Money for Something

What if for one year — just one year — we allocated as much money for infrastructure as we did for defense?

What if? Well, this year, that would mean devoting $680 billion to investments in infrastructure. That’s more than $200 billion more than Oberstar’s entire proposed transportation reauthorization bill, which was itself a large increase over the previous transportation law. There’s probably no way we could spend all that money at once, but it would nicely capitalize an infrastructure bank, and the promise of a steady flow of funds would get states thinking about real, long-term investments.

With that kind of money you could entirely build out a national network of true high-speed rail. One year’s worth of defense spending gets you that. Which makes one wonder: where are all the economists, wringing their hands over cost-benefit analyses of these defense expenditures? Does anyone doubt that the net benefit of $100 billion spent on high-speed rail is easily higher than that for the last $100 billion spent on defense? Have a look at this if you’re unsure.

And while the gains to new investments in infrastructure (and not just in transportation) would be large, it isn’t as though we lack critical needs. What was the cost, human and economic, of the I-35 bridge collapse? Of the Metro crash and resulting limitations on service? Of the Bay Bridge shutdown? And of course, investments in infrastructure constitute positive contributions to the economy, which ultimately strengthen our ability to direct resources toward defense. Aimless defense spending, on the other hand, may well make us poorer and less secure.

I don’t get it. I’ll never get it.

Comments

  1. Doug says:

    Good idea. Of course, we’re in an and era, not an or era. Why not do both?

  2. Jeremy says:

    Have you seen this? http://www.apta.com/resources/reportsandpublications/Documents/economic_impact_of_public_transportation_investment.pdf

    I only browsed through the findings, but they argue that $1 billion in infrastructure investment would create 36,000 jobs for a year, not to mention all of the other economic benefits.

    I don’t know what to make of the source, or the methods, but it’s an interesting report.

  3. This paper compares spending on different priorities to defense including transit on job creation.

    http://www.reconnectingamerica.org/public/download/jobcreation

  4. Reid says:

    Maybe if we described that bridge collapsing in Minnesota as our infrastructure “suicide bombing” us, than we’d get that much money.

  5. Thomas says:

    In particular I always wonder why the United States Navy is allowed to be as big as it is. It could literately take on every other navy in the world and send it to the bottom without too much trouble. Throw in the fact that most of the real navies around the world belong to allies and the margin of superiority that the US Navy enjoys is even more ridiculous. I’m sure 10s of billions could be taken out of the US navy alone.

    I make this particular point since I’ve been reading a lot on how the British Navy maintained its dominance without ruinous expense.

  6. Maybe I’m in the wrong place, but isn’t the I-35 bridge collapse, the Metro crash and resulting limitations on service, and the Bay Bridge shutdown the responsibility of the State and other localities involved, not the Federal Government?

    It sounds to me like what is being suggested involved the Federal Government getting its nose into more and more responsibilities that should, according to the Constitution, be left up to the State and local governments.

  7. Ryan says:

    Not to quibble with the details, but this is also assuming that Metro and the Bay Bridge are competently and efficiently run, isn’t it? Having lived in both DC and SF, I wouldn’t consider those givens (especially Metro). DC also has some of the highest spending per capita on their students with especially dreary results. Is the logical conclusion then that we’re spending too much on Afghanistan and not enough on DC schools? I doubt it. And if we’re going to argue that expanding infrastructure would create jobs, isn’t the more important statistic the net gain once you factor in defense job losses?

    For the other commenter’s point about why our Navy is so enormous and why our military is so expensive, I think it’s also important to remember that our military is facing competing demands … part of the cost of our military is us investing heavily in technologies that keep our soldiers from getting killed … Predator drones, satellite technology, radar detection, missile defenses … these are all things that allow us to increasingly conduct military operations in a way that protects our troops. The future of warfare will be increasingly computerized and mechanized, further pulling our troops out of the line of fire. Isn’t this worthwhile?

    Our Navy is so enormous because it’s the backbone of our force projection capabilities and has been the guarantor of our ability to effectively and rapidly intercede anywhere in the world, if necessary. And while we would be able to defeat any other Navy in the world right now, again you have to start calculating cost/benefit analysis … the Chinese navy is from every observable perspective improving dramatically in quality and effectiveness and as they do the potential losses for the United States in the event of conflict will go up as well.

    All of this is exclusive of a discussion of what military tasks we undertake as a country. Arguing that Iraq was an unjust war is something I would agree with, but that is a different argument than whether our troops need to maintain a qualitative edge in the event of a conflict. If you want to argue that the United States shouldn’t be the world’s police, again, that’s another argument you can take up with Pres. Obama, but as long as our leaders expect our troops to be able to intercede anywhere at any time with force and in a way that protects American lives, I’m generally in favor of the incredible cost.

    This, of course, isn’t to absolve our military which is, like Metro or any other government body, inclined to maximize resources coming in, but not efficiency coming out, but merely to say that blindly stating, “gosh, what if we took all that money and built roads!” is a little too simplistic and utopian for me. Removing Iraq should hopefully take down our costs and hopefully we’ll be investing less in large-scale traditional warfare and more in technology that can benefit society as a whole (see Japan) in the future, but overall I’m comfortable with our massive investments in military technology. Perhaps the time has passed for the United States, but I’m not convinced of that.

  8. Robert Schrader says:

    You really don’t get it. You are so naive that I don’t even think that I could have a real conversation with you. If we stopped all defense spending for 1 year, there wouldn’t even be a United States after 1 year. Another country would take us over for sure. We cannot depend on anyone else for our defense. Do you think the U.N. would stop them?
    If we suspended all defense spending, we would have 0 military. Nobody would work for nothing, especially for a whole year, so every single person would quit and we would have zero defense. We wouldn’t even have any fuel for our defense missiles, or anyone to fire them. Don’t think for a second that China, Russia, Venezuela, North Korea, or even Cuba wouldn’t be able to attack

    Iraq and Afghanistan would instantly descend into chaos, civil wars would kill untold millions and terrorists would have safe havens just like before 9/11. The US military is the greatest peace keeping force in the world. The US is the only thing stopping China from invading Taiwan, North Korea from invading South Korea, Russia from retaking former Soviet satellite states (All of Eastern Europe).
    Do you know what happens when there is a sudden power vacuum? Violence, and only whoever kills the most and strikes the most terror in peoples hearts dominates and subjects all others to their power.
    Without a defense for even one year, there wouldn’t be a US anymore. National defense should always be the federal governments first priority.

  9. I’m an economist, and wanted to chime in (assistant professor of economics at baylor university in waco tx). I think Robert’s point is an important one – reduced spending on national defense has costs. Namely, we would be sacrificing whatever the national gains are those $680 billion are buying us. So, that’s security, but also bargaining position in negotiations, etc. We know from smaller studies done on the effect of police on crime that police deter criminal activity, so by extrapolation, we’d like see an increase in the kind of international crime of various sorts if we reduced spending down to zero.

    The real question is not, though, such extreme shifts. You should spend on national defense up to the point where the marginal dollar yields a marginal benefit that is exactly equal to the next best alternative of that dollar. So, in other words, the goal should be an efficient allocation of resources across areas of spending such that the cost/benefit ratio is the same (at the margin) for all spending goals. That, I suspect, is where you want to make your argument, because I feel pretty good in guessing that the US probably spends too much (or too little) on national defense *at the margin*. We typically think that the spending is too low in the free market for public goods, but too high when government provides it, as the political process does not guarantee efficiency and has incentives in place that can encourage wasteful use of resources (rent-seeking, principal-agency problems, etc.). But, I think you’re probably right – at the margin, there’s probably an inefficient spending on defense. But I’m not sure whether it’s too little or too much.

    Provocative post nonetheless.

  10. ryan says:

    Reading comprehension, folks. I said “as much” for infrastructure as defense.

  11. JesryPo says:

    Of course the point of this argument is to provoke thought by making a comparison, not to suggest that January 1 we eliminate all funding of the DOD.

    I think a corollary investigation would be to compare the spending on Iraq and other conflict/security measures for the defense of currently necessary resources such as oil supplies (as distinguished from the physical defense of our people/property) with the projected benefits (particularly reduced oil consumption) of investing those resources in urban transit and high-speed rail.

    It comes back to choosing our investments wisely: extremist Islamist despots or Canadian train builders…

  12. Andy K says:

    You underestimate our “defense” spending by 40% – you need to include all we spend on “intelligence”, the VA, the dept. of energy, NASA etc.

    We spend more on “defense” than the rest of the world, combined. We spend more on “intelligence” than China + N. Korea + Iran spend on defense.

    Anyone who can’t see that we over spend on defense is not taking a serious look at the facts.

  13. jason says:

    i think it’s funny that somebody thinks cutting defense spending for a year or two would invite an attack. that’s naiveté in my book. who would invade us, canada? the u.s. is geographically insulated. it is far too big for anybody to occupy, and it really isn’t in anybody’s best interest to try.

  14. Drew says:

    Robert, I can’t believe how paranoid you are. You really, honestly believe that China, whom we are the largest trading partner of, would attack us? That would cripple our economy, and subsequently China’s as they depend on us buying their junk.
    And North Korea isn’t EVEN CLOSE to being able to tack over a country. It would be way to complicated and costly and their population would likely rebel as they already are starving and can’t afford war.
    Also, when have Russia, Venezuela, and Cuba ever indicated that they wanted war? They would also have to bankrupt themselves to take over America.
    AND FOR CHRIST’S SAKE,”The US military is the greatest peace keeping force in the world.”!?!?!? WHAT TYPE OF DRUGS ARE YOU ON? America has gone to war more times in the past 50 years than any other country by far. We created the messes in Iraq and Afghanistan and we are funding the Israeli apartheid. We have had a role in the overthrowing the government of EVERY SINGLE government in South and Central America expect Brazil and Mexico, including many democratically elected ones. And don’t forget how we overthrew the democratically elected leader of Iran and the 50s and replaced him with a military dictator. And the sad part is that many of these conflicts were just to protect our precious industries.

    PS China wouldn’t be invading Taiwan, the two have been getting along the best in 50 years at least. N. Korea wouldn’t invade S. Korea, the latter is about 10 times more powerful.

    PPS Also, none of your conflicts would occur because all leaders know that they would cause A THIRD WORLD WAR! Think sometimes!

  15. $680 billion would not only get the high speed rail, but go a long way to building a modern electrical grid to deliver clean energy to run it on.