Sunday, November 20, 2016

Trump agenda: Ready for another Porkulus?

Plus ça change, plus c’est la même chose. Eight years ago, a president who won election by promising sweeping change made an infrastructure-heavy stimulus bill his top domestic priority. That wound up costing $800 billion for Democratic hobby-horse agenda items (remember Solyndra and other green-energy busts?) while teaching Americans that there’s no such thing as shovel-ready projects. Apart from accelerating some maintenance items that had already been planned, Barack Obama’s Porkulus added to our national debt without doing much for the economy or for our infrastructure.
Now Donald Trump wants to take a swing at stimulus via infrastructure. It will cost less and takes a different approach, but will conservatives who want to cut federal spending and address national debt buy into a Trumpulus?
A presidential transition website this week said Trump will invest about $550 billion in new projects. But he hasn’t spelled out his priorities. Nor is it clear how much of that total would be new federal spending and how much would come from the private sector. And Congress might have its own ideas.
Two of Trump’s advisers, Wilbur Ross, a private-equity investor, and Peter Navarro, a University of California at Irvine business professor, released an analysis Oct. 27 suggesting that the federal government could provide tax credits — a form of subsidy — to investors in infrastructure and recapture lost revenue through taxes on higher wages and contractor profits. The credits would cover $137 billion, or 82 percent, of the equity investment needed for $1 trillion of infrastructure, according to the analysis.
If Trump relies too heavily on the private sector, though, his initiative could fall far short of the new investment that businesses and economists say is desperately needed. According to the White House Council of Economic Advisers, the average age of U.S. infrastructure — including water and sewer facilities, streets and highways, and electric power plants — is two to three decades and has increased steadily since the late 1960s.
Read the rest of this op-ed HERE.

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