Not grading on the curve: the White House's infrastructure report cards

Since at least 1988, the American Society of Civil Engineers (ASCE) has maintained what they call an Infrastructure Report Card that highlights critical shortcomings in the nation's public built environment.  The reasons for this are pretty obvious:  civil engineers and the construction industry in general live on the development and maintenance of infrastructure, and because so much of it is paid for by government funding, which in a democracy is supposedly under the control of the people, you should let the people know what they ought to be spending money on, infrastructure-wise. 

The ASCE report-card list found itself blinking in the spotlight of publicity last week when the Biden administration lifted it bodily and made it part of their promotional efforts to pass a multi-trillion-dollar spending package that is focused nominally on infrastructure.  The ASCE's definition of infrastructure and the Biden administration's definition are two different things.  To the best of my knowledge, the ASCE has no public position on the government's funding of child care, for example, but there is money in the spending package for that.  Let's focus on the grades themselves, though, and what role public engineered infrastructure plays in the body politic.

As someone who has handed out grades for more than thirty years, I would not be caught dead with a grade roster like the one the ASCE gave out.  The highest grade was C+ and the lowest was D-.  The first problem is that what you might call the dynamic range is very limited.  Whatever criterion was used to obtain the grades was rigged to produce basically the same score with only minor variations from state to state.  It's easy to guess why the ASCE avoided the extremes of the grade scale.  Giving out A's would be the same as saying, "You're fine, no need for any public works projects next year."  And an F would say that a state's infrastructure is a total failure.  I've been in one or two places around the world where something like those conditions prevail, but even Puerto Rico (the lone recipient of a D-) is better than that.

But why no B's?  I guess the ASCE wants to create at least some sense of alarm even in the states with the best infrastructure, such as Georgia or Utah.  There's enough variation in the grades to make people want to see how their state did, which is the main purpose of the exercise.  Beyond that, I don't believe there are too many profundities lurking in the various grades for the different states.  And thirteen states didn't even get a grade, either on the ASCE's own ranking or the identical one handed out by the White House. 

Looking beyond the short-term publicity aspect of the situation, what is the proper role and scale for public spending on engineered infrastructure?  There are extremes on both ends of the political spectrum.

Absolute libertarians would have us live in a totally private world -- private companies would build roads and bridges, even municipal infrastructure like water and sewer systems, and the only publicly funded activities would be outward-facing things such as national defense.  I'm not aware of such an extreme being tried on a large scale in recent history anywhere in the world, and anyway, the complications of getting hundreds of bills every month for every little thing you did would be nightmarish from an individual point of view.

On the other extreme is socialism, in which everything from infrastructure to retail to manufacturing and services is run by the government.  Unlike extreme libertarian regimes, people have tried strict socialism a number of times, most spectacularly in the old USSR.  That regime gave rise to unprecedented misery and death and collapsed in 1990, which is not a strong recommendation. 

Most governments of varying political stripes tend to a mixture of private and public investment, as has been the case in the U. S.  During the 19th century, the main transportation network was built by private railway companies, which were however heavily subsidised by the federal government and eventually regulated by the first quasi-independent executive-branch agency, the Interstate Commerce Commission.

The railways were displaced in the 20th century by roads and eventually the Interstate Highway System, which was a federal-state partnership that most would agree was a success, though it forever changed the face of America.  President Eisenhower, who was one of the Interstate's main proponents, had the good fortune to propose his system at an all-time high of national prosperity, but we don't have that advantage now.

Nevertheless, the Biden administration is proposing to pay for the approximately $4 trillion infrastructure bill with higher taxes, mainly on corporations.  Corporations can pay higher taxes only if they charge higher prices, or else go out of business.  Neither eventuality is desirable from the consumer's point of view, but one or another will have to happen, probably some of both.

There is one school of thought that says the federal government could pay for true infrastructure improvements by simply printing money (or borrowing it from the Federal Reserve, which in my limited understanding of finance amounts to the same thing).  Distributist John C. Médaille claims that this move would not be as inflationary as it sounds, because the expansion of the economy that results from improved infrastructure would absorb the rise in the money supply.  If twice as much money is injected into an economy which soon produces twice as much value, any inflation will be temporary.

Médaille's theory would seem to apply mainly to new infrastructure, not just repairs on the same old infrastructure we've been putting up with all along.  But it's an interesting thought, and would avoid some of the negative consequences that higher corporate taxes will surely have, such as companies fleeing the U. S. altogether.  Another of Médaille's principles is that if you tax something, you're going to get less of it, and I don't think we want fewer and less profitable corporations, but that's what you'll get if you raise their taxes.

Other things being equal, fixing America's broken infrastructure is a good thing, but how to pay for it is a problem with no easy solution.

This article has been republished with permission from the Engineering Ethics blog.


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