In­fra­struc­ture spend­ing will spur growth.

The Washington Post Sunday - - OUTLOOK -

The Amer­i­can So­ci­ety of Civil En­gi­neers an­nu­ally is­sues a “re­port card” on the con­di­tion of Amer­i­can in­fra­struc­ture. Ac­cord­ing to this year’s re­port, we are not in good shape. What could fix our D-plus grade? The so­ci­ety re­ports that we need to close our “$2.0 tril­lion 10-year in­vest­ment gap” with a healthy round of in­fra­struc­ture spend­ing. Ac­cord­ing to the Trea­sury Depart­ment, these kinds of in­vest­ments are im­por­tant for “spurring growth.”

Dur­ing the global fi­nan­cial cri­sis, econ­o­mists saw in­fra­struc­ture spend­ing as a bet­ter op­tion than “throw­ing money out of he­li­copters” — metaphor­i­cally speak­ing — to goose the econ­omy. They may have had a point at the time, but these days, U.S. eco­nomic growth is not par­tic­u­larly slow, so speed­ing it up would prob­a­bly take more than spend­ing on in­fra­struc­ture (or throw­ing money out of he­li­copters). And though the con­di­tion of our ex­ist­ing in­fra­struc­ture is gen­er­ally ap­palling, that’s a re­pair and main­te­nance is­sue, not a re­sult of too lit­tle in­vest­ment to be­gin with. (If we have got­ten to the point of call­ing fill­ing pot­holes and re­paint­ing bridges “in­fra­struc­ture in­vest­ment,” then we have a big­ger prob­lem than we thought.)

Fi­nally, it’s not clear that an in­fra­struc­ture boom would nec­es­sar­ily re­sult in eco­nomic growth, es­pe­cially not in the short term, when big projects can slow things down. For in­stance, a re­cent study of Uber trips in Mel­bourne, Aus­tralia, demon­strated that ma­jor trans­porta­tion projects are cre­at­ing sig­nif­i­cant traf­fic con­ges­tion. “You’ve got these very large projects . . . that have a short­term im­pact on the travel pat­tern of a city,” Bren­dan Lyon, chief ex­ec­u­tive of In­fra­struc­ture Part­ner­ships Aus­tralia, told a Mel­bourne news­pa­per. And since con­ges­tion can slow eco­nomic growth, big projects shouldn’t be de­ployed with short-term growth gains in mind.

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