INFRASTRUCTURE

When Congress passed the $787 billion stimulus bill in 2009, it was sold as an instrument for job creation, an historic investment in the nation’s infrastructure. Supposedly, Americans would be put to work quickly and the economy would get a boost for years to come. It didn’t work out that way, partially because the projects that were supposed to be “shovel ready” weren’t. But the idea that taxpayers must constantly fork over billions to government to fund roads, bridges, high speed rail, and internet infrastructure is rarely challenged in any significant way.

In fact, a lot of people who strongly oppose big government back off that position when it come to public funding of infrastructure.

The president argues for government “investment” in infrastructure, saying it’s crucial to the nation’s economic recovery. In his now-infamous July 2012 campaign speech in Roanoake, Virginia, President Obama said, “If you’ve got a business — you didn’t build that. Somebody else made that happen.” He was referring to the fact that people move goods on public roads, and information over the internet, and take advantage of all sorts of infrastructure built by others.    The fact that companies depend upon these things becomes part of the argument that government must grow because businesses need government to be successful.

But, in a recent Wall Street Journal op ed, two historians help us put this into perspective.

Larry Schweikart, Jr. is a history professor at the University of Dayton and Burton Folsom, Jr. is at Hillsdale College. They point out that auto makers like Henry Ford “put a car in almost every garage” well before the 1956 passage of the National Interstate and Defense Highways Act. They write that, “…the highways came as a byproduct of the entrepreneurial genius of Ford and others.” In fact, auto and auto parts makers built private roads before the federal and state governments began building them.

Drs. Schweikart and Folsom point out that before the 1860’s practically all railroads were privately financed and built. And, they write, “Public airports did not appear in large numbers until military airfields were converted after World War II.” Robert Fulton built the steamboat in 1907. But, state-built canals lost money and were sold to private enterprises.

The professors’ point is that building infrastructure was not the engine of growth but a result of growth that had already taken place in the private sector. The government role in building infrastructure was important only after the market grew so large as to demand it.

Government has a role in funding infrastructure. But taxpayers are asked to do this too easily, sometimes for projects that are either obsolete, wasteful or unproven. The White House claims an outsized role in growth     and is therefore not an honest broker with the business community. The private sector has more incentive to make wise decisions about what infrastructure is needed. Often, they’ll build it themselves.

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