Yesterday I discussed an article from the New York Daily News that called on America to spend more money on infrastructure as that was the "one hope" we had to turn our economy around. My argument was that we already have more infrastructure that we can afford to maintain and that this imbalance, combined with the massively inefficient development pattern it has induced, is the real drag on the economy. Building even more infrastructure on this same model is simply digging the hole deeper.

The obvious response is: okay, what should be done then? If our politicians in Washington are insisting on spending money to stimulate the economy (whether that is the best approach is not something I am going to debate - I'll leave that to the macro-economists), here are some truly bold ideas that would put America on a renewed path to economic prosperity.

  • Require that any community that receives federal subsidies for infrastructure improvements performs an audit on their systems and identifies components that provide a low rate of return. Those parts of the system that cost more to maintain than they generate in tax revenue need to have a plan for either a) generating new growth to pay for the infrastructure, or if and when that growth fails to materialize, b) abandoning or privatizing those segments that are too inefficient to pay for themselves.
  • Require states receiving federal money for transportation improvements (there are 50 of them) to perform the same analysis on their transportation systems. Prioritize funding based on the rate of return that infrastructure investment provides.
  • Invest only in the maintenance of existing infrastructure or in key improvements that can demonstrate a REAL return on the investment (not the imaginary cost/benefit analysis that engineers routinely do, but a financial analysis of the real improvement in property value). Let's not build anything new that we need to maintain but instead make better use of the immensity of what we have. I would target those areas that have the highest rate of return in the state and local analysis that have been performed.
  • Target whatever subsidies we are going to have for purchasing a home to those geographic growth areas that have been identified as having the highest rate of return. We should no longer subsidize inefficient development patterns that will cost us more money to sustain than they produce in return.
  • Put money into retrofitting communities to be Strong Towns. This would mean transforming neighborhoods to be mixed-use with complex, urban streets. Roadways connecting neighborhoods would need to be simple and efficient, which would likely require the closing (purchasing) of accesses and reconfiguring intersections (read our post on the difference between roads and streets). In addition, grossly inefficient areas that have no realistic hope of generating a reasonable level of investment should be proactively abandoned or their infrastructure privatized.
  • Abandon "cap-and-trade" schemes. Instead, build a smart grid that would allow for "congestion-pricing" of energy demand. Sit back and watch the market create massive levels of efficiency.
  • Eliminate the gas tax. To fund roadway improvements, adopt a tax on Vehicle Miles Traveled (VMT) and add congestion pricing tolls to our most congested highways. Sit back and watch the market create massive levels of efficiency.
  • Put money in people, not infrastructure. It is small business filling needs in the market that will get us out of this long-term. There is no way to know what those needs are today - only innovators and entrepreneurs on the ground can figure that out. Small businesses do not require new infrastructure or massive investments in systems. If we are going to subsidize something, I would pay 75% of the salary of a new hire before I would extend unemployment benefits again.

These are my quick thoughts. They by no means encompass the entirety of a Strong Town approach, but you can see the direction we would head. We do these things and, over time, we start to transform our economy into something where new growth generates real prosperity, not simply short-term gains coupled with massive long-term liabilities. We would be using the strengths of a free market to build efficiency and produce returns instead of fighting those strengths by subsidizing inefficient, competing systems.

I'd welcome reaction and any other Strong Towns ideas our readers may have in the comments section.