John Stossel: Billions of Tax Dollars on Roads? That's 'Bull'

Their success has made politicians from other states want to try leasing roads. Mayor Richard Daley did that with the Chicago Skyway. Indiana Gov. Mitch Daniels leased the Indiana toll road to a private company. He got back billions for his taxpayers.

"We received $4 billion, free and clear, no taxes, no debt left to our kids," Daniels said during our interview in January about the lease agreement signed in 2006.

It sounds like a good idea to me. But most people can't even imagine the idea of leasing out one of their roads to a private company.

Politicians Who Want to Use Your Tax Money for Roads

When Florida considered leasing one of its roads, protesters complained and politicians shelved the idea.

The governor of New Jersey gave up too, and a private highway idea is dying in Pennsylvania and dead in Texas.

Now billions in stimulus spending is supposed to fix-up decrepit, congested roads. Why is Washington rushing in to do something that private companies do better and pay for the privilege?

Rep. Peter Defazio, an Oregon Democrat, is one of many who oppose leasing public roads to private companies. He says what Gov. Daniels did is wrong.

"Privatizing existing taxpayer infrastructure is not a solution for anybody," Defazio told '20/20.' "Money that the people of Indiana could have had in the future is going to go to a private company."

When we later interviewed Daniels, he wanted to know, "What money?"

"The toll road was losing money," he said.

And if you couldn't make money running the toll road, how can this private company do it?

"Your first insurance that they're gonna run a better road than the politicians did is, if they don't, people won't drive on it and they'll lose a lot of money. They have every incentive to make traffic flow swiftly, to make that drive as pleasant and safe as possible," Daniels said. Without that incentive, government bureaucracies often let highways fall into decay.

Defazio disagreed. "If you have toll roads, the [government] toll authority, if properly run, can meet all of those requirements," he argued.

But do they?

'It's a Monopoly'

"I can't account for the crummy government in Indiana or Pennsylvania," Defazio said. "[But] they could run them better. They could run them just as well as the private sector because the private sector runs it well and makes a profit."

Daniels disagrees. "Frankly when government runs things, it's a monopoly and it has no competition and there's no upside to doing a lot better job."

Government road building has created some of the biggest boondoggles of all time. The Big Dig in Boston took more than 10 years to complete and cost more than twice what it was supposed to cost. And the government contractor's work was so sloppy, part of it collapsed and killed a woman.

After part of the West Side Highway in New York collapsed, it took the city 16 years just to dismantle the old highway and another decade to rebuild it.

So why do so many people instinctively just say, you can't sell the public highways?

"There are people frankly, in Congress, who can't abide the thought that you might be able to pay for something without going down there and kissing their ring for the money," Daniels explained.

But except for these few exceptions…private roads are mostly dead, because protesters and some politicians don't like it. Get ready to stay in traffic hell.

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