Why Private Infrastructure Investment Is Bad for America
Soon President Trump will deliver a State of the Union speech calling for a public/private infrastructure vision as devoid of specifics as the idea of public/private infrastructure is devoid of any benefit over traditional projects.
For decades American politicians have undervalued the return on infrastructure investing by the public sector because, you and I dear voters yawn about infrastructure and complain if taxes rise due to it. I get literally thousands of wide eyed alerts for this or that progressive cause, but nary a whisper about the things as boring as seawalls to combat inevitable sea level rise, or a smart electric utility system set up to accommodate widespread solar and wind generation. Until we stop focusing on the glitz and the tweet wars no one will remember the truly important and so very boring topic of infrastructure.
But with our roadways, tunnels, and bridges getting a grade of “D” by the American Society of Civil Engineers and our transit systems living in a dream world where all problems could be solved by adding another lane to the highway, we must address both vision and financing.
As for the vision, redoing the solutions of the 1950’s will guarantee that global warming will literally wash away much of the work. The goal of infrastructure investment shouldn’t be recreating the same archaic transit systems, or simply replacing the old electric grid with a newer version of the same thing. My vision would be to find new ways to move people to and from work so that private vehicles are used for the “last mile home” so to speak, or in urban areas not at all. From roadways to train tracks to our power grid and every other infrastructure investment, we need to meet the future problems of sea level rise and other global warming effects head on. Otherwise we fail the future and just waste our money.
I will say this upfront, I am talking about the public sector investing trillions of dollars. Any politician worth their salt should run away from that sentence, because without you and I signing petitions clamoring for the investment, this idea is dead on arrival.
The latest fad in public sector financing is to implement a series of regressive fees and then institute profit oriented solutions that would increase the cost to Americans because it would increase the profit for the few. Instituting Mileage Based User Fees on highways, a classic trope of conservative thinking on the issue, would just export the financing burden from government to the middle class. Of course if you’re wealthy you could pay a bit more for the premium lanes on the highways of the new America.
The other financing option corporate America loves would allow private investment to shoulder some of the upfront costs so they can recoup money for decades and decades in the form of tolls, outright government payments or, usually, both. And most of these agreements come with clauses that only benefit the corporation involved. One Virginia project stipulates that if too many people use car pool lanes, thus reducing the profits, Virginia will pay the companies involved. After a terrible sweetheart deal in Indiana ran afoul during the Deregulation Depression, the companies involved filed for bankruptcy, a new private company came in, and voila fees on the road doubled.
The only way to do public financing is to tax gasoline, all carbon use, and institute a progressive income tax rise on the 1% and unfortunately on the rest of us too. There’s no sugar coating this, if America wants to have modern transit systems, with sleek trains going hundreds of miles per hour and dams that don’t fail, and solar and wind farms that generate electricity, we need to pay for it collectively. I know it sucks, but the private sector will still get to build the projects, they’ll just have to deal with public oversight and public financing and the loss of billions in excessive profits.