This post is on spending on civilian physical infrastructure and how its changed by Presidential administration since the early 1950s. Kind of a follow-up to PGL’s post from earlier today, but using data from the White House Office of Management and Budget Table 9.3: Given the recent bridge collapse, and the disaster that was New Orleans in the wake of Katrina, I think it makes sense to focus on non-defense related expenditures. The table divides spending into categories: direct federal spending and grants, the latter presumably being to state and local government. Direct federal spending, in turn, is broken out by “defense” and “non-defense.” I assume the vast majority of spending via grants is for non-defense purposes. So I’m going to assume that spending on non-defense Physical capital investment is made up of direct federal spending for non-defense purposes, and spending via grants.
So, without further ado, here are three graphs: federal receipts as a percentage of GDP, federal outlays as a percentage of GDP, and surplus or deficit as a percentage of GDP.
Here are summary tables.
What we get from this… spending on infrastructure was pretty piddly when Ike took over. But Ike was impressed by the German autobahn system, and went on to start construction of the freeway system we have today. (Being a notorious commie, Ike was usurping the role of the private sector, who no doubt would have built the freeway system cheaper, better, and faster.) As a percentage of GDP, spending on non-defense infrastructure stayed more or less constant until the Reagan era, when it dropped, and its been more or less constant ever since. (My guess is that its not as constant as the graphs make it look… that’s probably more a function of the lack of granularity of the data in the table.) Clinton did increase spending on infrastructure as a percent of the budget even while shrinking the budget as a percent of GDP. GW has done the opposite.
Spending is a matter of priorities. And infrastructure has not been a priority for decades. Which is a pity, because spending on infrastructure is a matter of investing in the future. You can make the finances look very good in the short term by ignoring long term problems (i.e., cutting spending on infrastructure) a la Reagan, but it has long term consequences. The only two administrations to do any appreciable cutting of spending as a percentage of GDP, Ike and Clinton, understood that – hence, they also were the administrations that increased spending the most on non-defense physical infrastructure as a percent of the amount they did spend.
I note also that precedent matters. Ike set a precedent, and it was followed for a while. Reagan set another (lower) precedent, and that’s been more or less followed ever since. Should we be surprised that bridges collapse given the precedent that is being followed? I don’t think so. I think our luck may just now start be running out and we have one more price to pay for Reaganomics coming due, and this one may cause more damage than the price we’re paying (and paid so far) for his runup of the debt.
Next post in the series… It occurs to me I’ve been remiss and left out an obvious post for this series on Presidents, and I’ll be correcting that oversight.