Lessons from Boston:

Ray Keating As an economist and writer, I always find some interesting fiscal, political or economics lessons to ponder and discuss while traveling – much to my wife’s chagrin. That certainly was the case on a trip to Boston this past weekend.

Boston provided lessons regarding government and infrastructure.

Reaching various points of interest in the city – including our hotel -- was quite a challenge given the now-infamous “Big Dig” project. The Big Dig’s official website calls the project “the largest, most complex, and technologically challenging highway project ever attempted in American history.” I have no doubt this is the case.

When my wife and I first went to Boston in 1996, construction on the Big Dig had been under way since 1991. It was a mess then. Now, seven years later in the summer of 2003, it’s still a mess. Also consider that planning for the Big Dig began in 1982. So, from planning to its now projected completion by 2005, this project will have spanned almost a quarter of a century.

The project’s website goes on to assert this massive infrastructure project “will dramatically reduce traffic congestion and improve mobility…, improve the environment, and lay the groundwork for continued economic growth.” Of course, reality always turns out quite different from what government bureaucrats and planners claim. When this project is finally finished, there might be some improvement on traffic issues, but there will be little, if any, real benefits to the environment or economy.

Indeed, one must question if the benefits will ever come close to matching the costs. For more than a decade, Boston has been a nightmare to navigate. We spoke with a few people who live just outside the city, and they told us that the Big Dig has led them and others they know to avoid coming into the city. Indeed, how many people will have avoided Boston for more than a decade due to this project? So much for helping the economy.

Then, of course, there are the incredible cost overruns of the Big Dig. It was originally projected to cost about $3.4 billion. The final bill is now estimated at almost $15 billion. Many have re-named the project the “Big Pig.” By the way, a big chunk of the cost – about two-thirds – comes from federal taxpayers. Most of those taxpayers will never drive on these new roads in Boston.

In a February 2000 article in the Christian Science Monitor regarding Big Dig cost overruns, David Luberoff, a public works expert at Harvard University, declared: “It’s not unusual for a project to wind up costing four or five times more. But if you are honest with the voters, it’s possible some worthy projects wouldn’t get built.” No doubt, such an arrogant view is held by many supposedly serving the public.

Another thought to keep in mind as the Big Dig labors forth is government’s inability to maintain assets.

On Sunday, we took a boat tour on the Charles River. As we passed under several bridges, decay, rust and graffiti were quite evident. Most striking, a couple of bridges had huge sections of concrete missing, though our tour guide assured us that these spans were structurally sound.

As we were set to turn the boat around, though, the guide pointed to a pedestrian bridge just ahead that also spanned the river. She noted that this bridge, unlike the others we had seen, was in excellent shape. Why? She told us that the decaying bridges were under the care of the city, while the rather pristine walking bridge was kept up by Harvard University.

So, my trip to Boston reinforced the very straightforward lesson that when government runs things, quality degrades and all kinds of costs rise. Those costs include lost time trying to circumvent road construction, lost economic activity due to road projects laboring on for years, cost overruns for taxpayers, and bridges falling apart.

In the end, the grand benefits claimed by government planners and politicians regarding massive infrastructure projects must always be viewed skeptically. The costs projected at the outset generally will turn out to be far higher, and many of the benefits will prove to be illusory.

Raymond J. Keating is chief economist for the Small Business Survival Committee, and co-author of U.S. by the Numbers: Figuring What’s Left, Right, and Wrong with America State by State (Capital Books, 2000).

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