Thursday , November 28 2024
Home / EconoSpeak / Drastically Changint the Rules On Infrstructure Spending

Drastically Changint the Rules On Infrstructure Spending

Summary:
Most observers have figured out that the Trump infrastructure spending plan seems to be weirdly lopsided in an unrealistic way, with 0 billion in federal spending somehow supposed to inspire a total of .5 trillion in spending by state and local sources along with private ones.  What has not been made all that clear publicly is how this plan upends decades of established practice in fiscal relations between the federal and the state and local governments.  The long-established formula has been 8 to 2, that is in federal money for in state or local money in infrastructure construction projects.  Trump's plan proposes to completely reverse this to a 2 to 8 formula, in federal money for in state or local money.  Anyone who thinks this is going to provide any actual

Topics:
Barkley Rosser considers the following as important:

This could be interesting, too:

Lars Pålsson Syll writes Busting the ‘natural rate of unemployment’ myth

Mike Norman writes Rates

Michael Hudson writes Petrodollar Deal or No Deal

Lars Pålsson Syll writes Riksbankens oansvariga penningpolitik

Most observers have figured out that the Trump infrastructure spending plan seems to be weirdly lopsided in an unrealistic way, with $200 billion in federal spending somehow supposed to inspire a total of $1.5 trillion in spending by state and local sources along with private ones.  What has not been made all that clear publicly is how this plan upends decades of established practice in fiscal relations between the federal and the state and local governments.  The long-established formula has been 8 to 2, that is $8 in federal money for $2 in state or local money in infrastructure construction projects.  Trump's plan proposes to completely reverse this to a 2 to 8 formula, $2 in federal money for $8 in state or local money.  Anyone who thinks this is going to provide any actual infrastructure activity that would not have otherwise is simply completely delusional.

Of course it is well known that the private sector input will involve tolls or other payment methods to make sure the private interests make a positive rate of return. One important area many want to see work done is on fixing bridges. The American Society of Engineers has identified about 50,000 bridges in the nation that need repair.  However rhey also estimate that only about 100 of those are reasonably suitable for private tolling.  This is another not-going-anywhere part of the proposal.

However, Trump is apparently hoping to raise money by outright selling off some publicly owned infrastructure assets.  The Washington Post reports today that in the Washington area this includes the two main airports, Dulles and Reagan National, as well as the George Washington Memorial Parkway (currently not tolled).  I can hardly wait and am curious what else around the country is going to be put on the block for a grand fire sale leading to all kinds of tolls and other nonsense.

Barkley Rosser

Barkley Rosser
I remember how loud it was. I was a young Economics undergraduate, and most professors didn’t really slam points home the way Dr. Rosser did. He would bang on the table and throw things around the classroom. Not for the faint of heart, but he definitely kept my attention and made me smile. It is hard to not smile around J. Barkley Rosser, especially when he gets going on economic theory. The passion comes through and encourages you to come along with it in a truly contagious way. After meeting him, it is as if you can just tell that anybody who knows that much and has that much to say deserves your attention.

Leave a Reply

Your email address will not be published. Required fields are marked *