 800+ billions went to bail out the banks and big corporations and wealthy people in the form of tax cuts… did I say rich, i mean “job creators”…
Only less than 60billions (less than 8 percent) of stimulus went to infrastructure projects.

muirgeo September 5, 2011 at 2:39 pm

Come on now. Let’s not be selective about where we bias our starting point. We spent WAY MORE in the 50′s, 60′s and 70′s and had glass smooth roads and NO economic collapses.

kyle8 September 6, 2011 at 7:29 am

you are an idiot. we had a severe recession in the 1950′s and the economy nearly totally collapsed at the end of the 1970′s.

We also had a hell of a lot of bad roads, bad bridges, featherbedding, cronyism, and pork laden cost overruns. You are probably too young and think that is was a ideal time period. it was not.

Did I mention you were stupid?

mightymouse September 6, 2011 at 5:05 pm

“you are an idiot. we had a severe recession in the 1950′s and the economy nearly totally collapsed at the end of the 1970′s.”
Very adult-like.
On above comment, you missed the fact less than 10% of the 800 billions went into infrastructure projects, and yet no one called you names.

Will C. September 5, 2011 at 3:50 pm

One of the failings of government is that maintenance is neglected. In my climate (Chicago) we have winter freezing and thawing which breaks up the roads if cracks are not filled once or twice a year. Not maintaining the roads means that the politically connected construction companies (two in number) get to do more paving. When I lived in Pennsylvania we had a road repaved which did not last one full year. So between no maintenance and shoddy work a ton of money is siphoned to political cronies. This is highly likely to have been repeated in other areas of government.

Kevin September 6, 2011 at 12:20 pm

Huh. This article also reminds me of discussions of the education system.

“Throw more money at it!”

If you pay for more of what you’ve been getting, you’ll simply get more of what you’ve been getting. This should NOT be surprising!!

Sawyer50 September 8, 2011 at 9:15 am

Infrastructure is not just about bridge’s. If you want to know more, watch the show: The Crumbling of America. As for unions getting the work. It is now close to 911. Who do you think the real hero’s where?
Yes Police and fire fighters, but only before the buildings went down. Afterwards, who do you think went in trying to save people? The Union Iron Workers!! These are the people who know how to build large projects, have always put their heart and souls into their work, and showed the way, for fair working conditions. They are as American as apple pie. But our country doesn’t seem to like America anymore, and wants to change it to something different. Watch what you ask for you just might get it. No values, no morals, no respect for all the hard labor that has built this country up to what it is. You think bringing in poor Mexican’s for slave labor is the answer? You just sold your country out for a few bucks AGAIN. Keep teaching the public this is a good thing. Remember your gone to get old sooner or later, and the people who are gone to take care of you, are gone to be the same people that only think about themselves, and how much money they can make. They surely won’t be the people who want to be there for you, because it’s the right thing to do.

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