The American Society of Civil Engineers does a flashy study every year called “America’s Infrastructure Report Card.” The wrench-turners give a grade of “D” to the mainly-government infrastructure they examine. Based on the low grade, they ask for taxpayers to cough up another $2.2 trillion so the engineers can fix the supposed mess.
There are two big problems with the ASCE report. The first is that it is devoid of economic thinking. Every infrastructure asset that is old and less than perfect is apparently a disgrace to the engineers. But economists would point out that to maximize our standard of living we generally want to wear out fixed assets pretty thoroughly before we buy new stuff.
Consider America’s automobile stock, which includes everything from brand-new cars to old clunkers. The engineers would probably give the nation’s automobile infrastructure a “D” because it includes many old cars like my wife’s 11-year-old Honda. But it would be hugely wasteful—both economically and environmentally—to throw out all the old cars and give everyone brand new Acuras.
Instead, it’s efficient if car owners compare the likely stream of benefits and costs of their current used cars with the likely stream of benefits and higher costs of possible new cars, and then make an optimal choice. That’s what my wife is doing, but the ASCE would probably give her a “D” grade, castigate her frugality, and insist she immediately blow her savings on a new Rolls Royce.
The other problem with the ASCE report is its naiveté regarding the efficacy of central planning. I’ve discussed federal infrastructure failures in this op-ed and this testimony, but the ASCE seems to believe that all-knowing visionary leaders in Washington can direct us to infrastructure salvation.
Here are some excerpts from the “Solutions” portion of the ASCE report:
Chris Edwards is the director of tax policy studies at the Cato Institute, and editor of www.DownsizingGovernment.org. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.
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