Obama's Proposed Investment in American Infrastructure
President Obama proposed yesterday spending more than $50 billion over the next six years to modernize the transportation infrastructure in the United States. He is calling for renovations to or creation of 150,000 miles of roads, 4,000 miles of rail, and 150 miles of airport runways. The $50 billion would be an up-front cost, paid by closing tax breaks for oil and gas companies, and would comprise the bulk of the cost.
The American Recovery and Reinvestment Act of 2009 (the 2009 economic stimulus) designated $105 billion for infrastructure improvements last year, and coincidentally, the $7 billion spent from 1936 to 1939 by the Works Progress Administration mostly on similar projects would be the same as spending $105 billion in 2009 thanks to the effects of inflation. We would assume that the results of the ARRA should mirror the results of the WPA.
The WPA provided jobs, crucial infrastructure upgrades, and even major cultural advances, even though critics say some of the money was wasted. The positive effects also took some time to be realized, though it had a relatively immediate effect on jobs. In a tough political climate, Obama wants to speed the process and provide more jobs by infusing more capital into infrastructure projects.
The proposal may be a moot point as a law to authorize the spending might never be passed by Congress. But if it does, and it survives similar to the president’s proposed form, it carries some interesting ideas. First, an infrastructure investment bank would be created to determine which projects receive funding, supposedly based on return on investment, not political connections. Investment in smarter roads and high-speed rail lines would allow the United States to become competitive with other developed and developing nations around the world who have already seen these technological advances.
On a practical level, improving roads seems to be an endless project. Not far from where I live, US Route 1 in the New Brunswick area has been in a constant state of construction. The Route 1 intersection with Route 130 in North Brunswick was finished to remove traffic lights a few years ago, and besides planned intersection upgrades throughout the Route 1 corridor, the past year traffic has been slower due to a project to widen the highway as it passes near Rutgers University.