Americas infrastructure is in dire need of investment. But nothing Trump is proposing will do anything to help
At a roundtable discussion with state transportation officials on Friday, Donald Trump said Americas ageing roads, bridges, railways, and water systems were being scoffed at and laughed at. He pledged that they will once again be the envy of the world.
This seems to be a core theme for Trump: Americas greatness depends on others envying us rather than scoffing and laughing at us.
He said much the same thing last week when he announced his decision to withdraw from the Paris climate agreement. At what point does America get demeaned? At what point do they start laughing at us, as a country? We dont want other leaders and other countries laughing at us any more. And they wont be. They wont be.
To be sure, America is in dire need of vast investments in infrastructure. The country suffers from overflowing sewage drains, crumbling bridges, rusting railroad tracks, outworn roads, and public transportation systems rivaling those of third-world nations.
The American Society of Civil Engineers, giving Americas overall infrastructure a grade of D-plus, says we would need to spend $3.6tn by 2020 to bring it up to par.
The problem isnt that were being laughed at. Its that were spending hours in traffic jams, disrupted flights, and slow-moving trains. And were sacrificing billions in lost productivity, avoidable public health problems, and increased carbon emissions.
But what Donald Trump is proposing wont help. Its nothing but a huge and unnecessary tax giveaway to the rich.
His $1tn infrastructure plan, unveiled last week, doesnt amount to $1tn of new federal investment in infrastructure. It would commit $200bn of federal dollars over ten years, combined with about $800bn of assorted tax breaks to get developers to build things instead of the federal government doing it.
And its hardly a plan. Its not much more than a page of talking points.
Worse, its underlying principle is deeply flawed. It boils down to a giant public subsidy to developers and investors, who would receive generous tax credits in return for taking on the job.
Which means the rest of us would have to pay higher taxes or get fewer services in order to make up for the taxes the developers and investors would no longer pay.
For example (in one version of the plan Ive come across), for every dollar developers put into a project, theyd actually pay only 18 cents after tax credits and taxpayers would contribute the other 82 cents through their tax dollars.
No one should be surprised at this scheme. Its what Trump knows best. After all, he was a developer who made billions, often off sweeteners such as generous tax credits and other subsidies.
The public would also pay a second time. The developers would own the roads and bridges and other pieces of infrastructure they finance. Theyd then charge members of the public tolls and fees to use them.
In place of public roads and bridges, wed have private roads and bridges. Think of America turning into giant, horizontal-like Trump Tower wherever you looked.
These tolls and fees wont be cheap. Theyd have to be set high in order to satisfy the profit margins demanded by the developers and the investors who back them.
Worst of all, wed get the wrong kind of infrastructure. Projects that will be most attractive to developers and investors are those whose tolls and fees bring in the biggest bucks giant mega-projects like major new throughways and new bridges.
Developers and investors wont be interested in the thousands of smaller bridges, airports, pipes, and water treatment facilities across the country that are most in need of repair.
Theyre not likely to respond to the needs of rural communities and smaller cities and towns that are too small to generate the tolls and other user fees equity developers and investors seek.
They wont be attracted to the highest priority for our infrastructure: better maintenance of what we already have. With improved maintenance, it wouldnt be necessary to completely rebuild.
But investors and developers want to build anew. They cant reap big rewards from maintenance.
Nor will they want to put their efforts and money into projects that dont yet have proven financial track records, like many clean energy innovations which, not incidentally, might have enabled us to meet our targets under the Paris climate accords, were we still part of the Paris accords.
We shouldnt have to pay twice over for the wrong infrastructure.
To really make America great again, we need the correct infrastructure in the right places infrastructure thats for the public, not for big developers and investors.
Sorry, Donald. The only way we get this is if big corporations and the wealthy pay their fair share of taxes to support it.