October 23, 2008
By Ronald D. Utt, Ph.D.
You can tell Congress is getting close to the reauthorization
date for federal transportation programs (September 2009) when
publications of thoughtful commentary begin producing articles on
the infrastructure crisis confronting America and the need to
increase taxes and spending. Not too far behind in this
doom-and-gloom exercise are the many trade associations,
foundations, and lobbying groups hoping to influence the debate and
the money scramble that follows. State and local officials are also
joining the campaign.
Although these many tax-and-spend positions distinguish one from
the other, many take their inspiration from the badly flawed report
by the congressionally created National Surface Policy and Revenue
Commission, which recommended massive increases in taxes and
Encouraging this lobbyist/trade association feeding frenzy is
the promise by the chairman and ranking member of the House
Transportation and Infrastructure Committee to seek as much as a
half a trillion dollars in transportation spending in the next
highway bill, compared to the $286 billion in the 2005 bill. Left
out of the discussion is the fact that this goal would require a
near doubling of the federal fuel tax at a time when gasoline
prices have been hovering between $3 and $4 a gallon. But as the
recent history of both federal and state transportation policy
reveal-and notwithstanding huge increases in spending-government's
ownership and operation of roads and transit have contributed to
deteriorating service and quality in both, and throwing more money
at these programs will do little to alter this sad state of
Same Old Song
Many involved in this exercise to increase taxes for
transportation see their efforts as timely and urgent. But
aggressive efforts by the business community and state and local
officials to tap into the federal treasury to fund local
transportation projects are as old as the republic, and they are no
more sensible today than they were two centuries ago.
National infrastructure worries and pleas for federal money
first emerged in the internal improvements debate of the early 19th
century during the administration of Thomas Jefferson and continued
through most of the 19th century. In its earliest incarnation, this
debate focused on federal funding for canals, which Presidents
Jefferson and Madison wisely resisted, as canals (with the
exception of the New York state funded Erie Canal in its early
days) represented a costly and obsolete technology soon to be
displaced by the emerging steam-powered railroad technology, which
was largely financed by private capital. Little has changed since
that debate, and a predictable process of crisis mongering
continues through the present.
Government Getting in the Way
Despite the national attention it has received, much of the
current debate on infrastructure is simply wrong, and it may very
well be more wrongheaded today than at any time in the past two
centuries. More to the point, as any list of infrastructure "needs"
and "problems" reveals, nearly all troubled areas can be described
as those where government owns and operates the means of
production. In effect, what Americans now confront is a problem
familiar to the citizens of Bulgaria and Belarus: The crisis of
Note, for example, that all of the important types of
infrastructure that are included on the current crisis
list-airports, air traffic control, sewage treatment, water supply,
highways, and transit-are all largely the responsibility of
federal, state, and local governments. The infrastructure types
that seldom make it onto this crisis list are those provided by the
private sector: In just the energy and transportation area are the
pipelines, oil and gas wells, refineries, power grids, electricty
generation, freight trains, aircraft and automobile supply,
drilling platforms, storage tanks, filling stations, etc., that
seamlessly, efficiently, and safely deliver energy products and
transportation services-24/7-to American consumers and businesses
with few interruptions. As the Depression-era comedian Will Rogers
is said to have observed, the way to end traffic congestion is to
get government to manufacture the cars and private business to
build the roads.
Same Customers, Different Approach
Other valuable forms of infrastructure that never make it onto
the crisis list because they are privately financed and operated
include the vast and rapidly growing information technology grid
that gives us a choice of dial up, broadband, cable, optical fiber,
Wi-Fi, wireless, hard wire, broadcast (including satellite), and,
maybe soon WiMax, all of which provide reliable and inexpensive
access to the global communications network. Equally important is
the construction and development industry that provides an
abundance of office buildings, shopping centers, warehouses, and
all types of residential housing. Indeed, if there is any ongoing
problem with the private construction market, it is one of
occasional overproduction, not shortages. And the list goes on of
all the privately provided infrastructure available in abundant
supply-amusement parks, farms, health care facilities, beach
rentals, supermarkets, dog kennels, golf courses, restaurants,
etc.-but discerning readers get the point: Infrastructure provided
by the private sector is robust, reliable, and high quality. It is
expanding capacity and offering many choices at competitive
Perhaps nothing makes the relative point of value between state
and federal socialism and the private provision of services better
than the attitude of both toward their customers. Note that federal
and state transportation departments and local water supply systems
(whose pricing, distribution, and supply are unduly influenced by
politics and are short on technological innovation) have recently
adopted the austerity model of service provision-blaming their
production problems on customers that buy too much and increasingly
relying on punitive efforts to discourage use. In contrast,
imagine, say, a Google or a Wal-Mart begging customers to use less
of their services. Yet that is exactly the current strategy of many
government transportation and water supply departments.
Socialism in Disrepute
The difference between the two sectors-public and private-is the
real American infrastructure story: Our infrastructure is deficient
only in areas where we rely on an economic system that the rest of
world (save places like Cuba, Venezuela, and North Korea) abandoned
two decades ago. With the reauthorization of the federal surface
transportation program still more than a year away, there will be
plenty more opportunities for learned journals to explore this more
important aspect of America's bipolar world of infrastructure
dysfunction. In the meantime, Congress and the White House should
be looking for responsible ways to begin the process of shifting
more infrastructure responsibility from the public to the private
Ronald D. Utt,
Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in
the Thomas A. Roe Institute for Economic Policy Studies at The
Heritage Foundation. A shorter version of this article appeared as
a comment in the Wilson Quarterly (Summer 2008).
Ronald D. Utt, "The Transportation Commission's Proposed 200
Percent Gas Tax Increase: One of Several Bad Ideas in Its Report,"
Heritage Foundation Backgrounder No. 2103, January 30, 2008,
Ronald D. Utt, "Reauthoriazation of TEA-21: A Primer on Reforming
the Federal Highway and Transit Program," Heritage Foundation
Backgrounder No.1643, April 7, 2003, at http://www.heritage.org/Research/SmartGrowth/bg1643.cfm.
As the recent history of both federal and state transportationpolicy reveal, government's ownership and operation of roads andtransit have contributed to deteriorating service and quality inboth, and throwing more money at these programs will do little toalter this sad state of affairs.
Ronald D. Utt, Ph.D.
Herbert and Joyce Morgan Senior Research Fellow
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