Correcting a Well-Placed Comment About Public Investment in Infrastructure

The New York Times reported on President Obama’s Miami speech yesterday where he proposed a program of public and private investment to pay for national infrastructure improvements.  The article quotes Ken Orski, the editory of Innovation Briefs and a transportatoin official for Richard Nicon and Gerald Ford.

CALIFORNIA FARMING BACK ROADSKen Orski tells us that back in the 19th century, canals and roads were financed with private money and suggests that public spending did not occur until Roosevelt’s New Deal.

This is not correct.

As far back as the 18th century government — federal, state, and local — invested in transportation.  None other than small government president Thomas Jefferson advocated for federal surpluses to be applied to infrastructure including canals and other “great objects” underway in the nation.  In fact, the Jefferson administration preferred government investment to private for the purposes of enabling free commerce.

Preceding the Civil War, federal investment — those pursued by Jefferson — did decline, but that did not mean private enterprise picked up the slack.  For the most part it shifted to the state level.  States spent nearly 10 times federal investment, but both were large sums for the era, nearly half a billion dollars preceding the Civil War.

Public Private Infrastructure InvestmentThe New York Times article also uses the railroad industry as an example of privately funded infrastructure investment.  This also is not entirely true, especially when you take into account the enormous grants of land.  During the 19th century tens of millions of acres were given to railroad interests which could then be sold or leased for profit to support rail investment.

The only large scale privately funded rail system in the United States was James J. Hill’s Great Northern Railway lines out of St. Paul, Minnesota, but even here there were gifts of land in place.

The point is, since the founding of the United States, government as invested in infrastructure.  The investments increased in the New Deal era and throughout the strong post-World War decades of the second half of the 20th century, but public investment did not begin with the New Deal as Mr. Orski implies and as reported by the New York Times.

Misrepresenting facts makes sensible public policy decisions more difficult as some people are likely to think that we somehow did things differently and better in the past.  It paints the wrong picture because we did, in fact, do things differently and better in the past, but that was not a past reliant more on private investment, it was a past when shared public investment built and sustained a strong America.

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