How Efficient; Is Current; Infrastructure Spending and Pricing?

Congested highways and airports, collapsing bridges, deteriorating roads, periodic water shortages, and suspect waste disposal facilities bear silent witness that the infrastructure of our nation, currently valued at close to $1 trillion, is inadequate. To shore up America’s foundations, many economists and policy analysts have urged the federal government to increase spending substantially. The urgency of the problem, however, does not preclude the need to ask whether the current use of facilities is efficient, whether choices about how current facilities are used are possible, and how current use will affect the efficiency of new facilities. In fact, surprisingly large benefits are to be gained from making efficient use of our current infrastructure by pricing it and investing in it efficiently. Efficient pricing and investment will reduce the need for massive public investment and will prevent the recurrence of infrastructure problems. The primary reason why the current facilities are gravely deficient is that they are priced in ways that do not reflect economic costs and designed in ways that result in higher life-cycle costs of use. In their anxiety to address the infrastructure problem, policymakers are pushing policies that, if adopted, would indefinitely foreclose consideration of efficient pricing and investment. Congressional renewal of the gas tax in 1991, for example, would perpetuate a method of