America’s infrastructure is fast becoming second rate. Yet, billions of private dollars are available to invest in infrastructure, new technology makes charging user fees easy and reliable, and there are plenty of examples from around the world (and often within the United States) showing that the private sector can provide infrastructure more efficiently than the government.
So what is the problem? The government doesn’t have to provide infrastructure. It simply has to get out of the way.
Half the airports in Europe are privately owned – and they are newer and better than the ones in America. The highways in Spain and France are privately owned and they have no potholes and little congestion. Air traffic control systems around the world are mostly private, including the one in Canada, and they use better technology and are much safer than ours. Here is Colorado, E-470 points the way since its construction required no state or federal funding and its expenses are covered by highly efficient tolls.
Private ownership and user fees are a vastly superior method for building, operating and funding infrastructure. This creates the right incentives for both the owners and users of the facilities. It removes infrastructure funding and maintenance from the constraints of the political process and public budgets. It also replaces public sector wastefulness and cronyism with private sector expertise, discipline and incentives.
I am not suggesting that all infrastructure can be provided by the private sector. There are still areas where infrastructure cannot be provided efficiently by the private sector. However, technology is steadily reducing the areas where the government is the only possible provider.
What do we need to realize this vision of an infrastructure that is a good as the smart phone that you use every day? We have to remove the federal regulations that make it hard to charge user fees or to create private infrastructure, including the sale of existing infrastructure to the private sector. We have to privatize federal infrastructure to the extent possible, starting with the air traffic control system. We have to get the Federal Government out of the infrastructure business and make the states and local governments responsible. We have to level the playing field between private and public sector providers of infrastructure by eliminating tax-exempt financing. We have to repeal special interest-legislation, such as the Davis-Bacon Act, which imposes higher costs for infrastructure. And we have to learn from the mistakes made in other countries – and, yes, mistakes were made – when creating or privatizing infrastructure.
Above all, we have to streamline the regulatory process for approving infrastructure. The Empire State Building was built in a year and 45 days. The Hoover Dam was built in less than five years, even though it required the invention of a new process for drying cement. China recently built a train station in nine hours. The only thing stopping us from matching these accomplishments is the government.
Finally, we have to stop the nonsense of treating infrastructure as a jobs program. If anything, there is a shortage of the type of workers needed for infrastructure, particularly in the areas where we should be building or upgrading it. This is not the Great Depression and we don’t need a new WPA. We also have to stop encouraging states to delay infrastructure investments and maintenance in the hopes that another “shovel ready” Federal boondoggle will be coming. In the public sector, infrastructure will always be subject to these irrational pressures; we need to liberate it.