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TRUMP AND INFRASTRUCTURE

April 7, 2018

TRUMP AND INFRASTRUCTURE

I have preached from the rooftops (and especially since the bridge collapse in Minnesota in 2007 which killed and injured so many people) that we must redo our infrastructure. All the politicians talk about it but even the tragedy in Minnesota did not move them to appropriate funding for such a desperately needed project. Republicans, I note with dismay, found 1.5 trillion dollars in deficit financing for their rich campaign contributors recently but could not find a dime for infrastructure repair and renewal.

One of Trump’s campaign promises was that he would seek infrastructure repair and renewal, rightly touting how this would provide millions of good-paying jobs in the course of such an effort and how such improvements would facilitate commerce, safety, improvement in traffic jams etc. I had hope, but then when he outlined how he was going to do this (hand our transportation system over to the privatization of Wall Street) I had to withdraw my support. I remain committed to infrastructure repair and renewal but I object to Wall Street ownership of our transportation system. I do not wish to pay a toll to Wall Street every time I leave my driveway, thank you very much, and if we have a trillion and a half of our (borrowed) tax money to give to Wall Street, then we have the money to repair our old and dangerous infrastructure which, it is estimated, costs each American $3,400 a year.

As an amateur economist, my favorite economists today are Piketty and Stiglitz, both brilliant. However, I here note that Steven Pressman, a professor of economics at Colorado State University, is a rising star. He wrote an article on the repair and renewal of our infrastructure for the April edition of The Washington Spectator which motivated me to write this blog. He does not tell us how to finance our infrastructure’s repair and renewal (which I will later in this piece) but very capably makes a case for government rather than Wall Street ownership and control of our public transportation system.

He notes (as paraphrased) > That the signs of a U.S. infrastructure crisis are unmistakable – derailing trains, crumbling roadways, undrinkable tap water, and wastewater systems that endanger public health, that 23 bridges have collapsed since 2000 (one in Minnesota in 2007 that killed 13 people and injured 145), that The American Society of Civilian Engineers gave our infrastructure a D+ grade in 2017, adding that we need to devote 1.5 trillion dollars’ worth of improvements in the next decade (the same amount, ironically, that Trump and Republicans gave away of our tax money to their rich campaign contributors in their “tax bill” recently). A trillion and a half for the rich; brutal commutes, road congestion, car repairs, and even death for the rest of us. Whatever happened to legislating for the common good? Ask Ryan and McConnell.

Trump’s infrastructure plan will give him bragging rights in keeping a campaign promise but will do little to clean up our rotting public buildings, ports, highways and bridges, amounting to an open invitation to Wall Street to largely finance the operation and then collect tolls (and operational control) of our transportation system under a government-guaranteed contract funded by toll revenues.

Part of Trump’s plan involves local governments’ coming up with a share of the revenues for the projects in their localities. States and localities fund such projects through the sale of municipal bonds, a favorite investment for the rich because interest on such bonds is not taxable, but with the recently passed Republican tax bill lowering the tax rate on the rich, local (already cash-strapped) governments will have to pay higher interest rates in order to compete among investors, especially since the bill also limits the deductions for state and local taxes on federal tax returns, and that will be a hard political sell, not likely to happen, and smooths the way for Big Money to expropriate our transportation system from public control.

Professor Pressman thinks Trump’s plan will not make it through Congress since representatives and senators will be under great pressure to oppose plans making their states and districts pony up more money for such projects. I certainly hope he is right, but with a Congress that passed the recent tax atrocity handing over 1.5 trillion dollars in borrowed money to the rich, who can tell what they will decide to do with Wall Street lobbyists’ promises of campaign contributions for a vote?

Finally, we can finance this renewal of our infrastructure without submitting to the vices of profit and loss of public control. How? Higher taxes? Not exactly. We can (as others have) form a public bank that sells bonds of varying maturities so as to apportion costs over the long term, make interest on such bonds untaxable (as with municipal bonds) so as to enjoy a lesser rate of interest paid, and other good news is that the savings occasioned by such first class transportation facilities will greatly lessen traffic delays in getting to and from work, commercial delivery of goods etc., the effects of which will help pay for the improvements made – and all without loss of public control and payment of tolls upon leaving one’s driveway.

This plan and not Trump’s will in my opinion work, because the supposed savings we will enjoy by not paying for this out of tax money would be paid out in tolls and a $3,400 average payout for related expenses while we lose control of our public transportation system. That is not a good deal for America. Truth be told, I submit that we cannot afford to not fix our infrastructure under such a plan. It’s far cheaper and we do not have to surrender our public control of this public asset to financiers, so let’s do it. Soon.    GERALD     E

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