Senate Democrats have proposed an infrastructure plan that calls for $1 trillion in federal deficit spending. In detail, the plan calls for:
- $100 billion for reconstructing roads & bridges;
- $100 billion to “revitalize Main Street,” that is, subsidies to New Urbanism and affordable housing;
- $10 billion for TIGER stimulus projects;
- $110 for reconstructing water and sewer;
- $50 billion for modernizing rail (Amtrak and freight railroad) infrastructure;
- $130 billion to repair and expand transit;
- $75 billion for rebuilding public schools;
- $30 billion to improve airports;
- $10 billion for ports & waterways;
- $25 billion to improve communities’ resistance to natural disasters;
- $100 billion for a next-generation electrical grid;
- $20 billion for broadband;
- $20 billion for public lands and tribal infrastructure;
- $10 billion for VA hospitals;
- $10 billion for an infrastructure bank;
- $200 billion for “vital projects” that “think big” such as building “the world’s fastest trains.”
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Update:Someone has leaked what is supposedly the Trump administration’s own list of 50 infrastructure priority projects, and it’s not particularly encouraging as it includes such things as a Dallas-Houston passenger rail line, the Maryland Purple Line, the Hudson River tunnels, and completion of the Second Avenue Subway. Except for the Dallas-Houston line, most of the passenger rail projects were already pretty well decided, but they are still foolish investments that will cost a lot and return little to the economy. There are supposedly more than 250 other projects on a priority list, but it isn’t absolutely certain that this list was endorsed by Trump or merely proposed to him.
Update to update: While it appears that the Trump priority list was “fake,” i.e., not really from Trump, the reason the Dallas-Houston rail was on the list is that it claims to be entirely privately funded. I am skeptical that private funding could finish such a project, but if it could, it would be appropriate (though entirely unnecessary) to have it on the list.
Before this list was released, the Antiplanner was far from thrilled with what little we know of Trump’s infrastructure plan, which calls for giving tax credits to private investors who spend money on infrastructure. When compared with the Democrats’ plan, however, it has some solid virtues:
- While the Democrats take a top-down approach dictating where the money will go, Trump leaves the setting of priorities to state and local governments;
- Where the Democrats would commit the federal government to spend an arbitrary amount of money whether it needs to be spent or not, Trump lets state & local governments decide how much to spend and how they will pay for it;
- Where Democrats would add $1 trillion to the deficit, Trump relies on a tax credit program that will cost the feds no more than $167 billion per trillion in spending (less, obviously, if less than $1 trillion is spent);
- Where a lot of the Democrats money would go down a rat hole, at least some of federal tax credits that Trump’s plan would issue will be offset by the reduced use of tax-free municipal bonds and taxes paid by companies and workers earning the money.
Typical of central planners, the dollar figures in the Democrats’ plan are completely arbitrary.
- Why should trains and transit, which carry 1 percent as many passenger miles as roads, get roughly as much money as roads and bridges (and probably more considering much of the $200 billion “vital infrastructure” fund would go for high-speed rail)?
- Why spend $40 billion expanding transit and no money expanding highways when highway use is growing faster than transit in most places and years?
- Why no money for upgrading the air traffic control system (which is on Trump’s top-50 list)? While I don’t support the use of tax dollars for such things, it seems a huge oversight from a plan predicated on the idea that federal central planners know the best places to spend your money;
- Why $110 billion on water and sewer, and not $100 billion or $120 billion? It seems the goal of these numbers is to add up to a nice round $1 trillion while divvying up the money to interest groups depending largely on their relative or potential political support for the Democratic Party.
- For that matter, why any at all on water, sewer, and the electrical grid when these should already be adequately funded through user fees?
- Why is education even on the list (other than that the teachers unions own the Democratic Party) when the federal government has never spent more than token amounts of money for school infrastructure?
My complaints about the Trump plan have been:
- It’s not really a plan–it’s just one funding tool;
- It doesn’t prevent state and local governments from spending the money on completely looney projects such as the aforementioned rail boondoggles; and
- The private-partnership aspect has confused many people into thinking it will only fund projects that can be paid for out of user fees when in fact most projects would require state and local taxpayers to ultimately repay the private contractors out of tax dollars.
While these are valid complaints, the Trump plan, even with a somewhat misplaced and possibly fake priority list, is superior to the Democrats’ plan. While Trump actually brought a new idea to the table, the Democrats’ plan is the same old borrow-and-bribe formula that they have used in the past. This is actually worse than tax-and-spend because taxing and spending doesn’t leave huge debt problems and interest payments for the future. Trump’s program is bottom-up rather than top-down, as most if not all of the projects on his priority list have the support of state and local officials.
The real goal of the Democrats’ plan is to show their political backers what they could get if they return the central-planning party to power. But what it shows to everyone else is how lucky we are that Trump’s election may have saved us from more trillion-dollar deficit bills funding bridges to nowhere and obsolete trolley cars to clog up our streets. While we can hope that Trump will rely on user fees more than taxes, at the moment the score has to be Trump 1/2, Democrats minus 1.
1. Spending on maintenance and NEEDED infrastructure is probably the best of the worst of job stimulation and economic development.
2. Even then, money will flow to the DC subways and other systems that deliberately don’t do maintenance and kill people just to get more federal money. This money should be the gift to Democrats to buy their votes. It is terrible long term policy, but it is inevitable in the long run and Democrats should have to pay a price for it politically.
3. Social engineering projects like transit and downtown development that doesn’t pay for itself abd should be mocked as “infrastructure” and instead moved into a category called “boondoggles”.
4. The law needs to be changed to provide a 10 year window that all permits and studies are locked in and done so that projects can be timed to do more of them during recessions and less of them during boom times.
I agree with the Antiplanner’s concept that worthwhile projects should be paid out of user fees. However I am concerned that much of the “public private partnership” will turn out to be a funding mechanism for channelling taxpayer dollars to subsidize the very wealthy and/or special interests. For example, last week I was talking with a Trump supporting Republican from California’s central valley. He was complaining that we should not be attempting to build high speed rail (I agree) in a high tax state (I agree) and that money should be spent on dams to subsidize water for San Joaquin valley farmers (I disagree). Why not stop building high speed rail and return the money to general revenue for the state and eliminate the small deficit forecast for California this year? Deficit spending now means higher spending later. When I suggested that the state could issue bonds at relatively low interest rates to build dams then pay the interest on the loans by charging for the water, this Republican disagreed. He seemed to think that farmers in California somehow deserved taxpayer subsidized water. Why? Farming is a business like any other and we have such a food surplus in the United States we are using taxpayer dollars to subsidize turning corn into alcohol to get rid of the surplus corn. The Republican didn’t understand this but seemed to think that farmers should be taxpayer subsidized.
Trump and the Republicans are already promoting big tax breaks that will increase the deficit. Better to increase taxes for additional spending if spending is needed. If the link between spending and taxes is broken it seems that then too many taxpayers, are happy to increase spending as only the deficit goes up, not immediate taxes.
So far the Trump administration seems to be promoting big deficit spending by cutting taxes for the wealthy, in the belief that this will pay back in more taxpayer revenue. This didn’t work under Reagan, or George H. W. Bush when taxes were cut, spending just increased and the deficit soared.
It would be better to compromise between the Republican and Democratic positions. Stop subsidizing most projects that cannot be paid out of user fees, and tax for spending.. Make it clear that if spending is increased, then taxes will go up. Stop borrowing and spending, and subsidizing boondoggle projects.
“The Republican didn’t understand this but seemed to think that farmers should be taxpayer subsidized.”
Cruz and Paul were the only candidates of either party to go on record against the Crappy Corn Gas industry. Even Bernie was in bed with those crony capitalists. Which is why I was surprised to see:
Why The Ethanol Industry Should Fear President Trump
Apparently Trump’s EPA chief nominee Scott Pruitt has been a vocal detractor of crappy corn gas for some time.
The Antiplanner wrote:
$200 billion for “vital projects” that “think big” such as building “the world’s fastest trains.”
Wasn’t there a time when the United States had the fastest trains in the world?
But what it shows to everyone else is how lucky we are that Trump’s election may have saved us from more trillion-dollar deficit bills funding bridges to nowhere …
Regarding “bridges to nowhere,” if you mean the proposed bridge between Ketchikan, Alaska and its airport on Gravina Island, I must respectfully but strongly disagree (and yes, there’s a ferry that provides the connection today, but I am of the opinion that a bridge would have been a much more robust and permanent connection, and probably allowed some development to take place on Gravina Island). Yes, Ketchikan is probably “in the middle of nowhere” (as is Revillagigedo Island on which it is located), but its airport connects all of this to the rest of the state and the rest of nation, and is not “nowhere,” and if given the chance, I would have supported that project myself (but unfortunately nobody asked me).
… and obsolete trolley cars to clog up our streets.
Yes, I certainly agree with that (even though I love trolleycars and streetcars on my time).
If you think about it, a “bridge to nowhere” is actually quite valuable because it opens up a vast new area to a road system and offers a huge number of new opportunities. A “bridge where there are already a dozen other bridges” might reduce some congestion at peak time, but it is probably not the best place for a bridge and probably doesn’t open up many new economic opportunities.
Obviously you can imagine situations where a “bridge to nowhere” doesn’t lead to anything in the future, but as a general principle that phrase does not indicate a bad project. The “Oregon Trail” was a Trail to Nowhere when it started.
Thanks for reminding me that almost all Republicans and Democrats have agreed to subsidies for turning corn into alcohol. I agree. I have read the theory that this is because Iowa is the first primary and therefore candidates cannot afford to offend Iowa farmers. I recall that in 2000 McCain opposed alcohol subsidies, wrote off Iowa and counted on winning New Hampshire. Then in 2008 he started in Iowa and supported alcohol subsidies, very disappointing.
I am heavily influenced and disappointed in the Republicans I meet in the California central valley who are against big government, high taxes, etc. They then want taxpayer subsidized water and other farm programs that benefit them and don’t seem to realize their hypocrisy.