Things that make you groan: National Review, Linseed Graham, Club For Growth, Juan McCain, the Weekly Standard ... etc. Go Trump, win win win.
Posted on 11/30/2016 8:38:38 AM PST by SeekAndFind
Stephen Moore, a Trump economic advisor and a man I know and respect, recently told congressional Republicans that, since Donald Trump won the election, it is their duty to deliver on his agenda — even if his policies are bad ideas. Umm, no. Bad ideas are bad ideas, even when voters choose them. Otherwise, we all should have gone along with every bad idea that President Obama proposed over the last eight years.
Moore was talking, in particular, about Trump’s plan to spend $1 trillion or more on infrastructure projects. But, like many of Trump’s ideas, the infrastructure proposal is less an actual plan than a vague notion. As Trump’s chief strategist Steve Bannon put it, “We’re just going to throw it up against the wall and see if it sticks.” Harkening back to FDR, Bannon calls Trump’s plans “as exciting as the 1930s.” That’s not exactly reassuring.
Supporters of an infrastructure program, at a time of an almost $20 trillion national debt, justify it on two grounds. First, they correctly note that the federal government can currently borrow relatively cheaply with interest rates so low — primarily because other investment options, like the euro, are such bad bets. The U.S. may be deep in debt, but we are still the fastest horse in the glue factory.
And yet even with low rates, we still paid $284 billion in interest payments in 2016. That’s $284 billion that contributes nothing to economic growth or to advance the legitimate functions of government. Borrowing more for infrastructure spending would simply increase our interest payments.
Second, Trump and other infrastructure advocates see it as good-old-fashioned Keynesian stimulus. If, however, we have learned anything in recent economic history, it’s that Keynes isn’t all that he’s cracked up to be.
Infrastructure spending is not likely to deliver the bang for the buck that Trump supporters expect in terms of either job creation or economic growth. Recall that infrastructure spending under President Obama’s 2009 stimulus bill resulted in just 200,000 permanent jobs at a cost to taxpayers of $4.2 million per job. And studies show that, while infrastructure spending may provide a short-term boost to GDP, it can actually reduce economic growth over the long-term by diverting resources and creativity to less innovative and productive uses.
This is not to say that there aren’t infrastructure projects that legitimately need to be undertaken. But the federal government is unlikely to know or care what they are. Indeed, Congress tends to ignore useful projects like road and bridge maintenance, in favor of more grandiose efforts that can serve as reelection fodder. Why fill potholes when you get yourself photographed cutting the ribbon in front of something majestic?
Trump’s proposal appears to provide tax credits and other incentives for the private sector to undertake such projects. While that idea is undoubtedly sounder than direct government management, there is a danger that the credits will end up as a crony-capitalist reward for Trump’s friends or others with clout in Washington. In other cases, the credits may simply subsidize projects that would have been undertaken even without taxpayer support.
Democrats, of course, are allergic to even a hint of private-sector involvement. They want Congress to get back to their preferred role of picking winners and losers — and dispensing pork-barrel largess. One can almost hear Chuck Schumer and Senate Democrats salivating at the prospect of cutting deals to spend all that money.
In his famous “Speech to the Electors of Bristol,” Edmund Burke told his constituents that an elected representative owes them “his judgement; and he betrays, instead of serving you, if he sacrifices it to your opinion.”
Republicans in Congress were justly criticized for being supine in the face of the Obama administration. That doesn’t mean they should be equally pusillanimous when dealing with a President Trump. They should support him when his proposals make sense — and oppose him when they don’t.
One place they should start is by saying “No” to this unaffordable and wasteful infrastructure boondoggle.
— Michael Tanner is a senior fellow at the Cato Institute and the author of Going for Broke: Deficits, Debt, and the Entitlement Crisis. Y
I believe Trump has the idea to turn the infrastructure projects over to the private sector such as toll roads and bridges could be done with airports also!!!
RE: We the People should just say “NO!!!” To the National Review!
So, you are actually for the Federal Government spending $1 trillion on infrastructure?
If so, can you explain to us why this is feasible?
Nope, spend like a drunken sailor on infrastructure and cut back federal regulatory jobs. Dick cheney said deficits don’t matter. This is how we keep the red states red.
.
Some Buckley fan will be by soon to beat you severely with his wet noodle.
.
I knew from the headline this had to be NR, it was just a question of which turd floating in that toilet bowl wrote it.
Things that make you groan: National Review, Linseed Graham, Club For Growth, Juan McCain, the Weekly Standard ... etc. Go Trump, win win win.
National Review has lost all the remaining credibility by viciously attacking Trump since day one. Get lost and back to your ivory tower.
Then give the man a chance to make specific proposals before you decide that the only answer is NO.
RE: Tanner’s affiliation with NR, an obsolete mess that devoted an entire issue to trashing Trump, thereby promoting HRC, is all I need to dropkick his article into the nearest trash heap without comment.
I kinda wish you would refute Tanner’s article instead of simply attacking him and the magazine personally.
Author demonstrates himself wholly ignorant here. O's "stimulus spending" spent almost nothing on actual projects and instead retired debt for local and state Governments so they could avoid having to reduce Govt union jobs. The theory was that the stimulus would make up for declining local tax inflow until the economy picked up under 0.
RE: Then give the man a chance to make specific proposals before you decide that the only answer is NO.
OK, let’s look at the idea a little bit more closely since this infrastructure spending idea has already been implemented by Obama ( remember the “shovel ready” jobs ?)....
Infrastructure more or less falls into three categories, and Trump’s one-size-fits-all plan doesn’t work very well for any of them.
1) First is infrastructure that pays for itself, such as the electrical grid. Private companies and public agencies are already taking care of this kind, so if Trump’s plan applied to them, they would get tax credits for spending money they would have spent anyway. That’s not revenue neutral.
2) The second kind of infrastructure doesn’t pay for itself. Rail transit is a good example, and this tends to be the infrastructure that is in the worst shape. It won’t suddenly become profitable just because someone gets a tax credit, so under Trump’s plan it will continue to crumble.
3) The third kind of infrastructure consists of facilities that could pay for themselves but don’t because they are government owned and politicians are too afraid of asking users to pay. Local roads fit into this category. Simply creating tax credits doesn’t solve that problem either.
Trump may think that local governments and transportation agencies will jump at the chance to borrow money from private investors to fix infrastructure, and then repay that money out of whatever tax sources they use to fund that infrastructure. But those government agencies can already sell tax-free bonds at very low interest rates.
It isn’t clear how taxable bonds issued by private investors who get tax credits are going to be any more economical.
Most public-private partnerships for projects that have no revenue stream are entered into by the public party to get around some borrowing limitation. If the infrastructure spending is really necessary, it makes more sense to simply raise that borrowing limit than to create a byzantine financial structure that, Trump imagines, will have the same effect.
In short, whether funded by municipal tax-free bonds or taxable private bonds, those bonds will ultimately have to be repaid by taxpayers. We know from long experience that politicians are more likely to ask taxpayers to pay for new projects than maintenance of existing projects, and Trump’s plan will do nothing to change that.
What... who doesn’t love a trillion dollar stimulus? If it’s good enough for the Donald, it’s too make America great again. What kind of communist doesn’t love that?
Obama has never done anything he said he would do, including allowing me to keep my Doctor. Trump will do precisely what he says he will do. That is, after all, his life story.
I was taught that new infrastructure spending returned $8 in economic benefit for every $1 spent.
Perhaps that is less with retrofit spending vs new infrastructure. And our public services are more bureaucratic and less efficient than when I was young. But even if infrastructure spending returns just $4 for every $1 spent, it is still a benefit. There is a substantial benefit epwhen truckers can haul more in less time when freeway congestion is reduced. Businessmen can get more done when airports have fewer delays. Benefits to water pipes and sewer pipes that dont leak and electrical power lines with more capacity and less down time.
Obama gave us nothing for the $10 trillion he added to the national debt. $1 trillion for substantially improved infrastructure is a bargain compared to that.
Panties in a wad because Trump will do what the Dems have been promising to do for a long time with their only intention being to earmark money for it then steal it for their slush funds....The probably still think Clinton’s Midnight Basketball” scam was a great idea to help the inner cities....
Hmm. You mean like Thomas Jefferson’s “boondoggle” that became the National Road, where he urged Congress to pass a program TWO TIMES that of the entire federal budget in 1807?
In fact, almost all of that “boondoggle” was passed, the National Road was built, and both private and state-supported roads and canals created what was called “The Transportation Revolution.”
And if you believe that will happen then I have a bridge in Brooklyn I'd like to talk to you about.
PREEEE-CISELY (think of my Theodore Roosevelt voice).
In fact, Hamilton, with Madison’s blessing, urged long-term debt that was REDUCED through a sinking fund. When repaid, use more long-term debt to build more. It is the American Express form of credit.
You raise excellent points. However we are where we are. They can keep borrowing money like drunk sailors but when interest rates climb (and they will) the interest on the debt alone will consume greater and greater chunks of the budget.
Yep. It will be interesting to watch - especially if he hires guys like C.C. Myers:
You might recall back in 1994 after the Northridge earthquake destroyed a stretch the Santa Monica Freeway. Myers had 100 days to finish the job - he did it in 66. Of course he pocketed a big bonus for finishing early, but in the end he saved CA money as they were losing 1 Million dollars a day because of the closed freeway.
http://www.sfgate.com/bayarea/article/A-gutsy-guy-s-big-gamble-on-the-maze-2574444.php
It can be done - when the RIGHT folks are in charge...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.