The top of the fold opinion in the Wall Street Journal Monday was titled “Trump’s Infrastructure Mistake.” It could also have read “Trump’s Infrastructure Garbage,” or “Trump’s Not Infrastructure Plan.”
The normally conservative opinion section assailed the president-elect’s get-rich-quick infrastructure plan as “ridiculous.” Their word choice, not ours. Basically, Trump’s so-called infrastructure plan is actually a plan to make private equity investors rich, Princeton economists Alan Blinder and Alan Krueger write. It does little to nothing to address the nation’s lackluster infrastructure (congested highways, barely-usable train service, failing bridges, last-century airports…the list goes on).
Prepare yourself, statistics incoming.
- Trump’s plan to lure investors to infrastructure projects includes offering millionaire investors an 82% tax credit. Spend $100 on a for-profit toll road project, get $82 back. Not even Sears could pull off a sale like this.
- An example included in Trump’s plan showed a $3 billion project paid for with $2.5 billion in municipal bonds, $410 million in federal tax credits, and $90 million in private equity. That would give a private investor control of a $3 billion asset for less than one-thirtieth of the cash up front.
- Even this unbelievably lucrative offer, basically giving away taxpayer money to private investment firms, might not be enough to attract investors, the economists write. That’s because nearly one-third of public-private road projects have gone bankrupt since 1995.
In summation, this infrastructure plan likely won’t work. If it does work, it will be giving public highways to millionaire and billionaire investors for pennies on the dollar. You, already paying taxes for roads, will be paying tolls. You’ll be getting no public roads, because the “investors” will hold equity in those roads. Your (already paid) tax money will be returned en masse to the millionaires you’re also paying tolls to.
A better idea, the economists write, would be to use a program created by the Democrats’ 2009 Recovery Act called Build American Bonds. Those bonds subsidize local communities which invest in things like public schools, public roads and other things that the public owns. (Read: things that make everyones life better and that millionaires and billionaires don’t collect tolls on.)
Imagine that. America’s most trusted conservative news source publishing an opinion that concludes President Barack Obama’s stimulus package — which many, including Nobel Laureate Paul Krugman, criticized as too weak — is better than Trump’s phony bologna “infrastructure plan.”