The Trump administration took its first steps to address infrastructure Tuesday, with the president signing an executive order aiming to expedite environmental review and permitting processes. Some will decry the fact that these actions weren't accompanied by a multi trillion-dollar spending bill. With treasury yields so low, the narrative goes, we can borrow massively to finance new bridges and airports, repair crumbling highways, create jobs, and boost economic growth, all while locking in rates that make doing so very affordable. Further, this idea seems to enjoy bi-partisan support. However, government infrastructure spending is far from the panacea it is being made out to be, all too often resulting in money flowing to political allies and massive cost overruns.

First, it is important to note that the largest barrier to infrastructure development is not an unwillingness to invest from the private sector. Instead, the biggest roadblock is a combination of environmental regulations, NIMBY-ism, and local permitting that can drag projects out for years and significantly increase building costs. The president's executive order is a concrete step toward solving this.

These exact issues have been a major impediment to much needed upgrades to commercial rail, seaport, bridge, and water infrastructure nationwide. With the opening of the recently widened Panama Canal, seaports and their private sector partners estimate they will need to spend $155 Billion on upgrades to accommodate larger ships and cargo volumes. However, the opposition from local communities, competing industries, and air regulators has been fierce. In the LA area, BNSF looks ready to abandon its major project following 10 years and $50 million in costs. Similarly, Union Pacific claims it has been in "environmental review purgatory" for nearly a decade in LA and Long Beach, while CSX has stated publicly that the permitting process alone can take double the time of actual construction for its port projects.

And these challenges aren't just confined to the private sector. Gone are the days of the New Deal when much of the country was still undeveloped and the federal government could undertake major projects with minimal opposition. Last year, it was announced that the California high speed rail project that was partly financed by President Obama's 2009 stimulus bill would be delayed another four years. In fact, the Associated Press reported that, as of March, no track had yet been laid. Many of these delays have been attributed to lawsuits, opposition by local farmers, and bureaucratic red tape. As a result, the new estimated cost for the project has now risen to $64 Billion, nearly double the original $33 billion estimate.

But how about state and local government infrastructure projects? Surely they can undertake these projects more efficiently than Washington.