A good project for America right now would be to invest in our shrinking and congested freight railway system.
Our highways are not free; they cost roughly $32 million per mile. A large portion of this expense is caused by either expanding them to meet increased trucking needs, or repairing them due to the damage caused by trucks.
On the other hand, a single train can move as many containers as 280 trucks while using one-third as much energy.
A recent study found that an investment in improved rail infrastructure would get 85% of all long-haul trucks off the nation's highways. Due to efficiencies and reduced fuel expenses, it would also leave the nation’s economy 13 percent larger by 2030.
So why don’t the railroads build the infrastructure they need? America’s major railroad companies are publicly traded companies answerable to shareholders. So asking them to incur these new expenses would be like asking the trucking industry to entirely pay for our roads and highways.
So is nationalization the answer? Perhaps not (but other countries have successfully done it).
What the government can do is make creative use of public/private partnerships. For example, it could provide loan guarantees to the railroad to improve its lines. Also, reduced capital gains taxes for investors in rail infrastructure could help direct capital to where it is needed. Flat-out grants, akin to federal highway money, would also be appropriate.
I'm not talking about bailing out a failing industry, but about helping an expanding, more energy-efficient one to grow fast enough to meet pressing public needs.