Trump’s $1.5 trillion infrastructure plan is another bait and switch. For starters, it’s dead on arrival, since Congress just concluded a two-year budget deal after massive horse-trading. Legislators are not about to reopen negotiations.
It’s bizarre that Trump releases his budget after rather than before this deal. It’s one more sign of his irrelevance.
As for the proposed infrastructure plan, it proposes $200 billion of actual federal spending over a decade. The rest is supposed to be private money, with the idea that a federal match will somehow coax out private investment—at a ratio of 6.5 to one.
But here’s the problem. True investments in public works do not produce private returns. That’s why they have to be public.
For private investors to make money on long term investments in things like better electrical grids, green transition, water and sewer, protections against storm surges and sea level rise, replacement of aging bridges, tunnels and roads, better rail, and so on, investors want large profits.
And there are only three ways to get those profits. You can pass the costs along to taxpayers. Or you can pass the costs along to ratepayers. Or Republicans at the federal and state level can rig the tax code so that massive tax breaks can be offered to private investors.
All of this is more costly and less efficient, as well as less fair, than straight ahead public investment funded by direct government bonds or taxes.
This is dumb, dumb policy, aimed at further enriching the rich and denuding the public realm. And if voters don’t see through it, Trump is smarter than the public.
NPR reported that Democrats will back this scheme because they are so eager to get infrastructure spending. I sure hope that’s wrong. Democrats need to be leading the charge for the real deal, not Trump fakery.