Current highway finance practice finances most improvements out of current revenues, eliminating
the need for borrowing. If highway users — who are also highway investors — don’t have to pay
interest on capital improvements, why should they be charged for it? The reason is that money
deposited in a highway trust fund earns interest at whatever rate the U.S. Treasury is paying, and
that interest is foregone when money is spent. There is no way to pretend that capital investments
have no opportunity cost to the funds committed to them. Equally important, the amount spent one
year bears little relationship to the value of the capital consumed in that year. If the system is
wearing down faster than it is being rebuilt, for example, current users are living off of previous
users/taxpayers who built up the capital stock.