Title: Infrastructure Investment | Downsizing the Federal Government
Headings: Infrastructure Investment
Infrastructure Investment
Federal Infrastructure in Perspective
Problems with Federal Infrastructure Spending
Global Trend toward Privatization
Privatizing Federal Infrastructure
Removing Barriers to State and Local Privatization
Conclusions

Content: 6 Federal Reserve economists examining IRI data found that “since the mid-1990s, our nation’s interstate highways have become indisputably smoother and less deteriorated,” and they concluded that the interstate system is “in good shape relative to its past condition.” 7
Problems with Federal Infrastructure Spending
There are frequent calls for increased federal spending on infrastructure, but advocates ignore the inefficiencies and failures of past federal efforts. Here are some of the problems: Investment is Misallocated. Federal aid for infrastructure is mainly based on formulas and political factors, not on marketplace demands. Thus, highway aid does not favor the fastest-growing states that need it the most. Airport aid favors smaller airports, not the largest airports that have the most passengers. And Amtrak investment is spread around to low-population areas where passenger rail makes little economic sense. Every lawmaker wants an Amtrak route in their state, so investment gets directed away from where it is really needed, such as the Northeast corridor. Infrastructure is Utilized Inefficiently.