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President Donald Trump has proposed a trillion-dollar plan for infrastructure investment. The plan calls for public-private partnerships in which the federal government invests several hundred billion dollars to rebuild the nation's infrastructure, with the bulk of the investment coming from the private sector. The Trump administration maintains that for many years the nation has underinvested in infrastructure, particularly in surface transportation, and that massive new investments are now required to rebuild and expand infrastructure. Trump argues that the injection of federal dollars into infrastructure development will jumpstart the economy and spur long-term economic growth.
Most studies reveal that the current state of the nation's infrastructure is poor, to say the least, and that rebuilding infrastructure will be extremely costly. One estimate found that rebuilding the highway system alone will require nearly a trillion dollars in investment projects over the next two decades. However, it is not clear that the federal government should undertake this infrastructure investment, because the federal government has a poor track record of effectively managing and completing such projects. For example, a number of studies reveal that federal investments in surface transportation have been or continue to be allocated inefficiently, incurring costs that exceed benefits, and there are many studies showing how special interests steer federal dollars toward unworthy infrastructure projects.
Contrast - Government - State - Governments - Track
In contrast to the federal government, state and local governments have a better track record for investing in infrastructure. Research shows that state and local governments invest more efficiently in highways and mass transit compared to the federal government. This is largely because state and local governments prioritize the most important transportation infrastructure projects and invest dollars in projects where benefits are likely to exceed the costs. When state governments invest in projects that do incur losses – e.g., privatization of the Indiana interstate highway – they...
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