I go to school just outside Boston, and my family lives near Philadelphia, so I do a fair amount of travel between the two cities. Lately, I’ve noticed one bothersome change – the amount of traffic created by construction projects has greatly increased the length of the drive. Given the poor shape most state budgets are in, and the emphasis on infrastructure spending in spending stimulus funds, my intuition says that the stimulus funds are financing this construction, which is in turn causing traffic.

Now, my trips are done later at night – I usually work during the day, have dinner, and pack before getting on the road. I’m usually traveling between 8 p.m. and midnight, since it fits my schedule and will theoretically minimize rush hour traffic issues. The favored time to do this roadwork, however, is overnight, when it impacts fewer people than during the day. As much as I don’t like that, at least there’s some forethought there.

One of the dangers of the government allocating funds as it will is that the need for economic value to be created might not be considered. We will spend in the name of taking action, even though taking action is more costly than not doing so, in terms of opportunity costs – the money must come from somewhere, after all.

It’s a fact of life that roadways need to be maintained, and I’m not arguing that. But if less-than-necessary work is being done in the name of “creating jobs” or “investing in America,” all the costs need to be included. There’s little good that can be said about traffic jams, but they do offer plenty of time to think, and this thought experiment occupied me during a recent construction-induced backup on I-84 in eastern Connecticut one evening.

The total time I sat in traffic, which I’m defining as a speed below 10 m.p.h., was 40 minutes – this excludes, for example, when the road was closed down to one lane, but traffic flow was moving along around 40-45 mph. During that time, I traveled about 2.5 miles of road that was bumper-to-bumper across three lanes of traffic, and a half mile that was two lanes of traffic of similar density.

According to this from Edmunds.com, the average mid-size sedan in 190 inches (15.83 ft.) long, and the average length of a trailer truck is 80 feet (various sources). I’d say about 15% of the traffic on the road with me at that point was trailers, giving an average length of 25.45 feet for vehicles on the road. Assuming 10 feet between vehicle in either direction, and each vehicle takes up 35.45 feet – meaning 149 vehicles would fit in one lane one mile long. Approximating that for the number of “lane-miles” (8.5) yields 1266.5 vehicles in the traffic jam with me at that point in time (about 10 p.m., for the record). If there are 1.2 adults per car, then 1520 adults had their time wasted by sitting in traffic caused by road renovations; with Connecticut’s minimum wage of $8.00/hr. (being conservative), I calculate that it costs $12,150 in lost time per hour wasted, or $8,000 for the 40 minutes I sat in traffic.

These assumptions were meant to be conservative (i.e. not counting wasted gas), and it makes me wonder whether or not we’d actually be better off just dropping money from helicopters as stimulus, rather than making busy work that creates negative externalities. Since we’ve clearly committed to trying to carry trade the economy back to profitability, we might as well take the next step in forming the Hedge Fund of the United States and find the best relative value opportunities.

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