In California, I hear a lot about a “structural deficit” and how we are spending “too much” on social programs with “spending formulas” that outpace our tax revenues.
In the meantime, the state constantly raids our transportation funds, our power grid is inadequate, our port security is lacking, etc.
Now, I’m all in favor of trying to provide healthcare for all, funds for the disabled, for education programs, and the like. I haven’t done any studies on it, but it makes sense to me that social spending as part of a state’s infrustructure is a wise investment. For example, I think education spending can help prevent the need for law enforcement and corrections spending. Spending money on child support enforcement reduces the need for “welfare” or AFDC spending. Spending money on preventative health care can reduce the need for emergency room spending, etc.
However, I think sacrificing transportation, power, port security, and other “hard” infrastructure spending in favor of these other items is backwards. Highways, high speed rail, a solid power grid, etc. all “grease the wheels of commerce” help attract employers to the state, help create private sector jobs, and help generate more tax revenue that can be used toward these other noble programs.
Doesn’t it make sense to get our highways and rail transit systems up to date first?
Of course it does, which is why those programs are cut. That way, the governor and the legislature can point to it and say “we need to raise taxes so we can buildnew roads, upgrade our power infrastructure, etc…”
It’s just liek when there’s a funding crisis at local school district level. They cut back on the services that everyone wants, and make them cost extra to receive (pay to play sports, for example).
I can only assume from the lack of opposition that what I suggested makes sense. So, why isn’t it done?
My uneducated guess is lobbying. There are no real powerful interest groups rallying around good transportation and power grids. However, if this kind of infrastructure spending benefits business, creates jobs, and generates tax revenue, why aren’t business, labor, and public interest groups effectively pushing for it?
Actually, the situation is very simple to understand. Everyone agrees that both social programs and infrastructure are important funding priorities. But there are major disagreements as to which is the HIGHEST priority.
Just as an example, my wife is a teacher. While she’d be the first to say that the roads need to be fixed, you’ll never get her to say that money should be taken from the education budget to pay for it. Everybody has their own idea about what the money should be spent on first and it happens that in the current political climate infrastructure is not at the top of the list.
The only infrastructure, in general, paid for by the state are roads. Ports are funded through shipping fees, power lines are privately owned, railroads are privately owned etc. Unless California’s roads are really bad there probably won’t be too much economic activity created or destroyed based on infrastructure funding. Plus, infrastructure is one of the few things that can be put off without consequence. In other words, if you delay making repairs or upgrading old roads you can still get the benefit if you do the project 5 years later.
On the other hand if you cut funding for welfare programs you can’t get the effect back. For example if you cut an anti-gang program and gang membership rises 5% as a result you can’t undo that effect by increased later spending. Those 5% are going to be in jail, dead, unemployed, etc. Same thing for education. If you cut something out of the 5th grade curriculum then those kids miss out on it forever.
Any organization that runs into budget trouble, i.e. companies, non-profits, governments, etc., the first thing they do is cut back on non-essential maintence, and put off/eliminate long term non-essential. Obviously if you keep cutting long term projects eventually you will be in trouble, but “eventually in trouble” is a lot better than “in trouble”.