Do we really need the feds to spend billions on “infrastructure” projects? You might think from the breezy rhetoric that the country has been forgetting to take care of its roads, bridges, and so on, but that isn’t the case at all, as Don Boudreaux points out in the letter below.
One reason why Obama and his cronies clamor for this spending in particular is that under the Davis-Bacon Act, all such construction projects must be done at “prevailing wages,” which means that non-union competition isn’t allowed.
Mr. Quinn Klinefelter, Reporter
Marketplace
American Public Media
Dear Mr. Klinefelter:
On today's Marketplace Morning Report, you told how "Teacher Robert Brown likes
President Obama's call to ... create new jobs by rebuilding America's crumbling
infrastructure" ("Detroit hopeful for jobs action from Obama").
If America's infrastructure truly is crumbling, the culprit isn't reduced, or
even stagnant, government spending on infrastructure. As the New York Times
reported on November 19, 2008 about infrastructure, "money isn't the main
problem." We learn why elsewhere in the report: "Government spending on
infrastructure fell after the construction of the Interstate highway system, but
has risen gradually over the past 25 years."* Indeed, such spending - not only
absolutely, but also as a percent of GDP - was higher in 2008 than it had been
at any time since 1981.
And note also: these facts combined with the economic crash of 2008 should
caution you and other business reporters against accepting so gullibly, and
without ample qualification, the commonplace assertion that government spending
on infrastructure is an economic stimulant.
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
