Time | Fareed Zakaria | Are America's Best Days Behind Us?This article is all over the place, but this passage in particular stood out to me as an example of something I hear a lot which bugs me. Lots of people tell me the key to growth (or one of them, to be generous) is infrastructure. What infrastructure are we talking about here?
The problem with the U.S. government is that its allocation of resources is highly inefficient. We spend vast amounts of money on subsidies for housing, agriculture and health, many of which distort the economy and do little for long-term growth. We spend too little on science, technology, innovation and infrastructure, which will produce growth and jobs in the future.
I understand in general how infrastructure can create growth. If I live in some one-cow-town in India I'm not going to start making ... I dunno, awesome footstools shaped like integrated circuits .... unless I have some way of receiving parts, and orders, and electric power, and sending products out. So yeah, I would appreciate some more infrastructure to make that possible. Pretty much any infrastructure improvements in a place like that would probably improve growth.
But we're not that place. What do you think of when I say "infrastructure"? Bridges and highways and phone lines and ports and things, right? What specifically are we lacking in America that is holding people back from starting and growing businesses?
Something like WiMax? Or driverless cars? Those would result in plenty of growth opportunities. But if that's what you want, say we need more spending on wide area wireless internet or automated vehicles, not just infrastructure in general. If you mean we need money for electric vehicle charging, or updated air traffic control, or better electric grids, then say so. When people try and sell me on "infrastructure" in the abstract, I'm pretty sure we'll end up spending my money repaving sidewalks and giving better pensions to bus drivers and building light rail lines which will never cover their operating expenses to say nothing of capital costs and planning 55mph trains that proponents will call "high speed" between two podunk towns no one goes to in the middle of California.
Are there some some places we could use a wider bridge or an extra highway? Sure. But there are also a lot of places where we'd build those things wouldn't cause any growth at all. I'm not so confident Congress could tell the difference between one and the other. Infrastructure isn't some silver bullet to spur growth.
"Infrastructure" isn't some monolithic pile of stuff. We can't throw money at it to make the pile grow. Infrastructure is a collection of discrete things, some of which may be worthwhile and some of which won't be.