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

John Stossel's road rage: why can't we rely on private companies to rebuild?

March 12, 2009— -- It's part of the stimulus plan. The government has announced it's going to spend billions of your dollars on building new roads, and fixing old ones. They say they'll do it efficiently. I say, bull.

Some people call the traffic jam on the way to work … driving into hell.

Joseph Woo of Atlanta told us he has the most miserable commute in America.

The Texas Transportation Institute, a research division of Texas A&M, says Atlanta is America's second-most-congested city.

"You plan your day around traffic," Woo said. "Because you never know if there's going to be traffic or not. You have to leave an hour and 15 minutes in advance. This is why I don't drink coffee. If I drank coffee, my head would probably explode!"

Reason TV host Drew Carey went on radio station KFI AM 640 to search for the person with the worst commute in Los Angeles, the most congested city in America.

"Traffic goes all the way back in each direction blocks and blocks. There's no end in sight to it," he said on the radio. "And like a lot of places in America, it's only going to get worse."

In 2007, the Texas Transportation Institute found that traffic jams caused the average commuter to spend an extra 38 hours on the road and, according to the latest data from the U.S. Census Bureau (2003), the average commute takes 25 minutes.

Research by the Reason Foundation suggests that in 20 years, 29 cities will be as bad as Los Angeles.

We teamed up with Carey because he and Reason TV are frustrated with big government bull and they're searching for other ways to get things done, things like improving our daily commute. Carey and Reason TV eventually decided Los Angeles' most frustrated commuter is graphic artist Josh Lipking.

Every day Lipking checks out Sigalert and Google traffic before kissing his wife good-bye and driving into what Carey calls "hell."

Private Road-Builders Offer Solutions

Lipking says he "starts to sweat a little," his heart pumping as he tries to make the most of the time he spends in traffic. He's become proficient at flossing with one hand.

Josh lives only 16 miles from work but it often takes him an hour and a half to get to the office.

But what if his commute (and yours) didn't have to be this bad? What if someone wanted to add some lanes to this road, or build an entirely new road?

Private road builders are doing this kind of work across the world, such as the double-decker underground highway in Paris, complete with 350 cameras watching for traffic delays or accidents. Any incident is detected in less than 10 seconds. Once the camera detects a problem authorities rush to tow the obstacle away so traffic keeps moving.

They do the same thing in California, too, on at least one road: Highway 91. Instead of building a brand-new road, they added two lanes in the middle of an existing highway. Drivers can choose to use them, or not.

If you want to go this fast, you have to pay. Different amounts depending on the time of day. Sometimes $1.50, sometimes $9. But by paying you save time. Traffic moves. And for some people, time is money.

Were these traffic speeding innovations created by government road-builders? No. They were created and paid for by private road-builders.

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.