About a month ago I wrote a column arguing for a conservative infrastructure program.
Instead, a conservative approach to infrastructure would begin with a question: What are some projects that we actually need to fund? We all know by now that “shovel ready” projects are rare. So we should take some time to actually figure out which projects offer the highest value to society. We should put in place a multi-year program of infrastructure investment, not sugar-economics Keynesian stimulus.
I argued that this “conservative infrastructure program should prioritize a conservative goal: Helping the working class to rise.”
What, specifically, could this help look like? We know that urban areas characterized by a high degree of socioeconomic segregation often have relatively low mobility rates and high unemployment rates. One way to support employment and earnings is to spend money on transportation infrastructure to connect low-income workers with jobs.
The economist Stan Veuger has written a response to my argument, disagreeing strongly.
But what is not reasonable is to treat each “public” good as requiring provision by the government.
Sometimes this is because the good is not actually public in an important sense. Highways or shipping ports, for example, can easily be financed through user fees, and whoever does not want to pay these tolls can be kept from using them. Why my esteemed American Enterprise Institute colleague Michael Strain, for example, does not understand this is a mystery to me, but his love for buses may have something to do with it.
Dr. Veuger digs deeper than attacking me, posing the question: “Why then do people get tricked by superficial cost-benefit comparisons” in deciding whether a public project should be undertaken?
To find out his answer, read his column.
— Michael R. Strain is a resident scholar and economist at the American Enterprise Institute. You can write to him on Twitter at twitter.com/MichaelRStrain.