The Driving Force Behind Infrastructure Spending

Economics writer Stephen Moore was printed in the Wall Street Journal in 2009. Moore stated that he used to visit Milton Friedman and his wife, and together they would dine at a favorite Chinese restaurant:

"At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: 'You don’t understand. This is a jobs program.' To which Milton replied: 'Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.'"

This is the foundation of an assortment of problems that accompany government spending projects to create infrastructure jobs (though this example may be hyperbolic).

Brad Plumer, an author at the Washington Post's Wonkblog, published an article recently, which was titled "The U.S. government keeps predicting we’ll drive more than we actually do." You can find it here: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/22/the-u-s-government-keeps-predicting-well-drive-more-than-we-do-thats-a-problem/
The basis of his argument is this graph, which records predicted number of trillions of miles Americans will drive in certain years vs. the actual amount driven:

Plumer argues that this kind of blatantly incorrect prediction by the U.S. Department of Transportation has had disastrous consequences on American infrastructure spending and policy-making. He fears we have fallen into the Milton Friedman trap. However, I have to disagree.

Alan Pyke of Thinkprogress published this graph in November last year:

An Economist article from last year found similar results specific to spending on highway and road maintenance and building.

The amount of money spent on transportation infrastructure in the United States has declined more than 2.4% per year for the past decade, despite DOT predictions that we will be driving 25% more than we actually do. We aren't paying 25% more people than we need to build more roads with spoons. We're drastically decreasing the number of infrastructure jobs, perhaps even falling in line with Plumer's wants.

I don't really have a point to make with this blog post. I just thought the discrepancy between predictions (and increased associated cost with more predicted drivers) and reality was interesting.