Not Content with $5T added to the National Debt, The President Wants to Spend More
Fox News is reporting that the President’s State of the Union Address will call for more spending on infrastructure and highways to help us become more competitive in the global economy.
And all along, I thought that the ‘shovel ready’ projects of the Stimulus were supposed to be doing that already. Oops! The shovel ready projects weren’t actually all that ready, after all. In fact, Recovery.Gov shows that the Department of Transportation has only spent about $25B of the $44B available for stimulus projects. If infrastructure is so critical, how did it become only 5% of the total stimulus cost? If they couldn’t come up with ready projects two years ago, what is different now?
The General Accountability Office issued a report in 2008 titled “Surface Transportation: Restructured Federal Approach Needed for More Focused, Performance Based Sustainable Programs”that basically showed the roughly $57B expended by the SAFETEA Act of 2005 was being poorly managed and diffused among a lot of projects that were of little impact.
According to the Heritage Foundation, experts maintain that about $80B per year needs to be spent to upgrade the quality of our highways. For the only year I could find facts from the Federal Highway website, total spending on highways in 2006 was $161B, of which about $78B was spent on construction capital projects and $40B was spent on maintenance, so that seems to be about right. Given the inertia in bureaucracies, I find it hard to believe that funding since 2006 has been dramatically changed, especially lowered, given the massive budgets of the last 3 years.
So why do we need a dramatic call from the President for more spending? And what will he tell us to convince us that the money will be well spent, based on the experience with the Stimulus Bill and the GAO study in 2008?
On Recovery.Gov’s website, one of the projects proudly highlighted is a $23M grant for “urban trails” that don’t seem to have a great deal to do with exports and global competitiveness. I’m sure there are dozens more projects like this that also have little to do with our exports.
Frankly, in all the news articles and videos I’ve seen over the past 3 years, I can’t think of a single story that featured someone saying “The reason I can’t hire people or export more products is the highways or rail system doesn’t work.” In fact, it seems to be the exact opposite: CSX has plenty of ads showing how their rail system efficiently and “greenly” transports millions of tons of freight every year, and our busy seaports like Savannah, GA are already making improvements. In fact, I also spend a lot of time on interstate highways in Georgia and I can personally attest to the fact that they’re already being expanded and maintained and there is a lot of truck traffic hauling goods today. The only time that hasn’t been true is when the price of diesel fuel approached $5 a gallon and put many trucking companies out of business.
So, the President needs to make a very strong case that: 1) The money we’re already spending isn’t enough; 2) The money we’re already spending isn’t being wasted, and future spending won’t be either; and 3) We aren’t adding additional debt to the already insane amount we already have.
I fully support the President’s idea that we should be manufacturing and exporting more goods overseas. I just don’t think that throwing more money at infrastructure will have a significant impact, just as we’ve seen thus far with the stimulus spending.
What we need first are laws and tax rates that ensure our manufacturing base has access to economic labor, raw materials and energy. Taking these steps would rescue our economy and help reduce our overwhelming debt.