About that Infrastructure Bill …

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Anyone who has driven on the roads lately or traveled by plane knows that America’s infrastructure could use an upgrade. Fifty percent of Michigan’s state and county roads are rated as being in “poor” condition. State roads are in better shape, but their condition is projected to deteriorate and be in poor condition within the next five years. Flying involves crowded airports and flight delays in part due to too few runways and an antiquated air traffic control system. Thus, the $2 trillion infrastructure bill proposed by the Biden Administration could potentially make a big impact.

The main issue is that only a small portion of the bill is spent on what a typical American would consider to be infrastructure. Only $115 billion of the $2 trillion, or 5.6%, would go toward repairing roads and bridges. This would repair 20,000 miles of roads, which sounds like a lot, until one realizes that there are over four million miles of roads in the United States. Only $25 billion, or 1.25% of the bill would go to airports. Thus, $2 trillion could be spent without the typical American noticing much of an improvement in roads, bridges and airports. This might result in a call for a higher gasoline tax in the future to fix the roads, a tax Americans might be unwilling to pay after seeing such a large infrastructure bill result in little road improvement.

Expanding the definition of infrastructure to include water, electricity and broadband encompasses another $300 billion of the bill. Though there are certainly quibbles about where the money is specifically going under these broad categories, most Americans would recognize these things as “infrastructure.” Yet, infrastructure that even includes these categories remains a minority of the money allocated in the bill.

Where else is the money spent? The bill allocates $400 billion for home health care for seniors, $300 billion to domestic manufacturing, $200 billion for affordable housing, $200 billion for research and development, and $100 billion for workforce development. These do not comprise “infrastructure” in the traditional sense of the word. They may or may not be worthy things to spend taxpayer dollars on, but they should stand on their own merits in a separate bill for public debate, rather than being packed into a bill called “infrastructure.”

The cost of the bill is also a major concern. “Trillion” is the new billion in the COVID-19 era. To illustrate the difference between the two, a billion seconds is 32 years while a trillion seconds is 32,000 years. Thus, the $2 trillion that is proposed to be spent in the bill represents a massive amount of money. It exceeds all personal income tax receipts in a typical year. It would take the proposed increase in the corporate tax rate 15 years to raise this revenue.

Money for things called “infrastructure” should go toward things Americans would recognize as such. Otherwise, they will wonder where all that $2 trillion went the next time they hit a pothole.

 

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