Indiana sold its toll road (I-90) to private investors a couple of years ago. Tolls have just been doubled. Get ready for a lot more toll roads, which will get a lot more expensive for everyday folks to use. This is further wealth transfer to the 1%.
3
Check out the Fl Turnpike authority for an example of how public and private can cooperate, run a good system, and get the users to pay.
http://www.floridasturnpike.com/
After all this is the US the "world" is not a valid comparison for anything. Health care, taxes, nothing.
http://www.floridasturnpike.com/
After all this is the US the "world" is not a valid comparison for anything. Health care, taxes, nothing.
1
Goodman makes questionable comparison between private and public infrastructure funding in India and China with similarly funded projects in the United States. India is more reliant on private funding as it lacks the economic heft to finance its long-term public projects, as did China in its earlier years before its economic miracle created private wealth that could be the the source of funding. Moreover, he fails to describe the many failures of federally funded projects, such as cost overruns and egregiously defective construction (ceiling collapses, leaks and use of substandard materials) experienced at the Big Dig in Boston (the Control Artery/Tunnel Project), 1991-2006, which was the largest federally financed infrastructure project in the United States. Originally projected to cost $2.8 billion (all amounts in 1982 dollars), the eventual cost was $8 billion, a 190% overrun. Finally, Goodman also fails to describe the influence of "pork barrel" politics on the selection of federally financed infrastructure projects in the United States. Would not public-private jointly financed projects be a more effective use of taxpayer funds where the economic reality motivating private investors would serve as a check on the influence of local politics?
1
As one who grew up during the 1950s I remember our great building projects. I had a high school teacher who asked when they were talking about removing the tolls on 95 after we had paid for the construction to think about if it was a good idea, in fact we spent a class period debating whether or not it was a good idea( oh for the students today to have analyze such things) where would the money come from for upkeep of the road, should taxes be leaved and if so how much and on what and how to collect.
1
And your road was allowed to become a mess, lack of maintenance.
We don't want foreign money investing in our infatruture. You mentioned Japan, and Europe but failed to mention how much money the Chinese, Russians and Saudi's have already invested or agreed to invest. This is just another move Trump is making as president that will make his personal business deals easier and more profitable around the world. The GOP have launched his journey to rule The United States of America while becoming the richest man in the world!
First of all, why would the US of A need to have infrastructure funding by the Saudi's, or any foreigner.
Secondly, why involve the Blackstone vultures and let them make profits off of taxpayers with tolls.
Thirdly, America's infrastructure delay is the result of neglect and misplaced priorities, spending excessively on military; so realign the priorities.
And lastly, how does Trump & Family and Friends profit off of all this?
Secondly, why involve the Blackstone vultures and let them make profits off of taxpayers with tolls.
Thirdly, America's infrastructure delay is the result of neglect and misplaced priorities, spending excessively on military; so realign the priorities.
And lastly, how does Trump & Family and Friends profit off of all this?
4
This "solution" is similar to what was originally done with student loans. The government outsourced the issuance and collection of student loans to private banks, who were able to profit because the loans were guaranteed; in other words, a total sop to the banks which should never have been done. When Bill Clinton wanted to stop this, Rush Limbaugh and the Republicans protested, even though they supposedly stood against "government waste." See also George W.'s giveaway in preventing the government from negotiating lower drug prices. Republicans believe in special deals for their friends, and capitalism for the rest of us.
5
If you want to learn from the worst cases of a public-private partnership to execute infrastructure projects, Brazil tops the list, easily.
It has created the worst political corruption case and economic recession/unemployment in the country's history. As anywhere in the world -- including the US -- crook politicians and con executives are at the heart of the problem.
No secret that Brazilian corruption is widespread and culturally ingrained in all social classes. From the small upper-class elite to the urban middle class and the poor.
In 2003, a charismatic politician Lula da Silva -- leader of the grass-roots Worker's Party -- was elected president for 4 years. He was easily re-elected and his obtuse/pellucid appointee -Dilma Rousseff- was elected for two terms.
The second term of Rousseff ended in impeachment and the current corruption investigation called Lava Jato. It involves multi-billion dollars of state enterprises stolen money and bribery paid by construction companies to powerful politicians.
The crime-induced mix of construction companies and politicians in Brazil brought two invaluable lessons;
a. political parties have turned - de facto - in criminal organizations; b. 'democracy' brought out ingrained corruption and impunity for politicians seeking power and money.
It has created the worst political corruption case and economic recession/unemployment in the country's history. As anywhere in the world -- including the US -- crook politicians and con executives are at the heart of the problem.
No secret that Brazilian corruption is widespread and culturally ingrained in all social classes. From the small upper-class elite to the urban middle class and the poor.
In 2003, a charismatic politician Lula da Silva -- leader of the grass-roots Worker's Party -- was elected president for 4 years. He was easily re-elected and his obtuse/pellucid appointee -Dilma Rousseff- was elected for two terms.
The second term of Rousseff ended in impeachment and the current corruption investigation called Lava Jato. It involves multi-billion dollars of state enterprises stolen money and bribery paid by construction companies to powerful politicians.
The crime-induced mix of construction companies and politicians in Brazil brought two invaluable lessons;
a. political parties have turned - de facto - in criminal organizations; b. 'democracy' brought out ingrained corruption and impunity for politicians seeking power and money.
1
Yes, yes, let's sell our nation off! If I had a trillion lying around, I might buy it myself.
Infrastructure for profit will work even worse than health care for profit, where we're tops in cost at 16% of GNP and 31st in longevity.
Infrastructure for profit will work even worse than health care for profit, where we're tops in cost at 16% of GNP and 31st in longevity.
6
Trump's private/public proposals are designed to enrich his friends and benefactors, and likely himself, at the expense of the public who likely will pay twice or thrice. We will pay taxes for the infrastructure costs, the profits will flow to the private sector (with little to no oversight) and then the public will be tolled for the same roads or bridges they have already paid for. The tolls will go to the private company not the gov (so we might have money to maintain or fix or build new projects).
5
Just like your turnpike??? Now the roads are in a mess, they need to be fixed now, how about just raising the fuel tax? Remove most of the expensive requirements as well.
I thought we were done with the generally accepted idea that anything done by the government is inefficient and costs too much, while the private sector can just naturally and magically produce better, cheaper results and make everybody happy. Why does anybody still believe this? And why do we want not only private investors, but foreign private investors owning our infrastructure? How much did the Saudis say they would invest in our infrastructure? Really, can't figure out why we want them. The U.S. is awash in cash and there would be plenty to fix all of our infrastructure problems through bonds and whatnot if marketed properly.
2
Saudi Arabia offered 20 billion.
1
No of course reality is different, the private sector can deliver, the public sector could as well. The public management of our infrastructure has basically failed, time to try something different.
If you want to see text book example why public(risk)Private(profit) infrastructure is bad. Look no further than UTA, Utah Transit Authority. They are a text book of graft, profit taking, and insider deals put ahead of the overall public good. I say that not because I am against public transit. Quite the opposite. I think an efficient, affordable, and comprehensive public transit system is pretty much the only way were are ever going to get our air quality issue under control. And I would love to never have to get into my car unless I was leaving the Wasatch Front. UTA's system is none of those things. Yet the board of directors make as more money than the people running MTA and BART. And that doesn't even include their no-bid real estate side gigs they have going on.
6
My corruption in Mormon controlled Utah. Imagine Trump buddy developers.
Private companies are in business to generate a profit and a return to shareholders, not a bad objective HOWEVER, public projects are not those which they will hold to a high standard of accountability and deliverable. Building infrastructure that lasts is the work of government along with the jobs that will accompany it. Private companies will not invest in the material to create a lasting bridge -- designed obsolescence and, of course, short term profits are the objectives of private enterprise.
6
Over the years I have been involved in several "outsourcing" endeavors. Stakeholders unanimously used cost reduction as justification for doing so. They had been convinced that they could just "heave the work over the wall" and things would go on as they used to.
Every endeavor with which I have had experience has ended up costing more than if it were done in-house . . . a big part of the "extra cost" was the cost of managing the vendor and the vendor's work. You just can't hand off work to another entity and walk away. The relationship still has to be managed, the need for oversight has not gone away, and, has become a bigger headache because the organization no longer has oversight of the process. The only oversight that exists is that of trying to oversee the vendor's work.
Vendors do not have the same stake in the success of a product/process that the stakeholder does. The vendor's motivation is to keep the customer happy enough that they don't take their business elsewhere. The stakeholders need the project to succeed because their business depends upon it. The outsourcers just want to get paid.
Worst of all, the stakeholder loses control of the quality and efficiency of the project/process along with direct control of project/process itself.
The decision to outsource a project/process is the worst possible decision for the stakeholder to make ... cost-wise, governance-wise and quality- and efficiency-wise.
IMHO, outsourcing/partnering is the worst decision possible
Every endeavor with which I have had experience has ended up costing more than if it were done in-house . . . a big part of the "extra cost" was the cost of managing the vendor and the vendor's work. You just can't hand off work to another entity and walk away. The relationship still has to be managed, the need for oversight has not gone away, and, has become a bigger headache because the organization no longer has oversight of the process. The only oversight that exists is that of trying to oversee the vendor's work.
Vendors do not have the same stake in the success of a product/process that the stakeholder does. The vendor's motivation is to keep the customer happy enough that they don't take their business elsewhere. The stakeholders need the project to succeed because their business depends upon it. The outsourcers just want to get paid.
Worst of all, the stakeholder loses control of the quality and efficiency of the project/process along with direct control of project/process itself.
The decision to outsource a project/process is the worst possible decision for the stakeholder to make ... cost-wise, governance-wise and quality- and efficiency-wise.
IMHO, outsourcing/partnering is the worst decision possible
6
First. Don't kid yourself. The corruption that public/private "partnerships" make possible is exactly the point. Go to Atlantic City if you want to see how Trump makes places "great."
Two. This article doesn't mention the smart way to pay for infrastructure without paying billions in interest to global banks: taxation.
Another article says Jeff Bezos added $50 billion to his wealth since 2015. 1% of the population has more than 90%. If wealth consecration was so great for the rest of us, we wouldn't even be having this conversation.
Productivity is almost double what it was when we built the interstate highway program, wired the state of Texas, and probably five times what it was when we built the Erie Canal.
There is plenty of money. It is just in the wrong hands.
As a sovereign people with a representative government, we have the right, the responsibility, and the power to tax the mega rich and use it to invest in the future of our country.
We must invest in infrastructure to keep up with the rest of the world, including a massive push to renewable energy, which would be nearly free, once installed, and require no wars for wind or sunshine.
This would be great for businesses, saving them their energy costs.
Government is where the rubber of democracy hits the road. Stop believing that democracy is markets. The constitution doesn't mention them. Instead it demands that the government "provide for the general welfare."
Two. This article doesn't mention the smart way to pay for infrastructure without paying billions in interest to global banks: taxation.
Another article says Jeff Bezos added $50 billion to his wealth since 2015. 1% of the population has more than 90%. If wealth consecration was so great for the rest of us, we wouldn't even be having this conversation.
Productivity is almost double what it was when we built the interstate highway program, wired the state of Texas, and probably five times what it was when we built the Erie Canal.
There is plenty of money. It is just in the wrong hands.
As a sovereign people with a representative government, we have the right, the responsibility, and the power to tax the mega rich and use it to invest in the future of our country.
We must invest in infrastructure to keep up with the rest of the world, including a massive push to renewable energy, which would be nearly free, once installed, and require no wars for wind or sunshine.
This would be great for businesses, saving them their energy costs.
Government is where the rubber of democracy hits the road. Stop believing that democracy is markets. The constitution doesn't mention them. Instead it demands that the government "provide for the general welfare."
23
While not saying it explicitly....this article did touch on "the smart way"....
“The borrowing costs for the U.S. government are zero,” said Mark Weisbrot, a co-founder of the Center for Economic Policy and Research in Washington. “There’s simply no reason to turn to private capital and all the complications, uncertainties, and opportunities for corruption and bad outcomes that you add to the mix.”
Your post is excellent by the way....
“The borrowing costs for the U.S. government are zero,” said Mark Weisbrot, a co-founder of the Center for Economic Policy and Research in Washington. “There’s simply no reason to turn to private capital and all the complications, uncertainties, and opportunities for corruption and bad outcomes that you add to the mix.”
Your post is excellent by the way....
5
Perfect response! If I could hit the "recommend" button a hundred times I certainly would.
As my family and I travel throughout Germany and Austria, we are constantly astounded how backward we in America are as a country. High speed trains, cutting through mountains. High speed free wireless internet access in tunnels ten miles long (while even cellular cuts out for us on long expanses of Texas highways).
We live in the new "Jerry world" of Cowboys glitz and glitter - and can't get on ANY highway without a toll. In a privatization of infrastructure, the only projects that will be launched will be in the best possible potential rates of return - mine.
Unfortunately this will do nothing for my neighbors to the south. No private entity will ever choose to build a new six lane toll way to south Dallas. And because of that, businesses will not likely move to south Dallas. The cycle continues.
This plan is short sighted at best - and extremely detrimental to our long term stability at worst.
As my family and I travel throughout Germany and Austria, we are constantly astounded how backward we in America are as a country. High speed trains, cutting through mountains. High speed free wireless internet access in tunnels ten miles long (while even cellular cuts out for us on long expanses of Texas highways).
We live in the new "Jerry world" of Cowboys glitz and glitter - and can't get on ANY highway without a toll. In a privatization of infrastructure, the only projects that will be launched will be in the best possible potential rates of return - mine.
Unfortunately this will do nothing for my neighbors to the south. No private entity will ever choose to build a new six lane toll way to south Dallas. And because of that, businesses will not likely move to south Dallas. The cycle continues.
This plan is short sighted at best - and extremely detrimental to our long term stability at worst.
13
I don't want other countries to invest in America's infastructure and make profits. I want our tax money to be used to build and maintain the infrastructure of all 50 states for the benefit of the taxpayers. Government should not be run like a business to profit business investors. How many times do we have to say that?
21
Don't misunderstand the goal in these proposals. Windfall corporate profits for inferior products with no accountability is not a flaw in the plan. It is the purpose of the plan.
19
Before citing China as a success maybe pick up a subscription to the Times? Just this week there was a story about the many boondoggles China has built (and is building).
https://www.nytimes.com/2017/06/10/world/asia/china-bridges-infrastructu...
https://www.nytimes.com/2017/06/10/world/asia/china-bridges-infrastructu...
2
Yes China wastes a lot of money on projects for connected individuals, but it also moved into the future. Building a magnetic levitation train gives you expertise for selling them to the rest of the world. We invented solar power, but China is building it, getting the practical experience of manufacturing it, and installing it, getting the free energy that follows.
Meanwhile America is going backwards, subsidizing 19th century technologies and waging war for oil, while it bridges fall down.
Somehow China manages to protect its interests around the world without projecting military force into every corner is the world.
If China combined is forward looking investments with actual democracy they would be much better off. If we could take back our democracy and start investing in people instead of corporations, we would be much better off.
Meanwhile America is going backwards, subsidizing 19th century technologies and waging war for oil, while it bridges fall down.
Somehow China manages to protect its interests around the world without projecting military force into every corner is the world.
If China combined is forward looking investments with actual democracy they would be much better off. If we could take back our democracy and start investing in people instead of corporations, we would be much better off.
10
Yes! And once upon a time we invested in putting a man on the moon. How many advancements did that small step pay off for future generations?
4
You're preaching to the choir man.
Trump's trillion $ infrastructure sounds an awful lot like many of his business and charity operations: someone else puts up the money, and Trump takes the credit. Or worse yet, Trump takes the money, declares bankruptcy, and runs away with everyone else's money.
33
absolutely no go.he is selling this country to anyone who wants in.Plus,in doing so,he's handing more $$$ to the 1%.federal,state and taxpayer $$ should pay for infrastructure.
19
When will we lose our idiot idea that because business are alleged to "know how" to make money, that this makes them superior at providing public services?Such services, such as public housing, or food stamps by their nature, often lose or don't make money and must be supported by donations from taxpayers. But businesses know this and they are desirous of turining the relationship upside down to force us to pay for what is already "ours".
Had NYC relied upon private companies , rather than selling bonds and collecting tax and toll from all, there would be no bridges, no highways and we would be sending people across the the rivers in small rowboats. It needs to be said: NYC is what it is now, after decades of being in a crumbling and apparently dissolute situation. Finally, more people decided that an apparently "crumbling" NYC was better then an empty plains state or a rainless California, and so we now have a bustling city. We're underserved by transit, or local business still. . . . All of NYC relies on it's well known system of sludgy-slow government to hold the wire and gum of boroughs together. But did we leave it to Business we would be another LA-all flat and totally unserved at all.
We need government action, to treat us all equally poorly, or we are nothing-better to give it back to the shellfish and the Manahattos.
Had NYC relied upon private companies , rather than selling bonds and collecting tax and toll from all, there would be no bridges, no highways and we would be sending people across the the rivers in small rowboats. It needs to be said: NYC is what it is now, after decades of being in a crumbling and apparently dissolute situation. Finally, more people decided that an apparently "crumbling" NYC was better then an empty plains state or a rainless California, and so we now have a bustling city. We're underserved by transit, or local business still. . . . All of NYC relies on it's well known system of sludgy-slow government to hold the wire and gum of boroughs together. But did we leave it to Business we would be another LA-all flat and totally unserved at all.
We need government action, to treat us all equally poorly, or we are nothing-better to give it back to the shellfish and the Manahattos.
8
As a former public transit employee, I've seen firsthand some of the financial and organizational infrastructure that is necessary to prevent corruption (as opposed to legal infrastructure that investigates and prosecutes after the fact.) Some examples of this include rigorous and transparent procurement procedures; accounting systems that carefully track payments against the original contract; government employees who audit, and government employees who maintain the records that will be audited. This infrastructure is built upon solid accounting principles that have been carefully automated over the decades. What goes along with these established procedures are strong organizational cultures upheld by experienced local and federal government workers. Going private would allow these institutions to wither and die. Flint is a good example of why addressing corruption (and/or governmental incompetence) retroactively is obviously not as effective as just maintaining and improving our well-established systems of public investment.
29
Goldman Sachs and other Wall Street opportunists have been putting together deals like this all over the world for years. They always turn out well for them (they collect huge fees up front), frequently benefit investors (if they are savvy) and almost always prove to be bad deals for the governments, taxpayers, toll payers and public in general.
This whole notion of privatizing government services and investments is a variation on trickle down economics. The private sector is supposedly more efficient and this supposedly makes up for the profits they make. Very rarely does this actually happen, especially in infrastructure projects. Just as tax cuts for the wealthy rarely trickle down to benefit the non-wealthy.
Why do these self-serving myths endure despite their proven fallacy?
This whole notion of privatizing government services and investments is a variation on trickle down economics. The private sector is supposedly more efficient and this supposedly makes up for the profits they make. Very rarely does this actually happen, especially in infrastructure projects. Just as tax cuts for the wealthy rarely trickle down to benefit the non-wealthy.
Why do these self-serving myths endure despite their proven fallacy?
36
The GOP merely see an opportunity to create a lot of political favors by awarding contracts that are a boondoggle. After those contracts are handed out, they anticipate money pouring into reelection campaigns. None of them care about infrastructure as a net gain for the public. They only care about the money that will come rolling in to maintain their power. This looks like a good way to do it. And why do your writers say it's a Trump idea? The entire GOP supports this kind of money transfer from taxpayers to the private sector.
23
A least when I pay bridge tolls in the Bay Area I know the tolls will go into the government's pocket, where it has a fair chance of being spent for the public good.
24
If Trumps investments are any indication of what private infrastructure would look like we know where this is heading.
17
I see many toll roads in our future...
9
A $1 trillion boost to fix aging infrastructure is much too little.
Manhattan alone needs that much to fix its subway.
How much more for the Access to the Region's Core Project (ARC), the Northeast Corridor (NEC) Gateway Program, the Hudson Tunnel Project, the Portal Bridge Replacement Project, ...?
How much more for Los Angeles, Chicago, Houston, Phoenix, Philadelphia, and the rest of the country? What about high-speed rail? Modern airports?
Manhattan alone needs that much to fix its subway.
How much more for the Access to the Region's Core Project (ARC), the Northeast Corridor (NEC) Gateway Program, the Hudson Tunnel Project, the Portal Bridge Replacement Project, ...?
How much more for Los Angeles, Chicago, Houston, Phoenix, Philadelphia, and the rest of the country? What about high-speed rail? Modern airports?
4
Any effort involving human beings will involve waste and corruption. As a result both the Public Financing and the Public/Private Partnership options will inevitably be flawed. As I see it Public Financing has four advantages in the current situation:
1. Trump will use the Public/Private partnership to funnel money to his cronies and perhaps via them to his own pocket.
2. Due to the strong dollar the cost of borrowing by the US government is virtually zero which will reduce significantly costs and more of the dollars spent will go to real assets and less to interest on the debts.
3. The Infrastructure Projects themselves and the process of building them will be more transparent in the Public domain which should help reduce corruption and waste as well as prevent the "overbuilding" which both India and China have experienced.
4. The Public route has been done before and we know it works. Now is not the time for experimentation.
1. Trump will use the Public/Private partnership to funnel money to his cronies and perhaps via them to his own pocket.
2. Due to the strong dollar the cost of borrowing by the US government is virtually zero which will reduce significantly costs and more of the dollars spent will go to real assets and less to interest on the debts.
3. The Infrastructure Projects themselves and the process of building them will be more transparent in the Public domain which should help reduce corruption and waste as well as prevent the "overbuilding" which both India and China have experienced.
4. The Public route has been done before and we know it works. Now is not the time for experimentation.
27
Government has no need for profits. That means that a " market solution", to spend less and still make a profit, it has to either build a lower quality product, or pay lower salaries to workers and lower prices to suppliers. If you save by paying less to suppliers for the same quality materials, then those employees are the ones getting lower salaries.
The bottom line is that for the project to be overall "cheaper", a few have to benefit a lot, and a lot have to have less benefits. Way to grow a fair economy, where "working habits" have the prize of a good life! (Yes, I'm mocking you Mr. Free Markets!)
The bottom line is that for the project to be overall "cheaper", a few have to benefit a lot, and a lot have to have less benefits. Way to grow a fair economy, where "working habits" have the prize of a good life! (Yes, I'm mocking you Mr. Free Markets!)
30