How to Fix America's Infrastructure
As of 2017, the state of American infrastructure, is, to put it bluntly, pathetic. The American Civil Society of Engineers gave the roads, bridges, drinking water and other infrastructure elements of the richest nation in the history of mankind a D+. This is for a number of reasons. America’s airports are dirty, uncomfortable, and overcrowded. Our roads are congested. There is a grand total of 225 miles of high speed rail in a country of 300 million people (as of 2009, but nothing has changed), compared to 12000 miles of high speed rail in China. America suffers from hundreds of thousands of water main failures annually, and the Flint water crisis has still not been resolved. As a result, productivity suffers and America fails to unlock its full potential.
The simplest solution to this problem is also one of the most ineffective. Many have proposed simply throwing money at the problem - deficit spending on infrastructure projects - in order to fix America’s ailing infrastructure. This is because in general, government fails at doing things efficiently. As an example, Boston’s “big dig” project to improve Boston’s traffic by replacing a six lane highway bridge with an eight lane tunnel was intended to cost 2.6 billion dollars. It instead costed 24 billion dollars, was delayed numerous times, and suffered from numerous technical failures, such as bad lighting fixtures or tunnel misalignment. California’s high speed rail project is estimated to cost 64 billion dollars, and assuming tickets are sold at an average of 86$ a ticket to 10,000 riders annually, would take 204 years to break even. Fact is that public officials cannot spend money adequately. They have no personal interest in government infrastructure projects, nor are they competent enough to adequately coordinate the construction of a multi-billion dollar project that requires technical skill and ingenuity.
On the flip side, while the private sector is perfectly capable of adequately constructing infrastructure projects, they do not have the resources. Only Apple, Google, and a small handful of other companies have billions of dollars of cash lying around, waiting to be spent. Most companies simply don’t possess the capital to build expensive projects such as highways, railroads, and airports.
Thus, the competence of the private sector must somehow be connected with the capital and resources of the Federal government. There is one possible institution that could achieve this - a national infrastructure bank, as proposed by Barack Obama during his presidency. This bank would work by taking anywhere from 10-20 billion dollars in startup money from the Federal budget, and loaning it out to companies that wish to undertake infrastructure projects that provide both a clear benefit to the public and a feasible method of generating income. Additionally, the private company would need to put up more than 50% of the capital it deems necessary to complete its infrastructure project. This bank would essentially allow for private companies to get the money in order to construct projects beneficial to the public, without going 800% over budget or being delayed by several years. The bank has the additional benefit of not adding to the national debt in the long run, since the loans will eventually be paid back.
The bank certainly isn’t a perfect solution - unprofitable endeavors will not be undertaken, even if they do benefit the public - but it is a step in the right direction. By connecting the best of both the private and public sectors, a national infrastructure bank offers the right solution to fixing America’s ailing infrastructure.