A Better Way To Pursue Infrastructure Spending

As the New Messiah's infrastructure pork barrel has rolled into Congress this week, conservatives everywhere worry about the waste and corruption sure to follow in its wake. Congress has already passed several hundred billion dollars worth of road and bridge spending bills following the collapse of the Minnesota highway bridge two years ago. How could we possibly still need even more of this spending?

As Frisco Nan and Harry Reid blathered about the necessity of this Federal spending orgy, my conviction that it is exactly the wrong thing to do has become ever stronger.

What else might one do if infrastructure repairs and improvements truly are necessary?

Well, other pundits have observed something that concerns me, as well. That is, states and municipalities find dozens of 'necessary' projects when someone else- the Federal government and other states' taxpayers- pays for them. In fact, in this sort of game, the winner is the one who loads up his request with the highest dollar amount of projects, since taxes from other states will be, in effect, paying for them.

Therefore, the best way to avoid the waste we've already seen in this infrastructure bill is to approach it in an entirely different manner.

First, make the originating state or municipal authority issue bonds for the projects. After all, if they are truly economic in nature, and will improve business volumes, add jobs, or otherwise improve and enlarge economic activity, then a bond issuance should make sense. If not, the project isn't worthwhile on its own merits.

Where the Federal government can help is to offer, for a price, bond insurance. By using an objective scoring mechanism for risks, costs and benefits, bond insurance could be provided less expensively by the Federal government, thus reducing borrowing costs for the local authorities. After that, the actual raising and paying off of the invested amount is in the hands of the requesting communities, as it should be. There's no reason why Federal money should be borrowed for local projects, when the locales can do the same.

In this manner, the Federal debt level doesn't rise, and only projects which communities feel they can actually pay for will be built. No ice skating rinks in Texas or prostitute service projects in California.

As it now stands, thousands of communities, and the states, are behaving like the spending authorizations are coming from somebody else's money. Which is ultimately not true. As citizens, we'll all be liable for repaying all of this dubiously-spent largess from additional Federal borrowing, or inflation-creating printing of more dollars to pay for these projects.

There is a better way to assure Americans that whatever infrastructure projects are put forth are truly economically viable. Shouldn't we try that, instead of wasting so many tens of billions of dollars of taxpayers' money?