California folklore has it that once upon a time, wise government in Sacramento and sensible taxpayers planned and funded forward-looking infrastructure mega-projects. Then in about 1978, mean-spirited tightwads voted for Prop 13, cutting property taxes and the golden age ended. Gov Schwarzenegger will soon be asking for bond measures so that neglected and underfunded projects can again be implemented.
There are some problems with the tale. First, public officials have ways of wasting the funds and the cost-effectiveness of their choices is always open to question. "Chaos Reigns at Model School ... Newly opened South L.A. High has Big Mac's. a chef's kitchen and a ballet studio. It also has drugs, guns -- and gangs posturing on the quad," reported the LA Times. Not a case of underfunded infrastructure.
A highly politicized school board cannot deliver no matter how gilded the buildings. Meanwhile, far away from the Left Coast, "Indiana Gov. Mitch Daniels has embarked on an ambitious plan to lease the Hoosier state's 157-mile toll road to a private company in order to save money and improve the condition of the road. The plan calls for a 75-year lease to an Australian-Spanish consortium that will pay Indiana $3.85 billion to maintain and collect tolls on the road." The Bluegrass Institute provides the details. No new taxes.
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Japan's dual economy is made up of a world class export sector and an overregulated domestic sector. The U.S. economy includes a dynamic private sector and a sluggish public sector -- but with some exceptions.