The Interstate Highway System - Economic Boon or Shackle Around our Neck?

I recently took a vacation in Northern Wisconsin. For the last stretch of the trip on the way up, we traveled on a two-lane highway. Occassionally however, there was a passing lane that alternated between each side of the highway. Given the hilly nature of the road, I assume the main intent was to increase safety so that frustated drivers behind slow-moving trucks or other traffic would not be tempted to pass in the path of oncoming traffic.

It got me thinking though - how many of our lesser-traveled four-lane highways (especially the flat ones where reducing the incidence of passing in dangerous areas is not as serious of a concern) could be replaced with these 2-lane roads with alternating passing lanes? How much money would we save on long-term maintenance if we did? Would traffic flow less freely than on a four-lane highway and by how much?

On the way back from our vacation, we decided to take mostly two-lane highways back, rather than driving a bit further to get to the four-lane divided highway. I hesitated to do so, because of the potential for getting behind slow-moving traffic and having our trip take longer (which is not such a fun thought when you have two young children in the vehicle). Along the way, I noticed the remnants of our pre-Interestate Highway system - small towns every 10-20 miles where gas stations and small shops were able to take advantage of their location along the roads most traveled by vacationers.

That got me thinking again about something my colleague in this blog (Chuck) made mention of during a KAXE interview awhile back - the idea that when you first build a road, it generates economic growth, but the ongoing maintenance and even expansion of the road generates very little in additional economic growth. Certainly, the explosive growth of automobile traffic and better built highways in the 1950s and 1960s spawned growth in small towns - gas stations, resorts, small craft shops, etc.... Just as certainly, the advent of four-lane, divided highways shortly thereafter (i.e. our Interstate Highway System) spawned economic growth as it became easier for people and commerce to travel between our nation's metropolitan areas. But now that they are essentially built, can we really expect them to spawn any more economic growth? And with the funding source for maintaining the system in steep decline, are we simply shackling ourselves with more highway than we can afford to maintain?

A simlar point was made in a 2004 article in Fortune magazine in a discussion of our Interstate Highway System's history. The author states:

So was the $114 billion worth [the cost of building the interstate highway system]? Probably. John Fernald, a senior economist at the Federal Reserve Bank of Chicago, has studied the performance of "vehicle dependent" industries like construction, trade, and services during the Interstate-building boom and found that they made huge productivity gains. "Building an Interstate system that tied the economy together turned out to be extraordinarily productive," he says. "Highways complemented the flexibility of the internal combustion engine, so that firms found it much easier to do business away from train lines or natural ports." But as far as Fernald can figure, the productivity boost was a one-time event. Once most of the highway network was complete, more road spending didn't generate similar productivity gains. (emphasis added)

So do roads have to continually generate new economic growth to justify their existence? Of course not. But it does raise some interesting questions about how we spend money on getting people around.

I will be exploring several questions over my next several posts in relation to the big picture issue of how we as a country invest money in our trasnportation network. It may not seem directly related to our primary topic of building strong towns, but if you stick with me I think you'll find out just how important it is. The four questions are:

1. Now that we have created the main wave of economic growth by building the Interstate Highway System, can we afford to continue maintaining it?

2. Is our current Interstate Highway System overbuilt, particularly in the more rural stretches of our nation?

3. Does continuing to add lanes to the urban sections of the Interstate Highway System (in the name of relieving congestion and preventing economic losses associated with wasting time in traffic) represent our best investment in our economy?

4. Just what is the primary goal of our transportation investments anyways? Relieving congestion (aka adding lanes)? Reducing travel times (aka more lanes and higher speeds)? Reducing deaths? Economic growth? Preventing economic decline?

For those who might think this exploration is simply a roundabout way to convince readers that we should all be riding in trains and light rail and that freight should be moving by rail instead of in semi-trailers, that is not my intent. Our highways are an essential and necessary part of our transportation network. I do not intend to explore these issues with the goal of findings ways to get people out of their cars and onto mass transit.

Also, realize that exploring these questions for me is truly that - an exploration. I do not pretend to be an expert on federal and state transportation policy. So I will be learning a bit as I go in this myself and those of you who may be more educated in this arena than I are certainly welcome to comment as we go.