U.S. Infrastructure: Not about to Collapse

A recent report from the RAND Corporation looks at America’s infrastructure and concludes that “not everything is broken.” In face, what is broken, more than the infrastructure itself, is “our approach to funding and financing public works.” This is largely because governments by-pass market signals and rely on “often complicated and multilayered governance arrangements and competing public goals and preferences” to make decisions about where to spend money.

For example, the report shows that government spending on infrastructure as a percentage of gross domestic product declined from a peak of 3 percent of GDP in 1960 to about 2.5 percent in 1980, and has hovered between 2.5 and 2.7 percent since then. But governments also made a clear trade-off in infrastructure spending: spending on roads declined from 1.6 percent of GPD in 1960 to around 1 percent in and since 1980, while government spending on mass transit grew from 0.1 percent in 1970 to 0.4 percent in and since 1980.

This would be fine if spending on mass transit had been as productive as spending on highways had been. But it wasn’t. Until the 2008 financial crisis, per capita driving continued to grow despite the lack of much capital spending on new roads, while per capita transit ridership was stagnant or declining. The report doesn’t have data after 2014, when per capita driving began to increase again while transit ridership began to collapse.

For highways, the report recommends transition to mileage-based fee collection “that more effectively links revenue collection to highway use.” For other forms of infrastructure, the report says governments should focus on “renewal of aging infrastructure and new infrastructure incorporating advanced technologies.” The report also suggests that maintenance spending focus on “mission-critical military bases, dams, levees, locks, national parks, and other vital federal infrastructure.”

Unfortunately, unless managers can use the kind of market signals generated by mileage-based and similar user fees, terms like “advanced technologies” and “mission critical” aren’t very useful. Many bureaucrats and politicians believe that streetcars are an advanced technology, and everyone likes to believe that their favorite infrastructure is somehow “vital” to the national economy.

The report does make clear that “shovel-ready” was a dumb criterion for selecting projects when Congress passed the economic recovery bill in 2009. Just because someone has written an environmental impact statement for a project doesn’t make that project worthwhile. The environmental impact statement for the Florida high-speed rail project, for example, specifically concluded that the project was not environmentally sound, yet Obama was willing to fund it simply because it was shovel-ready.

In addition to noting that cost and usage forecasts for new projects have been systematically biased to underestimate costs and overestimate usage, the report also observes that there has been a “bias towards capital spending over operations and maintenance.” This, of course, has led to the maintenance debacles in the New York, Washington, and other heavy-rail systems.

Unfortunately, the report does not offer a good solution to these problems. For example, one of its recommendations is that “Congress should require each agency to report on their estimate of funding needs over the next 25 years to sustain the infrastructure under its jurisdiction.” Of course, the result will be that every agency vastly overestimates its real funding needs to make sure they all get their “fair share” of any federal spending.

There’s really only three ways to make infrastructure spending decisions. One is in response to market signals: how much do things really cost and will people really pay for them? The second is in response to political signals: who benefits, who pays, and who is most powerful. The third is in response to religious criteria: which projects are supposedly more sacred or moral than others.

The shift in spending from highways to transit has been sustained partly because the transit industry has made itself appear to be more moral than highways, and used that religious feeling to bolster the political support from contractors who benefit from transit spending. The result has been a huge perversion of spending priorities. The only way to cure this is to go back to a market system of paying for all forms of transportation out of user fees, which would insure both better maintenance and less reckless capital spending.

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3 thoughts on “U.S. Infrastructure: Not about to Collapse

  1. LazyReader

    The problem with our nations infrastructure is that we’ve ignored what’s behind us. bBuilding infrastructure that few people use while ignoring infrastructure that really matters is a recipe for disaster. The US’ biggest infrastructure crisis is not it’s Highways, it’s it’s water systems. We do have a water infrastructure crisis and TENS OF billions will have to be spent updating our water treatment plants. Plus our habits, namely dumping plastics at sea, flushing drugs and and pharmaceuticals down the toilet. Our pipeline infrastructure in every major city is over a century old. Our cities have overlooked infrastructure (though politicians constantly whine about environmental issues) repair for decades.

    And it’s reflected in the political regimes that allowed it to decay (Baltimore has pipe bursts nearly on a weekly basis). They’ve lost interest because personal electoral issues are more important than running the city. They care more about LGBTQQIP2SAA (yes thats a thing) and SJW freakouts……….
    You can see it in the current crop of politicians that exist vs the ones long gone. Tip O’Neill isn’t the Speaker anymore…but you could imagine someone like Thomas mowing a lawn or putting up a ladder and fixing some siding. Nancy Pelosi?, Mad Maxine, Diane Feinstein? You kidding they’d break a finger nail.

    Our infrastructure is monolithic, built to a specific size, specific scale, specific timeframe. Look at transportation; Where as the automobile and the street grid are a cellular organism. Look up Dr. John von Neuman and his study of cellular automata; in comparative biology. A multicellular organism does not thrive on a fixed number of cells, instead it responds to stimuli by producing more cells to accommodate a need. The city is the organism, the cells are cars, personal demand is the stimuli. When the system encounters an effluent, it produces more cells (cars) to accomodate the stimuli (people needing to move) or produces special cells (mutli person vehicles like buses or vanpools) to accommodate specific circumstance. In nature all stimuli are confronted with the production of cells. If there’s more sunlight, more photosynthetic cells are produced, if there’s a surge in water, more water storage cells are produced. In the inspiring words of Miss Frizzle from the Magic School Bus “look to mother nature for the best of everything”
    Nature has had billions of years to figure out how to manufacture, design, construct, demolish, recycle, handle waste, transport and provide energy.

    Since it costs tens of millions to repair water infrastructure, hundreds of millions to Upgrade and BILLIONS to build new ones that option is out of the question cause the money doesn’t exist. The era of super sized infrastructure is coming to a close it incurs too much debt, invites too much political corruption; the Money is gone down a financial Black Hole and IT AINT COMING BACK. We’re gonna have to Make New Arrangements.

    https://www.youtube.com/watch?v=hb5YZXYojSU

  2. prk166

    This is a little different but it caught my eye. Jacksonville Florida’ JTA is looking to see how autonomous vehicles could make use of their underutilized skyway. So the old rail adds some rubber to become a hybrid. I’d be curious to know if they’ve looked at what Adelaide Australia has done with buses on guideways.

    https://www.bizjournals.com/jacksonville/news/2017/12/21/jta-opens-autonomous-vehicle-test-track.html

    JTA plans to retrofit the 2.5-mile Skyway infrastructure and build off-ramps to extend the transit system into Brooklyn, LaVilla, San Marco, to EverBank Field and more.

    “This test track is really a test and learn facility,” said Ford.

    JTA Vice President Brad Thoburn said the U2C was the result of years of study.

    “We had to take a hard look at the Skyway and consider what the future of it was going to be,” he said. “We saw that the AV technology was really the place to be.”

  3. prk166


    The city is the organism, the cells are cars, personal demand is the stimuli. When the system encounters an effluent, it produces more cells (cars) to accomodate the stimuli (people needing to move) or produces special cells (mutli person vehicles like buses or vanpools) to accommodate specific circumstance. In nature all stimuli are confronted with the production of cells. If there’s more sunlight, more photosynthetic cells are produced, if there’s a surge in water, more water storage cells are produced.
    ” ~ LazyReader

    Excellent analogy.

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