Lawmakers are considering extending temporary payroll tax cuts. But the policy is based on faulty Keynesian theories and misplaced confidence in the government's ability to micromanage short-run growth.
The American Society of Civil Engineers does a flashy study every year called “America’s Infrastructure Report Card.” The wrench-turners give a grade of “D” to the mainly-government infrastructure they examine. Based on the low grade, they ask for taxpayers to cough up another $2.2 trillion so the engineers can fix the supposed mess.
When I testified to the Joint Economic Committee yesterday, the subject of bridges came up again and again. Numerous people said or implied that our bridges are crumbling and falling down, and that more funding was desperately needed.
I testified to the congressional Joint Economic Committee on Wednesday regarding infrastructure, which means roads, bridges, pipelines, railroads, and other such assets. Here are some of the points I raised:
In the Washington Post, Steven Mufson does a nice job describing how Solyndra is just one of many energy subsidy failures of recent decades.
One reason to shift infrastructure financing to the private sector is that governments and their contractors often give taxpayers the shaft. They say a big project will cost a certain amount, but then the project gets underway and they reveal that—whoops!—the project actually costs much more. No one gets fired, the money has been spent, taxes and debt have been increased, and officials move onto the next boondoggle.
My Washington Post op-ed on federal infrastructure yesterday elicited a large and vigorous response. The comments on the WaPo site and emails to my inbox were about 80 percent in opposition to my views.
In a recent television ad for her network, MSNBC host Rachel Maddow stands below the Hoover Dam and asks whether we are still a country that can “think this big” — Hoover Dam big. The commercial is built on the assumption that American greatness is advanced by federal spending on major infrastructure projects.
Under the U.S. Constitution, the federal government was assigned specific limited powers, and most government functions were left to the states. To ensure that people understood the limits on federal power, the Framers added the Tenth Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Those delegated powers are “few and defined,” noted James Madison.