"Disasters Waiting To Happen"
by Louis Uchitelle

Source:  The New York Times, September 11, 2005.
http://select.nytimes.com/search/restricted/article?res=F60815FB38550C728DDDA00894DD404482

             Part of the economic role of government, described in Chapter 7 of your text, is the provision of public goods and services, including economic infrastructure.  Economic infrastructure refers to public goods and services that reduce private economic costs.  For example, the government builds roads and bridges with taxes and user fees (like tolls) because they spark economic growth by making it easier for us to do business with each other.  (Imagine how much higher prices would be if we still had to ship all of our goods on dirt roads!)

             However, spending on public infrastructure has been falling.  As voters have become hostile to tax increases and politicians have tried to cut any discretionary spending, many public works projects have been delayed.  This leads to minor inconveniences like potholes and major disasters such as weakened levees and dams that cannot sustain flooding rains.  Even our aging highways are responsible for 13,000 fatalities each year, according to this article.

             Cutting taxes enables individuals to spend more money on private goods and services, indicating that there can be a trade-off between public and private expenditures.  Yet, the impact of Hurricane Katrina in New Orleans also dramatized how much our private wealth (including homes) is dependent upon the quality of public goods and services.  Finding the right balance between public and private spending is a critical economic challenge.

• List all the examples of public infrastructure mentioned in the article.  Can you think of other examples?
• Note that the article measures government spending on public infrastructure as a percentage of gross domestic product (GDP).  Why is this more useful for comparisons over time than looking at dollar amounts