Please remind readers of how the GOP repeatedly shot down President Obama's plans to help the nation recover from the Great Recession by investing in infrastructure. Year after year, they blocked his proposals and cut his budget requests, claiming that they would "add to the deficit." What hypocrites. Their tax legislation will already add over a trillion $$ to the deficit in spite of their years of claiming that they were "deficit hawks." So how exactly would this administration pay for an infrastructure plan? And who will exercise oversight to ensure that any such public/private plan does not just result in yet another windfall to Trump's unsavory cronies in the construction industry? See, e.g., construction of Trump projects in Atlantic City and in New York.
1
Obama gave up on all the shovel-ready stuff HIMSELF.
The official answer was that there was too much preparation and paperwork and due process to get anything started soon enough.
The skeptics' thoughts were that far too many capitalists who would make money on the projects for a dedicated socialist ideologue to go along with all those jobs.
Why are people harping so much on lack of infrastructure spending now that a Republican is in the White House? I don't recall reading about the severe lack of infrastructure spending during Obama's presidency. why is that NYT?
1
Well, in fact is has been talked about for some time now. However, it could not get traction in this "do nothing" congress.
The lack of coverage of problems with the infrastructure in the news during Obama's tenure in the WH is probably due to the fact that the news was focused on what was going on in Congress, primarily the Republican obstruction of everything Obama tried to do while in office:
The Senate's Republican majority leader's only reason for being, per his own statement, was to make Obama a one-term president—a failed project that took-up the entirety of Mitch's time and energy (and, thus, the government’s) during Obama's first term. His next term focused McConnell on the war to keep millions of Americans is a dismal state of health and at the mercy of greedy insurance companies (and the lobbyists who were lining congressional pockets)—that complained loudly about their road to financial ruin in the news section, while bragging glowingly about their ability to pull in profits for their stock holders in the financial section. If The Republican-led Congress has made noise about the infrastructure, the paper probably would have covered the story.
What was playing out in your head while Congress was building a wall around the WH during that time?. . . how badly Obama was doing at cleaning up the mess "W" left him with? I'll bet.
Chris,
You mean those "shovel ready projects" were ineffective? Do tell.
The true issue is that many Republicans no longer participate in government other than as "takers." They actively run against a "big government" composed of liberals, minorities and Democrats. Meanwhile they take tons of subsidies and tax incentives. They no longer believe that the common good can be achieved through any government action, so they have abdicated their watchdog role. They no longer care about making government better believing that poor government performance will support their point of view. This "sabotage" is really whats holding back the country.
vacuum of bipartisan leadership has let governments under perform in the delivery of services.
Trump is being dishonest, per usual, sure. But Krugman is being facile.
Private investors don’t need a “guaranteed” return, only the prospect of one. Risk and reward, plain and simple.
The return on their investment need require neither ownership nor tolls. In return for building and maintaining a highway, for example, the government might promise $x per year from general revenues.
I’m sure Trump has no such arrangement in mind. But “only” and “must” are too definite. There are other ways.
Trump with misleading statements as usual. There's a reason why public goods exist; corporations cant profit off of some things to an adequate degree to justify initial investment.
As I write his, I'm riding through one of the world's richest metropolitan areas in a creaky 40-year-old train car. Like our social safety net, our public infrastructure is a laughable embarrassment when compared with the rest of the modern world.
Are the Trumpers going to do anything about it? That is equally laughable. They will loot the treasury to the extent possible, while building as little as possible as cheaply as possible. The rest of us will pay the bill, forever.
Think I'm wrong? Take a look at Atlantic City, a monument to Trump.
1
Atlantic City is a monument to Democrats corruption and greed. Where did the money go? Answer- into the pockets of the Democrats who control Atlantic County and the state. As to colossal flops , the 1Billion plus Rebel Casino is the true winner! The people of NJ are holding the loosing hand on this one. The pot has already been taken.
I've worked in the private sector, detention facilities, that were previously run by the gov't and we were more than encouraged to do whatever it took to reduce expenses. Right down to limiting the amount of toilet paper allotted per use.
$1.5T? The tax cuts should be able to cover that in a couple of weeks. Just look at Kansas.
1
The collapse of the private contractor, Carillion, in the UK and the problems of others like Capita, should be a good example of the dangers of using private contractors to do public infrastructure. Britain wanted to avoid increasing public borrowing and so shifted work to private contractors to build and operate facilities and services for profit.
Britain nationalized a lot of infrastructure that was then privatized in the 1980's. The results have not been pretty, with high costs and companies milking profits from their local monopolies. As the recent debacle on some rail lines has demonstrated, private companies hand back any mess to the to taxpayers who rely on the monopoly service. It's a "heads I win, tails you lose" situation.
It is high time the benefits of public ownership are relearned for infrastructure that is best realized as a public good or service.
2
The state of Indiana was given a very harsh lesson from a privatized toll road that lifted tolls to facilitate speed and safety in emergency evacuations because of storm threats. The price of this is when the owners presented a huge bill for the lost toll revenues to the state! Fortunately, Florida, which has not given to the siren song of the vultuerteers , has been able to suspend tolls to facilitate evacuation due to hurricane threats of huge bills from owners
We have two clear models for privatization in the U.S. today: the prison system, and military contracting. Both have become models for cronyism and corruption, and neither saves the taxpayer money. Why would we want to repeat this experience with roads and bridges?
5
this sort of public/private initiative has been well studied especially here in Kansas. it works as another way to subsidize businesses, but is very prone to corruption. One of the companies hired to do construction work on wichita state university's new innovation campus was found to have links to a member of the board of regents. localnews papers have been investigating the university president but haven't yet published any conclusions about him.
Trump seems to be taking a page out of his pal Vladimir ‘s playbook. Give your cronies a chance to enrich themselves by taking over public assets and you can stay in power for life! Sad and scary.
4
More smoke, mirrors, and lies as Pres. Trump and the Republicans transfer assets belonging to and paid for by Americans to the top one percent and hedge funds.
2
Every single thing this guy does involves a major grift. I have lived in every part of the US except the South, and including NJ and Alaska, and Trump's whole personality is based on the short con. He is a con man's Hall of Famer, the Ty Cobb of the short con.
5
I just don't get it...giving $1.5 trillion away to the rich folks who least need it, instead of using the money for much needed infrastructure improvements. I have no faith that private companies can step up to do the job without a focus on their bottom line and screw the regulations (which Trump's EPA, Interior and other departments are doing currently). I think the man is hoping he will be out of here in three more years and then blame the next administration for not handling what he left (as a mess).
4
Fool me once....shame on us both! We won’t be fooled again! Trump believes the people to all be fools! Like the poor rube contractors in Atlantic City who he stiffed. Having essentially ‘gotten away’ with it once (how many times actually?) he’s convinced that his silver tongued oration will turn the trick again. Nice try, except for the slippery lizard GOP Congress. Mention “privatization” and they salivate. Trump is nothing without his enablers! With the midterms coming up and having been fleeced by the “tax cuts” the electorate has the ability to vote for accountability! If they do not, it ain’t Trump’s fault nor to his credit.
2
Today's train accident is a golden pass allowing all media outlets NOT to have to even name Pres. Trump today after last night's victory dance.
Privatization is the worst of public and private.
Politicians get an easy out for their hard problems, so even selling for a pittance is still a win for them.
Private gets a monopoly, no competitive market, so has no incentive to do a good job.
3
Can't address high speed rail really, however I do remember a proposal by Mr. Obama to fund a study, of high speed rail..the focus was in the midwest I believe this was to be perhaps the first step of a nationwide system.
Mr. Obama was a very moxie politician, not to be confused with the outfoxed and bitter McConnell who used ugly sledgehammer tactics to incite his vulgar base, but again Barack could also be simplistic, surrounded by bigots and racists this simplicity often came across even to his base as detached and uninvolved. However the same simplicity he showed was in reality just more of the far reaching, patient (the key here) and pragmatic thinker he actually was..and he imbued these qualities to those around him. But he was also detested by the right.
My point is that all of what we are both seeing (the steep climb in the markets) and hearing from the children at 1600 now was absolutely in the works. Pressure from employers to both raise wages and expand operations on the mfg. side was inevitable, yes even at the old tax rate(s)..the money markets were ready to burst with surplus cash the markets could not hold their collective breath much longer. Yes they wanted an unrestrained capitalist..a Grover Norquist guy (CPAC, 2010), and so the timing was for them a wink and a nod but it was baked in. But alas America is a lot of things..but patience is not among them. So now rewarded with 70$ a mo. will voters let the GOP pass a 1.5T pkg. sure to further sink the GOP?
2
If you want to know how bad privatization can get look at prisons. You won't get the scoop from traditional sources. You have to know someone who went through the system: most people who do so don't talk to reporters.
In the Kentucky system, the private company gets half of what goes on the books for an inmate. The prices for even a defective tooth brush is marked up more than 100%. That's okay, the governor gets his cut as a shareholder. You don't dare complain or your inmate will be punished.
Small wonder that the likes of Jeff Sessions is promoting private prisons: he's invested there.
7
NEVER TRUMP is not a solution to the $3.5 Trillion that ASCE claims we need to spend on infrastructure immediately to keep the system from collapsing in the next decade.
Yet, Krugman Paul offers his usual way-off-the-mark economic assessment. No, the global financial markets did not collapse, never to recover. No, Civilization did not end.
No, the "leaked draft" published by AXIOS did not say "the plan" called for only $200 billion of federal money. In fact, the 6 page draft did not include one reference to money. No $1.5 Trillion. No $200 Billion. No dollar signs in the draft, Paul. From whence did you spirit them?
The "draft" is just that. A draft. A working paper. A starting point. The idea of a draft shouldn't be hard for an academic to understand. A draft can't buy space at a conference, let alone publication in a peer reviewed journal. It's considered half-baked. Not for reference.
During the campaign, KP's gal proposed spending $250 Billion on infrastructure over TEN YEARS. The engineers claim we need $3.5 Trillion RIGHT NOW. At least Trump upped the ante.
The one thing that really surprised me when I first arrived in the United States to go to university was how dilapidated the infrastructure was. My image of America as the land of milk and honey was crushed right from the airport. I got a fantastic education and chose to return home, where our infrastructure is no better than the United States, but at least we recognize it and are trying to legitimately fix it.
I hope America recognizes the need to fix theirs too.
5
Why can't a sewer system be turned into a public utility?
Trump wants us to "work together" to achieve many of the problems facing Americans today and our crumbling infrastructure is at the top of the list. So let's work together on this project and you can start by dumping your unneeded tax giveaway and invest the 1.5 trillion on our infrastructure needs. Trump, you really need to "MAGA" on this very important and critical need.
1
Is it fair that, if government privatizes public water service, taxpayers could see a substantial increase in the cost of filling the bathtub in which Republicans will drown government?
1
http://cepr.net/blogs/beat-the-press/donald-trump-calls-for-spending-0-0...
January 31, 2018
Donald Trump Calls for Spending 0.08 Percent of GDP on Infrastructure Over Newt Decade
Some folks may have been impressed with Donald Trump's plan for $1.5 trillion in infrastructure spending over the next decade. This is both because they have little sense of the size of the economy and also because they don't realize that he is not proposing for most of this spending to come from the federal government.
While he didn't lay out a specific plan, past documents indicate that he wants the federal government to increase spending by $200 billion, with the rest coming from state and local governments, as well as private investors. Since GDP is projected to be almost $240 trillion over the decade, Trump is proposing to spend an amount equal to a bit more than 0.08 percent of projected GDP.
-- Dean Baker
2
While not every road is a public/private partnership in the making, many opportunities are out there. My favorite is the air travel system. Airports and the air traffic control system could all move off the public system. As shown around the world, this would improve both facets. And if Amtrak could go too, along with an end to the federal micromanagement, that system might be able to shrink appropriately, focus on Acela and actually pay for itself.
Further, using federal money to catalyze local action with local resources is a welcome switch from today's approach of using local money to obtain federal spending. Most infrastructure is primarily local in its impact. It makes complete sense to use local resources to provide it. Would it be a bad thing to shift the federal gas tax over to the states? I'd even support making it deductible if we could do that.
1
State and local taxes are no longer deductible, thanks to the new tax bill.
1
The Puerto Rico debacle is an excellent predictor of what a Trumphrastructure project would look like. Trump and cabinet cronies vacuuming contracts with sweetheart provisions and then stiffing we the people every which way.
Trump simply knows no other way to do business.
7
The infrastructure in PR was built by Democrats not Republicans! It explains why some of the most expensive roads are built in blue states.
As usual the author hits the target. If Americans still do not realise they have been fleeced enough by this blowhard conman then they deserve whats coming next.
2
More words of wisdom from the Nobel winning economist who told us that the markets would never recover from a Trump presidency: https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016
Yea, but we haven't seen the bubble burst yet. Predictions in economics cannot give you the exact date. Besides, there's a law against predicting the exact date.
1
That's because scientists are human beings too, SO they have personal opinions and emotions too, remember?
What Krugman said during electing night, as he immediately afterwards explained, was that IF Trump would immediately start implementing his disastrous economic ideas, then he feared there would be a global recession by the end of this first year already.
That's a FEAR. An emotion. Based on an opinion, which itself was based on his experience as an economist.
Immediately afterwards already, he TOLD us this was not a scientifically proven fact, but a personal emotion.
What's even more, Trump did NOT put into practice any of those ideas yet, and that's why the recession didn't happen yet - in fact, when it comes to the economy, Trump actually didn't sign anything serious into law yet, let alone have it implemented yet.
So maybe, just maybe, instead of pretending that if someone expresses a personal fear which he himself then puts into context, he must be an idiot with no expertise whatsoever in his own professional field, you could try to actually READ what he said, and then, if you think you disagree, try to give us some arguments showing WHY you'd disagree?
Or do you simply want to believe no matter what Trump says, even though a lot of it are proven lies (and contrary to Krugman he never admitted anything ... ), and reject what people who don't seem to like Trump say, because that's how you prefer to deal with the truth ... ?
2
The last 12 months has demonstrated how fake most of the loudly proclaimed GOP positions are. Historically the GOP has pretended to be anti-communist and pro-law enforcement. I say "pretend" because we've now seen that they welcome Trump as a Russian agent (a "useful idiot"?) and are vigorously attacking the FBI. The one thing that is consistent with the GOP is that they do not believe in fixing things -- if they think there are problems they want to destroy rather than fix. Oh, wait, there are also consistent on wanting to take care of the super rich.
4
All of which only puts one more feather in the crown of the King of Fraud.
Wisconsin under Scott Walker is in the process of spending $4 billion in taxpayer money to get Foxconn to build a factory south of Milwaukee. This is apparently what it will take to get them to open a plant they will own, which will produce LCD screens they will sell and the profit on which they will collect. That $4 billion works out to 40 percent of the total investment, And we're supposed to believe $200 billion in federal tax money will somehow induce unnamed private companies to spend seven times that building infrastructure over which they will necessarily have limited control and from which they cannot expect to extract much profit? No, what will happen is companies seeking favors from the administration will eagerly sign on, only to pull out when they realize the limited potential, leaving taxpayers holding the bag along with a lot of unfinished "infrastructure," aka monuments to Trump's stupidity.
5
Sounds like the kind of cracked-brain thinking you would expect from Scott Walker. He's only there, after running Milwaukee into the ground, because he's a sock puppet for the Koch brothers.
2
Paul, why stop at infrastructure. Trump's middle name is scam. The guy's made a career at trying to pull the wool over customers eyes no matter what cockamamie enterprise he's engaged in. He's attempting to do the same in government. What Trump and the Republicans need come November is a rude awakening and a swift kick in their be-hinds. Trump, Ryan, McConnell are the lot of them are the worst.
DD
Manhattan
4
Make America Great Again: IMPEACH TRUMP.
5
Here in Brevard County the toll was to be removed on SR528 when it was paid for, but it took another year of tolls just to pay for removing the tollbooths. In Orange County new tollbooths are going up everywhere, at enormous cost. Gas taxes are already in place, so changing the rate would cost nothing. The Turnpike Authority has become a self-licking ice cream cone.
6
NOW imagine that process being done by the national government and you get an idea on why most Americans distrust all levels of gov't.
Toll roads make sense to me: They seem fair, because those that use them have to pay for them. Why should nonusers pay for a new road -- through federal taxes -- in another state where they never travel?
Am I confused? Or did I miss my calling as a visionary macroeconomist because I can see the forest and the trees? Or is it just time to up the old psychotropic drug dosage again? (I'm about maxed on them.)
Jim this is very shortsighted
Why should I pay for the post office if I don’t get mail. Why should I pay for public school if I don’t have kids. Etc etc
Roads are essential for commerce. Out interstate transportation system helped build America into the economic giant it is today.
2
Do hou every eat food grown out of your area? Did you buy a car made solely with parts from yourtown? Do you wear clothes only made with products from yourregion? And more ,,,, Interstate commerce males pur way of life possible. Do you get that?
2
When government invests in infrastructure the money stays in America. When government sells
out to the private sector, foreign interests will be first in line. If Westfield and Macquarie aren’t
already in your neighborhood, they’re coming to say g’day mate!
5
"a plan to convert what should have been public projects into private ventures"
Why does this sound like Russia immediately after dissolution of the USSR?
4
This whole privatization thing is based on the slavery model. The extreme capitalists believe that laborers who work under the socialistic collectivist model have no incentive to work. In order to get things done the extremists believe, the workers need martinet overseers who will crack the whip if the workers shirk. Many conservative, southern and rural voters adhere to this.
1
And then there is "human infrastructure". Germany spends $13 Billion a year on internships for its youth. That’s 650 times as much as the U.S. which is four times Germany’s size. College is free in Germany. In America we try to bankrupt our kids before they graduate.
My opinion is that Republicans are the reason why our infrastructure is lagging. After the huge tax cut Trump and his kind got, after the usual Republican military build-up, and now the Trump militarization of the police forces - I mean, where is the money coming from?
Let's not forget the baby boomers flooding medicare and social security. Where is this money coming from? Not from Trump's multi million dollar tax cut.
5
Krugman: "What this means is that we aren’t talking about a program to build infrastructure so much as a plan to convert what should have been public projects into private ventures, presumably with big tax breaks."
Isn't this the routine story with Trump's initiatives? What we get from Trump is one con job after another, whether it is a tax break for the week-heeled with the claim of it primarily benefiting the middle-class or taking away health care from some of the most vulnerable with the claim that they will get a better plan and have better options or the "clean coal" canard that will satisfy the energy needs of the American people. Nothing he says can be accepted at face value. "Alternative facts" prevail over reality on a daily basis.
5
There is one issue, and one issue only, that I agree with Trump on, and that is immigration.
The fact that we have 11 million+ illegal immigrants in this country (many who have simply overstayed their Visas) is proof positive that our immigration system is broken, badly needs fixing and serves as a testament to the fact that neither R's or D's have done right by the American public on immigration for decades.
Trump is not proposing anything radically different than what Canada is doing. I would encourage Democrats in the House and Senate to work with Trump and the Republicans to fix our broken immigration system. There may never be a better opportunity.
4
Problem: after Obama worked hard on immigration reform, Congress ALREADY wrote a bipartisan comprehensive immigration reform bill. Then a couple of pro-Trump Republicans destroyed it, remember?
And a few weeks ago, Trump claimed in front of television cameras, during a bipartisan meeting, that he'd sign any compromise bill that could pass Congress, AND that he'd sign a clean Dream Act into law (a bipartisan bill written in 2001 and that more than 80% of the American people and 70% of GOP voters support, but that Republicans time and again torpedoed in Congress).
So once again, Congress comes up with a bipartisan comprehensive immigration reform bill, including the Dream Act.
Instead of signing it into law as promised, however, now it's Trump himself who all of a sudden flip-flops and refuses to sign it into law. He now even refuses to sign the Dream Act.
And now you believe that if you want comprehensive immigration reform, TRUMP is the guy you agree with, and it's Democrats who should start to do more ... ??
On what planet are you living?
3
Ana, I am living on a planet where there are 11 million+ ILLEGAL immigrants in our country. My question is what part of ILLEGAL is it that you do not understand?
1
I would NEVER want to immigrate to Montana. How many immigrants do they have? On my street here near Miami about half of the households are immigrants and we get along just fine!
2
In Australia we have had successive governments doing this sort of thing for years and there is a real governance failure of having private sector financiers dictating public infrastructure prioritization and investment. The worst problems (as I see it) are:
1) Decision making on whether a project is done, or which option is chosen is based on which one has the least cost to the government budget and the returns to the private investor, not the outcomes of any robust cost-benefit analysis. Poor project selection is the result.
2) Most of the projects are proposed and developed by big engineering companies, where the real returns are in the construction, not the ownership. This has resulted in very dubious demand forecasts that have not been realized for any of Australia's toll road or bridges in the past decade. Contracts have then been structured where much of the revenue risk has been pushed back onto the taxpayer (e.g. revenue guarantees based the dubious demand forecasts).
3) The latest silly idea is "asset recycling", where our Commonwealth Government has incentivized the individual states to sell assets that cover costs or make a modest return (e.g. water supplies, ports) and invest in assets of little/no merit (e.g. underutilized sports stadiums). This has made the deficit worse.
4
"Caveat emptor"--let the buyer beware!
I've worked on numerous PPPs (public, private projects) for a leading multi-lateral development institution. They are hard to do, take time, and require strict supervision of construction as well as subsequent tariffs or user fees. They are subject to constant private sector hold-ups and haggling over costs threatening shut-down if demands for higher fees are not met.
User fees must be high enough for the sub-contracted corporations to make a decent return on their investment. That generally means high cost, reduced quality or both. Bidding low to win contracts and afterwards demanding contract revisions is a constant along with new, unforseen work orders. Alternatively, why would a corporation undertake a PPP rather than wait for consulting contracts that put the financial burden squarely on the Government? And yes, be very concerned about chrony capitalism.
$200 billion? That's the cost of the bridge in Brooklyn someone is trying to sell us. Real infrastructure reform will cost $1.5 trillion. And the GoP just drained the public coffers with a tax reform benefiting the wealthy. Trumpfrastructure is but one scam on top of another. A sort of infrastructure ponzy scheme. The numbers simply don't work.
8
I worked for a company involved in those type of projects too. Early on, I worked on a bid with a fixed priced that was below construction costs. I was told not to worry because there would be change orders and backcharges.
4
But then the privately-owned must be treated as a public utility.
Regulated! But Republicans want to deregulate everything. How will that work?
Controlled rate of return! Limit the ability of the 1% owners to arbitrarily raise prices? And who is going to do that? Republican-controlled government?
Privatizing infrastructure is preposterous.
6
Even Before Trump -- say 20B.T. -- we had Republicans considering privatization of water and vowing to shrink the national government to a point small enough it could be drowned in a bathtub. That party, and to some extent that of the Democrats, long ago made personal income part of engaging in public affairs. We're living amidst these lies. We step over the bodies of nearly dead homeless while we hear that unemployment has not been lower since the 70s. We've singled out more countries as our enemies than our friends. In this first year After Trump (A.T.) the press has gone all giddy over his not tweeting for a day, and for using a teleprompter for his State of the Union address. We've set our standards a bit low.
4
The NYT regularly tells us (including in today's editorial) that we should believe that Democrats fail to develop a coherent narrative/message/voice, but if there's one totally incoherent narrative out there, it's the one Republicans are touting for years now.
On the one hand, they claim, THEY are the only "real" Americans/patriots, and the only ones for whom "USA" isn't just a rallying cry but a fundamental value, standing for a nation that is as exceptional as it is worth fighting and dying for.
As soon as it comes to one or the other real fight though - in this case infrastructure, for instance - they immediately backtrack and don't believe that it's possible to achieve something as a nation. All of a sudden, "America" disintegrates into a loose collection of individual atoms, each trying to win against his own neighbor, and it's this kind of 1-on-1 fights that is then supposed to miraculously produce a benefit not only for the individual who wins but simultaneously for the entire nation.
HOW could constant competition among individuals who only believe in one value - their own money - somehow result in what benefits an entire nation? Apart from an "invisible hand" that nobody has ever been able to prove to exist, they've never answered this question. They rather jump to "and THIS is the most patriotic way to care about "America"!".
Democrats have always stood for a nation where TOGETHER we get stronger, which is by far the most coherent "patriotism" out there ...
5
Although it may be easy to say private investment may substitute the government in building, operating, and maintaining projects for public use, but it is not so. If we look at private investment projects anywhere in the world we can easily see the maximization of profit soon turns into cronyism, corruption and worse service. And, similarly, it may be easy to say the citizenry would have to pay the private investors and think of this payment as another tax, but that is not the case. The payments turn out to be much higher with no accountability to the users. This type of thinking is well suited to Trump because he is not interested in the public good but can sniff out an investment opportunity. Too bad he hasn´t demonstrated such a business acumen during his career. Just look at the bankruptcies and bills he left behind without paying. S.O.S.
6
I have a "rule of trump" in the Post-Obama-Alternative-Reality Trump era that is at least 98% accurate and requires no analysis. Simply put, the rule of trump says: Whatever Trump says it is always a lie and it will always benefit the top 1%, particularly himself.
2
Thanks for a sane response to political theater. From the vestal virginus Melania in white leading in the heart-rending exhibits of personal disaster and heroism, to Donald J. Trump faithfully following his speech on the teleprompters, the SOTU speech was nothing except empty rhetoric and cheer-leading. A travesty.
Democrats did no better. They did not manage to take the high ground in their mourning dresses. Joe Kennendy was a throwback to the Age of Kennedy's which was deja vu all over again.
Democrats need new vision. Fresh candidates with more than unlimited immigration views talking about politics with the authority of millenials.
Until America ceases to brainwash voters with demonstrably false information via Fox News, our country will continue its sad decline. Whatever the speeches are will make no difference when voters do not have accurate information upon which to form their opinions and vote. Jimmy Kimmel demonstrated this on his program. No one else did.
3
Easily funded by increasing the fuel taxes. Like in most of the developed world.
But pragmatism is so boring isn’t it?
3
Having listened to the SOTU and reading the fact checks, the only conclusion that makes sense to me and i'm sure many other citizens, is the not so slow demise of the USA. DJT for all his bluster is nothing more than a pawn in the right wing conspiracy which has evolved over several generations in a peaceful overthrow of our democracy. They have created an uneducated and uninformed electorate who are proud of their lack of ability to understand what's happening. They cast their votes based on the reverence of the stars and stripes, and other patriotic symbols which were clearly in evidence last night. The paradox will be their reaction when they become negatively effected by the misguided policies of the GOP. They will blame the Dem's and elect Hannity.
2
Trump is selling privatized infrastructure at a time when Americans are rejecting gated main streets (a.k.a. Malls) where private investors decide who comes and goes. E-Commerce developed and disrupted that model.
Sydney has 2 hated train stations on a public rail line that are outrageously expensive to enter and exit, both gateways at the Domestic and International Airport Terminals. The result? More cars on the road. Families opt to drive because they cannot afford to take public transport. Privitization has unintended consequences, but
the main ones are gate keepers and the loss of public control.
1
With all due respect, the SOTU address did not give the impression that the new administration understands or has a policy solution to America's transport infrastructure problem. The steel-wheel, steel-rail passenger and freight system is too slow, very difficult and very costly to maintain, and difficult to operate safely. Clearly, the food and material needs of modern America is being satisfied by highway freight trucks, delivery vans, and costly air freight and air carriers over other modes like rail. There is still a place for rail because low time priority commodities can be shipped on established lines and the value is still in place -- ask Warren Buffet.
This country should take advantage of the James Powell and Gordon Danby's invention of the superconducting transport system. It has been proven by Japan and their new 2nd generation version is capable of carrying trucks as well as passengers, can be adapted the conventional rail, and can electronically not mechanically switch, Coupling this invention with the idea of the late Pat Moynihan's Senate Committee's to use the rights-of-way of our Interstate Highways, www.magneticglide.com & existing bridges, tunnels and stations to create a 300 mph. all-weather, national network for both freight and passengers by testing, and competing the 2nd gen system with the German, Japan, Korean Maglevs and with high-speed rail varients on measured cost and performance basis would be wise and fiscally prudent public policy.
1
PPP’s or private public partnerships are expensive because of the 30% profit.
The commons or public space should not be given up to phony entrepreneurs who are really grifting the system for their pleasure and will lie and scream about government whenever they can’t Grift.
Where are the public servants in the US of CNA?
2
Trumpf business experience is on the seedy side: real estate. So, of course his approach is to privatize. Privatization only works if there is enough of an independent government left to regulate it. Otherwise, toll road fill with pot holes while government officials ring their hands and promise they will do something about it; while taking graft from toll road providers. We saw this situation with the Ambassador bridge between Canada and the US. This situation was never resolved satisfactorily because of the corruption of the state of Michigan.
1
The federal contribution amounts to 13% of the total $1.5 trillion allocated for infrastructure projects with the balance coming from the elusive private investor.
In the unlikely event the private sector does partner, take for example a project over 3 years for a total cost of $1 billion with the feds chipping in $130 million.
The private sector consortium then borrows the balance $870 million at rates that are usually substantially above the Fed funding rate.
As a result a larger potion of the cost is allocated to interest, leading to a higher overall cost or less features in the final product in order to come in at the budgeted $1 billion.
Once the project is completed the asset (whatever it is) has to generate adequate revenues to allow the private sector partner to meet the interest payments on the $870 million plus contribute enough to the bottom line in order to realize the expected rate of return.
These revenues can only come from the user, as other commentators have pointed out, its taxation in another form. on the other hand an asset fully owned by the Feds/States need not levy user fees or if these fees are required they can be limited to the operating costs of the asset. Logic dictates that these fees will be substantially lower when compared to the Private sector model.
1
Many of the criticisms in this piece are valid. Numerous infrastructure improvements (levees and other types of infrastructure that are not fee dependent, many types of social infrastructure such as courts and police stations, infrastructure serving distressed or sparsely populated areas) cannot be monetized.
But well-crafted public-private partnerships (essentially long-term contracts) that keep infrastructure ownership in public hands and deliver cost savings over time, can work well. Such agreements have been used effectively in Canada, the UK and Australia to deliver a wide array of infrastructure.
Don’t throw out the baby with the bath water.
The best freight rail system in the world is the U.S. freight railroad system. Even the Japanese, French and Germans come to the U.S. to marvel and study the incredible infrastructure of our freight railroad system. No country moves more rail freight faster, cheaper and safer than here in the U.S. It is the envy of the rest of the world. Why?
By contrast, the U.S. passenger rail system is a joke compared to the Japanese, French and German passenger rail system. By contrast ours is more expensive, slower and less safe than the Japanese, French and German passenger rail systems. Why?
Does the fact that the U.S. freight railroad system being entirely privately funded and the passenger railroad system being entirely taxpayer funded have anything to do with the tremendous disparities?
BTW, I am a liberal progressive, and the above situation I really find bothersome.
1
The government had a big hand in the development of the transcontinental railroad.
https://en.wikipedia.org/wiki/First_Transcontinental_Railroad
The infrastructure issue is easy to solve. Double the federal gas tax. It currently sits at 18.4 cents per gallon and has been that way since 1993. It brings in about $25 billion a year, so doubling it would likely bring in another $25B a year. While that isn't $1.5 trillion over the next 10 years, it's not chump change either. And if the tax is pegged to inflation as the current one is not, it will go up each year. Most of us recall gas prices well north of $3 a gallon so adding 18 cents to the current price should not be a deal breaker. As an added plus, higher gas prices should encourage a move to more efficient cars.
2
Bill Clinton talked about that in 1996. During a debate with Dole, Dole pointed at Clinton and said he is going to raise your gas taxes. Clinton looked like he saw a ghost. Clinton's 16 point lead was cut in half. No presidential candidate talked about raising gas taxes since.
1
Actually, there is a way for sewer systems etc to generate revenue for a private investor: and that is the danger. The cost of many infrastructure improvements undertaken by local governments is recouped by realty tax assessments. Note that realty taxes are the highest priority of debt owed to creditors. Private investors can issue bonds the repayment of which is backed by realty taxes or which are paid directly by tax collections. The bonds may carry a variable interest rate, "protected" by rate hedging agreements. Thus the investor collects it's debts, interest and penalties as a high priority creditor with a first lien on all municipal real estate. The result is a bankrupt Harrisburg, Pa, or foreclosed housing developments in Arizona and Colorado where the developers were given the right to incorporate the development as a municipality and collect assessments for the infrastructure they put in place to complete the subdivision.
Foreign "aid" is often structured as loan secured by all of the borrowing countries natural assets and the infrastructure built with the loaned funds. This is how developing economies have been held back economically by so called progress.
The type of public/private infrastructure partnerships which may now be proposed may be profitable to the private investor...but devastating the the public.
2
I agree that there is a long overdue need to shore up and expand our country's infrastructure. Besides the underwhelming financing schemes mentioned in the op-ed, this is another excuse by this administration to further gut norms of environmental protection. He has stated a definitive rollback of perceived delays in future infrastructure planning and development --translation: let's further gut environmental protection and public input mechanisms. This will inevitably bring about irretrievable impacts to ecosystem integrity. Linear projects like highways, pipelines, etc are particularly harmful in causing habitat fragmentation. Classic protective mechanisms like NEPA, the Clean Water Act, and the Endangered Species Act can be critical to choosing least damaging alternatives to linear infrastructure projects and minimizing such impacts.
2
Part of the formula for private companies to make financial sense out of owning public infrastructure is that it is a tax dodge for them -- all that infrastructure turns into a huge depreciation deduction on their taxes. So, it costs some government somewhere even more money...
2
There are no easy fixes for infrastructure projects or other public works.
If government or semi-government authorities control the initiatives, the works drowns out in bureaucratic mess, inefficiency and zero accountability. New York City subway and Port Authority are prime examples where the losses are covered by rate hikes.
If the projects are privatized, the money is wasted through profits to major corporations and lobbying costs and other pay offs are covered as overhead.
The end results are largely same ... ordinary citizens pay the costs and suffer.
2
What a splendid little analytical essay.
2
Let me let me guess, Krugman’s infrastructure model is the ny subways system as illustrated by the nytimes expose.
1
After decades of immigration into NYC our murders have gone from 2,245 yearly to 290 last year; overall felonies are down over 80% and our economy is thriving. Am I missing somethinghing?
4
A scam: "a confidence game or other fraudulent scheme, especially for making a quick profit; swindle."
I'm not sure what "Trumpfrastructure" is since only Prof Krugman knows - he's clearly trying to invent words, not something a professional economist is actually trained to do.
However, I do know what "Obamacare" is, and it most assuredly is a scam by the definition above. The bulk of Americans were swindled by a smooth-talking fork-lipped Civil Activist-in-Chief, who swore on a stack of marked cards that we could keep our insurance plans and our doctors. Why is Prof K so blind? Because Socialists are always blind, deaf, and dumb.
1
Fork-lipped? Talk about inventing new words: Sheesh!
Why are countries like Denmark, Sweden, Norway, Finland, Canada, etc.and many more, able to provide universal healthcare for their citizens? Maybe leaning toward socialism,and the citizens are happier than they might be otherwise...healthier too. The backwardness and heartlessness of large swathes the USA is astounding. Why have universal education but not universal healthcare? Is there not a right to life in the USA?(or is for the fetus only?)How does name calling advance the conversation, and isn't that supposed to be "fork tongued" rather than "fork lipped". What is a forked lip, anyway? I would say that the former president is "silver tongued" compared to some other politician(s) I will not bother to name. His big mistake was to try to bring healthcare to the uninsured..?.and reviled for it by many. My American relatives appreciate President Obama for what he did, and tried to do. I am so glad I came to Canada to live: Best decision of my life.
Carolyn: Countries like Denmark, Sweden, Norway, Finland, Canada, etc., are able to provide "universal healthcare" because they have and continue to tax their citizens heavily. The price of gasoline in those countries is much higher than it is here. Their economies are not #1 - ours is. Their level of innovation and technical aptitude is less than ours. When was the last drug invented or discovered in the countries you named? That's right - it's been a long time, because their pharma industries are taxed to pay for the universal healthcare you think is beautiful.
If you want a true demonstration of "universal healthcare", the former Soviet Union should be your guide.
1
Does it work? Ask Chicago about their parking meters. No, seriously. Just think about that 4 fold increase in tolls!
https://www.theatlantic.com/politics/archive/2014/04/city-state-governme...
1
I agree entirely with Dr Krugman.
Please Americans, look across the Atlantic and see the utter failure of so-called PFI , and the collapse of Carillion which received billions of public money.
Contracts with private companies who built hospitals are costing the public a fortune which means that money is going to those companies while the public authorities cannot fund basic health care to the patients.
A bridge wa s built to the Isle of Skye a number of years ago. Eventually the government had to buy out the contract, costing them ten times as much as it would have cost to build the bridge themselves.
Trump’s scheme is identical, and only represents a way for tax money to be transferred to private profit.
3
great speech
After the massive tax giveaway to the rich and the drive to throw more money down the gaping maw of the bloated Pentagon, there is no money for infrastructure. Clearly nothing is going to happen until a school bus loaded with white Christian Republican donors on their way to an NRA convention plunges into a frozen river when the bridge collapses.
5
Private run roads would run amok with regulation hating GOPers. The people would need to own these roads and hold the governments accountable.
1
This accomplished con man is laying the groundwork for the real prize pig - the privatization of Social Security.
6
Who would profit in the public/private partnerships? Why the next Steve Mnuchin's and Gary Cohn's of the world.
4
"The answer is, basically, that it doesn’t. Private investors won’t spend on public infrastructure unless guaranteed a return. This only works if they’re given ownership, and the ability to collect future revenue from the public."
In short, the covfefe GOP's plan would work exactly as they intended.
The pirate[sic] equity system allows people to get a little bit of money by selling a lotta bit of their control and soul, i.e. "here's some cash but remember...I own you". When pirate equity gets a large share of public projects, "you" is the public that ostensibly owns the project, and "I" is the pirates that will actually own the project, its users, and the law.
That's the vile goal of the covfefe GOP's "small (enough to fit in a uterus) government": since they'd own the government, they'd decide whether they're even accountable to the law or not, and since Homeless Muslim Mexican Black Women don't have GOP-level money, they won't get the fruits of the alleged infrastructure rebuild—but will sure get the invoice.
For the covfefe GOP, it's the best outcome money can buy.
2
I thought the infrastructure was already rebuilt with all of Obama's shovel ready jobs.
Nope, GOP congress blocked it all.
But this clueless and corrupt GOP congress at some point have to drive over crumbling bridges and pot holed roads themselves. I mean they can't use their private jets to get to their kid's schools or to go to their country clubs.
2
Trump and puppies McConnell and Ryan will find their infrastructure money once they've taken it from Medicare, Medicaid and Social Security. The butchering of America is underway and the outcomes, though unknown for now, will bring a lot of suffering along the highways, over the bridges and down the sewers.
5
The Ed Koch Bridge (Queensboro) will be renamed the Koch Bros Bridge. The Lincoln Tunnel will be the Putin Tunnel, the Geo Washington bridge will be Clean Coal Bridge.
4
I'm sorry, but the name "Putin tunnel" is already taken by Mr. Trump's mouth.
1
Remember this is the guy who said, “What I’ve done is I’ve used, brilliantly, the laws of the country.” And he intends to use those laws, once enacted, to reward his cronies and himself. If you doubt that, I have a great, tremendous bridge to sell you... and you can collect tolls to your heart's desire.
2
If you want the road in front of your house to be a toll road, then support Trump/cronies.
2
Publicly owned rail systems in Europe, Japan and now China are fast, efficient and clean. Our public/private partnership (AMTRAK) is ... uh ... suffice to say that Trump would still be in transit if he relied on it to shuttle between golf outings.
3
Scam: Trump’s calling card
What a waste this BADministration is turning out to be.
But what else did we expect?
1
Love the photo: see no evil, hear no evil, speak no evil. Enjoy yourselves, Boys. November IS Coming. Bigly.
Trump's infrastructure plan is fake news
2
If nothing else, Trump can lay claim to being among the world's greatest liars, or as he would put it, "the greatest".
P.S. I believe it is time all New York Times staff who have to listen to Trump speak so the rest of us don't have to should receive "combat pay". To have to listen through an hour of Trump reading from a teleprompter surely puts ones sanity at risk.
4
i would like to hear itrump say I AM NOT A CROOK. it would put him in good company.
2
What a shame. The one thing Trump touts that I actually wish would come to pass, but too many devils in the dead-end details.
1
I think the first toll roads should be all the county roads that lead into small towns. Let the “base” be the first to enjoy Trump’s new America. And why is the NYTimes hiding the names of the columnists in the op-ed section? An experiment? And why do some articles, ops have comment sections and not others? But thanks for even having a comment section- we non Facebookers and Twitterers applaud the guts to break free from their stranglehold on speech.
1
yup whio is going to pay this and how, without raising the deficit even more?
Hmm , did't Rick Perry do that with some of the highways in Texas?? Brought in a Spanish company to build them (cost less) and turned them into toll roads to pay for them soaking the commuter who needs to get to work , ahhh greed is stll good!
1
Yes, once agsin it's the kleptocracy, stupid! We'll sell off public assets to our oligarch cronies to privatize our infrastructure. It's plain Putinism. And, of course, there was no mention of good ole Vlad the Stealer. If there's ever going to be any new infrastructure, it will have to be at tbe state level. Trump has already gave the $1,5 trillion needed away in his tax cuts to the wealthy--both corporations and individuals. States will thus have to tax those same entities as well as increase other fees and tolls to repair and modernize their infrastructures. Even then, it will be a slow and very long process without real financial help from the federal government.
Another scam to enrich billionaires. What a surprise!
1
He's a fraud but the media stops short of details. Trump is such a fraud. Meh.
What he intends to do is turn our roads into privately owned
toll roads.
Public investment is mandatory. see the Interstate HIghway
system created by that well known commie pinko Dwight
Eisenhower
3
You should talk to my little village. they have figured out a way to monetize sewer systems. I get a bill, part for the water coming in and part for it going out through the sewers. And I'll tell you, the cost of the going out part far exceeds the coming in.
1
Paul, how do U get work, automobile or the T?
Trumpfrastructure sounds familiarly like Putinfrastructure.
Give the oligarchs access to the public till and they will come!
Now it's up to Congress to rubber stamp the fire sale.
1
Yup. It's another lie.
Gee, if only Congress and Trump had only decided not to create $1.5 trillion in debt for his tax "reform," we might be able to publicly fund very necessary infrastructure improvements. These ideological idiots are just watching this country swirl down the drain. That's the real state of the union.
1
Scam in chief is right.
Isn't it amazing that our fathers and mothers could build and pay for an interstate highway system and build Hoover dam?
And fight the cold war?
How did they do that? The rich paid their fair share of taxes and there was a growing middle class that wasn't being strangled by rising inequality.
Our fathers and mothers built roads, dams, bridges, power grids without yipping about the crumbling state of infrastructure that they built.
And The Trumpster gives trillions to the 1 percent that should be going to pay for the infrastructure that the 1 percent uses by their corporations.
Where is the public welfare?
Vietnam Vet
186
"Back the day" when our real challenges were greater and our dreams bigger, enough politicians were less greedy, and enough politicians were less influenced by the greedy. Today, we are subjected to smaller minds, greater selfishness. Most of the GOP today is in government to disable it, and make more money for themselves. And most believe that adverse consequences won't catch up to them in their lifetimes. Certainly Trump believes that he'll be dead before all his sins catch up with him.
1
Perhaps, but we also didnt have any environmental regulations, and entire neighborhoods were often bulldozed over the objections of the residents, particularly for highways.
1
My dear Vietnam Vet, The public's welfare, also known as the Common Good, is so pre 1980, also known as before St. Ronny. We had a great country with problems we were working on and starting to fix. But, starting with the so-called "great communicator," we decided unicorns and moonbeams were what made the USA exceptional. Last night we got to listen to the latest unicorn. Sad—no, pathetic and spiraling down.
3
https://fred.stlouisfed.org/graph/?g=hLv4
January 15, 2018
(Net federal government nondefense investment & Net state and local
government investment) as a share of Gross Domestic Product, 2000-2016
(Indexed to 2000)
Already, two of Trump's New York developer cronies have been shown to be potential private participants in the infrastructure plan. As Dr. Krugman pointed out, the 1.5 trillion dollar infrastructure plan would depend on only $200 billion in federal money. The rest, if not from private investors, would have to come from the states or localities. The "great" federal tax reduction for the middle class is just a thinly veiled plan for tax or cost shifting -- tax shifting if the states would have to pony up, or eventual cost shifting if private interests get involved. Overall, the "tax reduction" is a scam: tax payers will pay for it in higher state and local taxes, loss of services (which have a value), and in more interest on the incurred debt from federal tax reductions. All around, it is a great way to fleece the middle class and put more than 80% of the benefits into the hands of the very wealthy. Welcome to Trumponomics.
1
There is no free lunch, Congressional tax cuts reduce revenue and there is less money due to reduced Tax dollar receipts = massively growing the federal deficit.
The money of course would come from entitlement programs and returned in kind to wealthy investors who are already capitalizing on the recently passed wealth care tax program. Lets call it extreme cronyism. Such a great deal for those who are in need of nothing. They will be able to hire those who were just robbed by paying them minimum wage for slave labor at their expense by way of cuts to benefits. What a scam! But then Trump has made a lifestyle of scamming anyone and anything he can.
5
isn't this the same idea/concept as privatizing the air traffic control announcement made about this time last year? What is the status of this tremendous, very tremendous project...thought so
2
If the private venture builds the project rather than government, it's quite possible that they won't have to utilize union labor and follow absurd union requirements ($100 hammer anyone?). That in itself is a huge positive.
1
I won't stick my neck out even a millimeter when I predict that the only infrastructure projects a republican congress will approve are those that will enrich the Koch brothers and other donors. As for the money to fund it...they will take it out of Medicaid, Medicare, Social Security...any programs that benefit the middle class.
Why not? All the republicans running for congress need to do is scare the sheeple with the threat of immigrants and people of color...and they can get elected. Once elected, republicans represent for the right wing billionaires who actually run the country. Oligarchy, anyone?
5
In the UK, they've done Private Finance Initiatives (PFI) for over 30 years.
The UK Treasury advances three arguments for PFI contracts. First, given the binding contract, the private sector has a stronger incentive to build assets to budget than government departments. Second, the private owner of the assets has an incentive to curb running costs. Finally, the assets should be better maintained in the private sector.
But the National Audit Office (NAO) finds (1) even the private owner has an incentive build to budget, this does not mean that the cost will be as low as possible; (2) "no evidence" that assets are operated more efficiently; and (3) that standards of maintenance are higher in PFI project. (NY SUBWAY RIDERS: government must be deprived of the ability to let essential maintenance be deferred.)
Where does this leave PFI? If the government can specify and monitor the contract, can be confident that the private sector will deliver, cannot find a superior organisational form and wants to bind itself to delivering the service over the term of the contract, then it can make good sense. The argument that the government should finance itself through direct borrowing, because it can borrow more cheaply, is flawed: the government’s discount rate needs to include the implicit call on the taxpayer. This leaves a restricted case for PFI, but a far from worthless one. However, PFI must not be used simply to shift a liability off the balance sheet.
2
The UK-based Financial Times has run a series on PFI, including rail.
It turns out that in Britains' rail service, which is run partly nationalized and partly as a PFI, unit costs are 40% more expensive than comparable rail systems on the Continent. It was supposed to deliver innovation, competition, and improved service. Has it delivered?
The answer, not surprisingly, depends on who you speak with, and how you conduct the inquiry.
Some complain that all the changes are cosmetic; service, not at all.
Others put the blame on fragmentation: tracks and other infrastructure remained separate from rolling stock and service providers, which only fosters shifting the blame.
But is that really any different from building public roads and interstates and taxing vehicles that use them?
There is a growing consensus among both executives and industry experts as well as the public that Britain’s unique attempt to create competition on Britain’s rail network has not delivered.
While it has led to more services, and encouraged more users to pay higher prices, it has not unleashed the productivity improvement necessary both to upgrade the network and stabilise the network’s finances.
Over the same period, for instance, London’s state-owned metro network, Transport for London, has grown just as quickly and delivered much more state-of-the-art investment.
All in all, I think it's fair to say that, though many are dissatisfied, the jury's still out.
1
You nailed it Krugman. When you get the government out of the infrastructure business, you just increase fees on citizens and profits for private middlemen. Nobody needs to be making a profit off of bridges and sewer systems, ever. I suspect what Trump was really trying to say, when he compalined about it taking years to approve building a road, was that he wants to get rid of meddlesome environmental regulations and go back to the bad old days of rapid, thoughtless, destructive building, with no consideration of the natural ecosystems or human communities being destroyed.
4
You can't give away $1.5 trillion away in tax cuts via deficit spending, then suddenly find it again for infrastructure...without double deficit spending anyway.
92
Tom and others assume:
"Debt and the deficit are bad. Reducing them is good."
These are historically wrong..
Every time we had a balanced budget for more than 3 years, that period was immediately followed by a depression. This has happened 6 times. Deficits are necessary for prosperity.
Government deficits decrease private sector debt. All of the 11 recessions we had since 1952 have been preceded by an increase in private sector debt. See 3rd graph at http://www.slideshare.net/MitchGreen/mmt-basics-you-cannot-consider-the-...
In 1946 the public debt was 109% of GDP--47% higher than we have today. We had deficits for 21 of the next 27 years; debt increased 75%. And we had prosperity. The GDP grew at an average of 3.8%; real household income surged 74%.
On the other hand look at what happened after WWI. We had balanced budget (surpluses) from 1920 - 1930. We reduced the debt by 38%, On October 25, 1929 the debt was only 16% of GDP. AND THEN WHAT HAPPENED?
As another commenter put it, "A growing economy needs a growing money supply or there will be deflation as X amount of dollars chases greater amounts of goods and services. A fiscal surplus destroys money, exacerbating the problem. Accordingly, regularly running surpluses is like bleeding a patient..."
"The definition of insanity is doing the same thing over and over and expecting different results" - source unknown
"Those who don't know history are destined to repeat it." - Edmund Burke or George Santayana
Whenever the government privatizes anything it costs more. That applies to toll roads, military contractors, health insurance, postal services, you name it. Government is supposed to work for the people, not gouge them. Private industry works for profit. And when a serial liar and proven grifter promises $1.5 trillion in infrastructure spending without really knowing where the money is coming from, take it for what it is: another con.
4
Trump's infrastructure plan: Selling a lot of bridges to the American tax payers;
Trump's tax plan: Presenting Americans a cigar from the box (SS, Medicaid & Madicare) he stole from them and giving the rest of the cigars to the rich so they can maybe give one more to you if you behave - that's what they mean with "trickle-down";
Trump's jobs plan: A coal in every stocking for Christmas, and freeing up a lot of agricultural work in California for "legal Americans".
Trump's health plan: Jesus will take care of the poor, old and sick, and the rich can afford to pay for health insurance.
2
Trump can't even rebuild a small country's grid and power right like Puerto Rico's so I don't think he'll come close to getting the US's infrastructure repaired.
But paying more to get to work or sell your goods? That's guaranteed.
5
Paul just described Obama's "shovel-ready" projects. The infrastructure was already rebuilt under Obama. Nothing to see here.
And the idea that states have money to leverage for Trumpfrastructrure is ludicrous. Here in Oklahoma after years of Republican rule we don't even have enough revenue to run our own state let alone kick-in on Federal schemes.
3
The political debate may now shift from how many middle-class taxpayers actually will pay more or less under the Republican tax bill to the undeniable fact that there will be a massive shift in the tax burden from the rich and onto the middle class. The majority of middle-class taxpayers will see some benefit from the tax bill. However, even they might ponder the question of how much more they would have gotten from a tax bill that provided that 39% of the benefits went to the top 1%, and thus 61% of the benefits went to the other 99% as opposed to the 83% going to the top 1%, rather than the 83% - 17% split favoring the top 1% in the bill.
The Obama stimulus program lowered taxes on everyone who paid social security taxes and gave some to those on social security. With the new tax bill, there will be many middle class losers, which was not the case in earlier tax cuts.
In every single state, a couple who had previously filed with itemized deductions in the $18,000-29,000 range will definitely pay higher taxes in 2018 and beyond on the same income as they had in 2017. This is because the loss of their personal exemptions far outweighs the reduction in rates in every bracket. The same is true for any single filer with itemized deductions in the $10,000-$22,000 range. That is in addition to the many filers in high tax states who will pay higher federal taxes because of the limitation on state and local deductions to only $10,000..."
https://seekingalpha.com/article/4139026
1
Dr. Krugman, maybe trump is planning a wave of new golf courses. One can be certain that whatever the plan if one even exists that it will change with every new tweet.
So what is Paul recommending? Usually he loves spending taxpayer dollars.
You are reasoning from incorrect assumptions. The purpose of the infrastructure plan is to enrich his friends. Notice that Steve Schwarzman was named as the prime recipient of the Saudi "contribution" to the plan. It is, therefore, a major success.
France has very good privatized expressways where the tolls are about 17¢ a mile. Tell that to the rugged individualists in Montana and Arizona.
2
Let's sit back and see what actually develops with the infrastructure repair. We have already had a year of nothing and while we are at it, we need to keep our eyes open for other Carrier type "successes."
3
Just last week Britain's National Audit Offiice reported that the Private Finance Initiative (i.e privatised infrastructure) was costing taxpayers billions of pounds. See:
http://www.bbc.com/news/business-42724939
In Australia the privatisation of strategic monopolies, essential services and critical databases - and the creation of tax farms in the form of private road tolling monopolies - has been a disaster as acknowledged by the head of the Competition Commission. See:
http://www.smh.com.au/business/privatisation-has-damaged-the-economy-say...
Privatisation offers politicians the possibility of quick cash without appearing to raise taxes. Government Ministers and senior public servants also get the added incentive of lucrative directorships and other informal kickbacks when they retire from public office.
All of this has a long run cost for consumers and for other parts of the economy.
Unregulated or lightly regulated private monopolies under-invest (or don't invest at all) and over-price their services.
In the field of road finance, efficient road and transport planning has been subverted by the contractual constraints imposed by incumbent private road tolling monopolies seeking to maximise their profits.
This is not modern This is not innovative. It is a throwback to the pre-modern era of government finance through sale of monopolies and tax farming.
The 20th Century was an anomaly. The Future is the Past. We are being refeudalised.
4
The privatization of America has stealthily been occurring for at least two decades, thanks to the machinations of the Kochs, Mercers and others in the GOP donor base.
They wish to return us to those glorious days of yesteryear when colonial New England roads were a maze of toll roads and turnpikes, exacting a price from each traveller. For a 21st century preview, look at the toll roads enacted or contemplated by Republicans in Florida as a template for America.
Their aversion to the social compact has resulted in a conservative "free lunch" for corporations and the wealthy in the guise of "fairness". Otherwise they would have enthusiastically approved a rise in the federal gas tax when oil prices were at historic lows, as well as interest rates for public financing of infrastructure improvement and rebuilding.
Privatizing public services and infrastructure will put the final nail in the coffin of the American Dream as we knew it in the twentieth century. While the European nations are united in providing the best quality of life possible for all of their citizens,
"Conservative" Republican ideas and practices benefit only a select few Americans, while the rest of us, especially the Middle Class, foot the bill and pay the price for endless tax abatements for real estate developers and Amazon terminals, as well as the unnecessary stimulus of a permanent tax cut
for Big Business despite 2% annual growth in GDP.
Fasten your seatbelt; economic road will get even worse.
Instead of touting a $1.5 trillion tax cut, POTUS should have tried to sell a $1.5 trillion tax increase. His SOTU speech asked for increased funds for infrastructure; but, also included demand for funds to increase military and other items for national security, and for increased security on our southern border. These are federal functions which cannot be leveraged with private sector or state/local government funds. If the demands for funds for these purposes along withe the tax cuts result in increased borrowing costs for all sectors, these plans may come to naught. Who knows how the FED will react (White Swan)? Then there are the Black Swans.
Trump talks the talk, but have we ever seen him to present a cogent and detailed plan of action for any project? Rhetoric is cheap; after one year we have yet to see any action initiated by this lazy but dangerous would be autocrat.
Lets face it, he's about: "How much is my share, now let me play golf".
2
Paul's hero said nine years ago that he'd fix the infrastructure. I won't wait to hear Paul laugh at that failed attempt.
Oh yeah-PAUL! The guy who told us after President Trump won that the markets woulds all collapse. I believe that on that day The Dow Jones Industrial Average DJIA, -1.37% added 72.83 points, or 0.4%, to end at 18,332.43.
Currently the DJIA is over 26,000. What happened, Paul?
Great call, Paul! You ought to be helping Las Vegas bookmakers!
They'd all get just what they deserve!
You're a better man than I. I watched an old horror movie. First SOTU address I failed to watch in many years. Perhaps that's a real reflection of the state of America right now. Any chance Trump had of winning over voters like me was forfeit through a year of lies, attacks on our democratic institutions, race baiting, self dealing, and policies aimed to help only those at the top. My only goal now is to help candidates who oppose Trump and his enablers.
The sale's the thing. Like P.T. (a sucker's born every minute) Barnum, Trump is a salesman. Doesn't matter if it's real estate, casinos, misogyny or racist hate, or Trumpfrastructure or tax cuts for the rich, Trump is a salesman.
He doesn't know politics or care. He knows nothing about the law, ethics, history, or the Constitution he's sworn to uphold. What he knows is selling, cajoling, horse-trading, going for the kill and closing a deal. To his advantage, of course. What he sells is totally irrelevant to him.
To be a great salesman you have to be ruthless and blind if not antagonistic to anything that may thwart a deal, such as facts or reality. There can be no distractions that take the spotlight off the salesman. Everything is a transaction, a deal. Every sale is validation or a win. And winning is the measure of everything.
Selling is a mentality, almost an alternative reality built on lies, denial, even self-deception. Salesmen are essential when what's being sold is either unneeded, a lousy deal or detrimental to the buyer. A salesman is a master of tricking buyers to act against their own self interest, and persuading people they need something they don't.
Trump's State of the Union was an elaborate sales pitch for himself, which is ultimately what every salesman sells. When you're a hammer, everything looks like a nail.
It's not Trump who's President. It's Willy Loman.
But it's not Death of a Salesman. It's the Death of a Democracy.
2
Republicans hate government and, most of all, they hate socialist government and socialist "projects". However, let me point out one particular socialist project of historical note: The Panama Canal. Yes, the Panama Canal was a socialist project that was funded by American tax dollars, mostly under Theodore Roosevelt's administration. The previous attempt at building the canal was a privately funded affair supported by LeLesseps, who built the Suez canal. It was a complete failure. Instead, the socialist Panama Canal was a resounding success and a major accomplishment that impacted world trade and was an engineering marvel. So, give me socialist infrastructure any time and keep your tolls to yourself.
1
In the meantime we are having a party, actually more like a Bachanallia with borrowed money to the tune of 1 Trillion a year, minimum. Just yesterday the Government was borrowing in excess of 440 billion to keep the music playing and the 1 % happy not paying their taxes, polluting and charging new fees and really doing whatever they like to the rest of us now that they are not regulated..
The US of the Republicans and Trump is like a family of drug addicts that keeps spending over their means charging it all to a Credit Card that will be paid by their children and grandchildren.
But the worst part is just to come because like the family of drug addicts that is controlled by their drugs supplier the Government will then proceed to give ayay the national assetts under the Trump Infrastructure Scam. Give away roads, buildings, bridges, ports, airports, dams, national lands, water and mineral resources in exchange for a tiny fraction of their value and a few million to the campaign funds to the Ryans of the Party..
Oh if only it were true. Civilized societies began public infrastructure projects over 200 years ago because private ownership didn't serve the long term interests. California expands many freeways with toll lanes that are used by relatively few people and crowds the rest of us in the remaining lanes. Orange County, the bastion of conservatism until recently, built toll freeways that promptly went broke. They want California to bail them out of their stupidity. Trump's plan to open public infrastructure is simply another way to let the wealthy get rich off public infrastructure while the rest of us pay tolls on every little bridge and road across America. We've been there and done that before and there should be no looking back.
Where indeed does even $200B come from? Republicans already maxed out the debt that they can run up. So unless they gut Medicare or Social Security to pay for this, they don't have the cash.
Second, yes indeed private industry will only get involved in projects that are profitable. So roads and bridges on heavily used roads near metropolitan areas will be turned into expensive toll roads. Roads in only modestly less traveled areas won't get any improvements. Even in congested So. Calif. there are fairly new very expensive toll roads that are virtually vacant because they are much, much too expensive to use. The non-toll alternate routes are gridlocked during rush hour.
We'll find that much of the interstate highway system simply won't get repaired, because projected private profits just aren't there.
The conservative Republicans don't care. The ultra Right wing libertarians (Freedom Caucus) simply believe that financial return determines the value of every aspect of life. So if rural interstate highways shouldn't exist if they can't pay for themselves with a hefty rate of return for investors.
That is the bottom line for Trump's beloved infrastructure plan.
1
Trump paints a stunningly clear picture.
We can see the absolute financial and corporate takeover of the common good by America's increasingly militarized and brutal capitalism.
We can see the rising number of people in the United States, and of small countries around the world getting squeezed into excruciating debt peonage.
In this financialized global system of rentier parasitism, individuals and whole countries never can get out of debt. Payments forever pay only for debt service -- interest -- never making a dent on principal debt.
This is the parasitical capitalism informing Trump and Congress.
But Trump and Congress are only place holders in the system that has taken root over the last forty years.
Trump will pass, and our present Congress will pass. What will not pass is the rot of the system that has produced Trump and Congress.
That non-productive rot is what we need to focus on. That rot is bipartisan. Politics as usual won't change it.
Only we the people can change it. Change will come from us, if it ever will. Hoping for the better angels in the political class is like trying to drink the water of a mirage. We will die of thirst before we get there.
oz.
Weren't lots of Russian oligarchs created by privatizing federal lands? Trump can just sell National Parks for strip mining to raise money.
2
The "snake oil salesman" of the "privatization miracle strikes again... only to be disrobed in the public square by a brilliant economist.
Thank you, Dr. Krugman. It is good that you clarify this -another- Trump murky sham.
1
How is the plan going in Chicago where they turned over street parking concession to private industry (crooks and cronies of politicians)?
1
Trump can't even come up with an original idea -- not even a bad one!
"Are private toll roads a losing idea?
By Cate Long
January 19, 2013
President Obama and others have called to create a “national infrastructure bank” that would leverage the credit backing of the U.S. to fund more privatization of public assets – also known as public-private partnerships."
Rest of the article here:
http://blogs.reuters.com/muniland/2013/01/19/are-private-toll-roads-a-lo...
The Indiana Toll Road is an interesting debacle.
https://www.wsj.com/articles/indiana-toll-road-exits-bankruptcy-protecti...
Reminds me a little bit of the Chicago parking meter fiasco.
Remember that bridge in St. Paul that collapsed, killing our fellow Americans? I do, and am still waiting for the rush to fix our failing infrastructure. Remember Obama's infrastructure bill that Senate republicans, as they said they would...(we will vote "No" no matter what this president suggests)....shot down with Mitch McConnell glee? Vote against republicans. Safe driving today folks.
What Dr. Krugman is saying is there is no free lunch.
We will pay for any infrastructure projects one way or another.
And if we pay to private corporations, we will pay more.
128
Not always true. There are plenty of examples globally of successful lease-and-concession arrangements where the private sector has delivered infrastructure at a lower whole-life cost than the public sector, with higher reliability of service. These arrangements are not appropriate for all projects, true enough, but to reject them categorically as Krugman and you suggest is to miss important opportunities to serve public needs better. Traditional government procurement is NOT always the best answer. Work needs to be done in each case to determine how best to proceed to achieve optimal outcomes. Sadly, state and local governments rarely do that work today, preferring instead simply to incur more debt and defer life-cycle maintenance, which is in part how we've found ourselves in the mess we're in now.
1
You can’t tout beautiful clean coal and boost the oil industry then talk about infrastructure investment. The country doesn’t need to just fix pot holes. It needs to bring new tech into play. Sustainable energy, a transportation system that includes efficient trains, and a clean environment have to be goals for infrastructure building. Otherwise we are wasting the tax payers money. Trump and his Republican golf buddies are incapable of pulling that off.
80
Paul, I think you have a problem with criticism. Both as a presidential award recipient and when non-objectively flinging it out. "I don't, I found, I don't, I've never...
continued
President Trump has completed building projects all over the world and unlike you he knows that Capitalism works, not as some abstract concept devoid of flesh and blood to be talked to death, but as a dynamic reality of concrete accomplishments that all the decadent bloviating in the world cannot erase.
So...having a good time at the International Minitrue Convention?
In real life, he only built things himself at the beginning of his career, and after major problems turned to merely selling his name as a brand, and becoming a reality tv actor. Look it up, and you'll see.
As to "Capitalism": Trump's entire career indicates that he tried out the crony version of it, and won bigly. So that clearly worked out fine for him. As to the people who worked for him ... that's a totally different story, unfortunately.
Compare that to Obama's version of capitalism, where higher taxes on the wealthiest Americans combined with well-designed regulations protecting ordinary citizens against the excesses of crony capitalists like Trump, created, as Trump himself just remembered during his SOTU, a 45-year record low unemployment rate among African-Americans and a record number of years of continued economic growth and job creation ...
The question then becomes: why would ordinary citizens support crony capitalists rather than a capitalism that has been proven to work for ALL citizens ... ?
Privatization or P3 isn’t a universal solution. And, I sense a good deal of hubris surrounding these projects. But conventional delivery run by local governments frequently result in flawed assets. Low bid, slow, value engineering that simply is cheaper first cost rather than least life-cycle cost comes across like a Potemkin village. We tend to look at construction programs as an aggregate of separate projects rather than an integrated plan. Having spent most of my career working for governments, my experience tells me that the system which has evolved in procurement and low-bid has not served the public well. So, I drive my cars to around 200,000 miles. I can do that by paying up for the car, at the time it is bought, the technology costs more because it is newer and I don’t defer maintenance. Public school construction doesn’t put enough money up front and school districts are subject to fail on maintenance. The P3 version can provide far less total cost and far better utility. But...it is novel.
2
Mr. Trump finds it very easy to talk about money. Because, he is a businessman. However, he fails in good financial management. Mr. Trump is presenting a figure of $1.5 trillion for infrastructure improvements. Where would this money come from? Even with a suggestion to have both government - private investor participation to fund this massive project, it sounds ambiguous.
The recent tax reforms legislation at the expense of a loss in tax revenue would result in debt and deficit.
Mr. Trump is also hoping for funds amounting to approx. $25 billion for the border security project.
In addition, more funds are requested on military projects.
The question is, where does Mr. Trump expect the monies to come from? The priorities are being mixed. The only basis for any kind of financial planning we see here is to resort to "borrowing" and "hoping for future tax revenues".
Is this a sound approach to solving problems?
2
The Trump plan does remind me of a lot of talk that was happening among development economists in the 1980's. I seem to recall that it was called "the Washington consensus". Now Trump is just bringing it home.
Letting private business take over our public investments and charge us for their use seems like good American tradition. Think how much of the basic research that led to most of today's technology began with government funded university based research? We turned all that over to private enterprise to exploit for profit and did not demand a dime back for our investment. Of course, all this is too complicated for American voters to grasp.
6
I suppose that it is too complicated as your note shows.
University research is typically funded by government grants as well as university funds. Projects with practical application may sometimes be funded by private interests for investment or potentially nonprofits.
Infrastructure is not research. It is necessary for society to function safely and efficiently, which includes individuals and corporations. As Mr Krugman indicates, the government funding is from taxpayers and the return on investment for private partners would also come from taxpayers (in a more regressive taxation).
I have to disagree. There is a case to be made that people and businesses protected by a river levee should pay for that protection. That could be done by allowing a private entity to charge people in the floodplain for the cost of maintaining it. The municipality needing bridges repaired can do the same thing - charge a "bridge tax" if usage fees are impractical. In an age when I can pay for my groceries with my smart phone it seems pretty clear the tolls on cars using a bridge are more practical than they were when I was a boy. So, this is a workable plan but whether it's the best approach or not is open to debate. On the one hand, private companies are inherently more efficient due to the working of Adam Smith's invisible hand. On the other hand they expect a return on investment that's much larger than what it would cost the federal government to issue bonds to cover the costs involved.
"private companies are inherently more efficient due to the working of Adam Smith's invisible hand." That's a standard line of belief. I prefer evidence. Here is some evidence: Carillion. I hope you know what that means, but just in case, it means the incompetence of private companies and the danger of letting them provide basic services, including construction services.
3
Mr. Smith's invisible hand is not based on evidence or alternatively it has seldom been practiced, witness "Reaganomics" or the outcomes from Milton Friedman's teachings in the late 70's and 80's which gave us individual incentive without moral boundaries, witness the fall of Drexel, Burnham & Lambert and the 2008 mortgage debacle.
1
It sounds like you actually agree.
In theory, a model where the government only provides a small amount of capital can be viable, as long as it is also willing to bear most of the risk. Such structures are being rolled out by major international institutions (such as the World Bank and its financing arm the Internancial Financial Corporation).
If the goal is to attract investors looking for a safe investment, then if the government puts up equity capital, and actually risks making a loss if the projects underperforms, it might be possible to attract debt investors (lenders) in significant size. Note than in such situations returns to the government on its investment are often low, as the point is to provide a needed public good at a subsidized cost.
Of course, this would require the GOP facing reality when it comes to understanding how government functions, the purpose of public infrastructure (emphasis on public), and the value of government spending.
Somehow I doubt this is what Trump has in mind.
4
That Krugman so flippantly equates toll or other use fees to "just taxation in another form" is very revealing. Does he truly believe that charging a buyer for the use or consumption of goods or services is the equivalent of a tax? What about postage stamps? A tax? Don't think so. And even those charges that are called a tax when collected only from the user are more appropriate than general taxation of the entire citizenry. E.g. I am glad I am not having to provide my share of for whatever the cigarette taxes are used for. Really not sure why Krugman is so opposed to things being done on a state of regional level or by private enterprise other than perhaps a desire to havel enterprise completely nationalized. Do however know we have all witnessed has demonstrated skill in economic prognostication with his bold forecast of economic doom and gloom as the current administration and Congress were taking office one year ago.
1
Oh good grief. Would you really like to have to stop every time you turned onto a new street in order to pay a new toll, just because a new private contractor owned that street and they all charged individually for the right to travel their roads? Is that a better model for you than we all as citizen taxpayers own all the roads and we can just drive on the flipping things and let gas taxes pay the way? Sheesh.
"Really not sure why Krugman is so opposed to things being done on a state of regional level or by private enterprise other than perhaps a desire to havel enterprise completely nationalized." yes, that must be it. Or, you know, the fact that it has never worked, anywhere,
There are some inaccuracies in Mr Krugman’s comments about the planned recourse to Public private partnerships.
First, the P3 transportation scheme does NOT transfer ownership of public assets, the private sector only receives the right to usepublic land to build and operate/maintain the assets for until the contract expires.
Usually the public owner continues to operate the facility to provide whatever public interest activity to the public, for instance a public hospital, the private sector only operates the building, so the public interest activity is not privatized either.
Then, Mr Krugman addresses two disctinct schemes:
- P3 with revenues based on deferred payments by the owner to the private sector, and
- toll based P3 or « concessions ».
The deferred payment P3 scheme does require a commitment by the public owner to pay for the cost of completion of the assets through installments. The price for the construction can be however substantially reduced when the maintenance does not fulfill the stringently standards.
The toll scheme does not contain any guarantee on revenues. The concessionaire takes on the revenue risk. If the company goes bankrupt due to the lack of revenues, then it is usually a windfall for the public owner. The contract may provide remedies for lost revenues when the owner makes a decision affecting the use of the toll facility.
I agree with Mr Krugman about the lack of clarity of the plan. Hopefully we will know more about it soon.
It's actually quite simple. The private investors are looking to make money. Where is that money going to come from? Charging tolls higher than needed. Cutting corners on construction & preventative maintenance.
In other words from us, sooner or later.
7
Don't know about your p3 but Trump has talked about privatizing, just like he is going to sell off government lands very cheaply.
There is nothing inherently wrong in private firms investing in public infrastructure and earning profits doing so. However, there must be public oversight of these firms which is usually lacking. In addition, private firms frequently abandon projects if/when they become unprofitable. Public sector is usually left to clean up.
1
Trump campaigned as a businessman, and it should be no surprise that his natural tendency is to make others pay for his big ideas, which goes over well with naïve voters (some still believe that Mexico will pay for the wall). Money is all that matters to the current administration--never mind the climate, the healthcare system, education, environment, whatever. It's all in the profit (big!) and loss (not an acknowledged term).
12
I would add that Trump as a corrupt businessman. So it is no surprise that crony capitalism would play a huge role in his administration. It’s almost certain that any private public partnership under Trump would provide personal gain to the Grifter-in-Chief.
Another reality is that some of the most highway and freeway projects (as distinct from repairing them) are bad investments. Spending $2 billion to shave a few minutes off of a 30-minute commute, once a week (rush hour on Friday nights) and to reduce a few minutes off of a ten-hour truck journey does nothing for the economy compared to using that money to provide 50,000 people two years of tuition in a local community college, learning new skills. The way most states and localities make freeway investments uses piles of pointless paperwork that disguises the lack of rigor in their analysis. These studies fail to establish numeric performance goals for the projects. Once built there is no evaluation of whether the project met its goals, assuming any real measurable goals were articulated. The studies fail to consider the full range of costs or the full range of benefits (not just benefits to a subset of drivers). Most importantly, they don’t identify and evaluate real alternatives (not straw man alternatives) that might provide more benefits at lower costs, including taxpayers’ money, but also impacts on job access, health, land value, differential effects on families of modest means and minority groups and environmental quality. Democrats and Republicans should vote against raising taxes to build new and wider freeways unless and until this broken system is fixed.
6
There may be public health benefits from fewer vehicles idling in traffic.
Do some research about the high speed rail initiative in California to prove your point. Billions spent nothing delivered exploding costs.
1
I understand what you're saying, but sometimes, in the public sector, things cannot be optimized perfectly. I accept that. If we make a highway one lane wider than it needs to be, I don't have a cow about it. Maybe the area will be further developed in a few years and that extra lane will be needed, maybe not. In the meantime, the place looks good and puts people to work. Whether you want to believe it or not, a lot of thought goes into public infrastructure projects these days, at least on this side of the country.
1
What a REAL AMERICAN President worthy of the Office does:
Takes a Nation losing hundreds of thousands of jobs every month to a Nation that adds hundreds of thousands of jobs every month
Takes a Nation with seemingly intractable 10% unemployment to one with less than 5%
Takes a Stock Market below 9000 to near 20000
Achieves a very reasonable amount of inflation while stimulating the economy
Takes grave political risk (from opponents and from base!) to help those less fortunate (perhaps >20 million of us) be able to be able to go to the doctor instead of just being sick or going into incredible debt
Takes grave political risk (again from both sides) and shows courage and strength to champion things that cut both ways but in reflection were necessary to get started even if imperfectly
Imperfect like we all are leaves Office after 8 years at the helm with about 60% approval and 40% disapproval in the USA
If you look on the World Stage those ratings are even higher especially among our closest Allies
And importantly .. obviously dignified, thoughtful, respectful, decent as any normally imperfect human can be... a worthy Head of State a worthy role model to our youth
I could go on .. but will not - and I recognize imperfection and things I dislike.
I for one can argue against lots that REAL PRESIDENT did or didn't do in 8 years - I screamed in high annoyance many times at the TV if you get my drift.
But I do long for such a REAL PRESIDENT again.
17
The problem with pushing back against Mr. Trump's infrastructure plan is that his plan won't raise your taxes! And better yet, the projects won't be managed by or regulated by "the government"--- who we all know is corrupt. Instead, they will be undertaken by "business"--- who we all know is efficient. And please don't waste the voters' time trying to explain how "...private investment doesn’t come free; it’s in return for the ability to collect fees from the public, which is just taxation in another form." In the free market we all know that prices will be driven down by competition.
1
What makes you think that "..prices will be driven down by competition..." by this president. Based on everything we already know about him, contracts will be awarded to Trump/GOP political backers, regardless of cost. And there will be nobody in government supervising these projects to assure the public benefit. We already have evidence that private companies do exactly what Krugman describes as described by other readers here.
4
Right, all those private companies clamoring to build parralel sewer systems so that the consumer can choose the cheapest one! Maybe they can build dozens of competing bridges across the Hudson River, and all that competition will keep tolls low for the consumer! Pardon me while I choke on my coffee from laughing so hard.
1
Then we all should know that Trump's tax "reform" will simply reduce prices, to the extent it isn't used to buy back stock from the public.
No vision for building the bridges to living a resilient and sustainable future. More like patching and cobbling the bridges to our most unsustainable yesterdays. So we live in the fantasy world of never negotiating the American Way of living large at the expense of tomorrow. Trump is the perfect symbol of our profligate way.
3
Huh? You realize some of these are local problems, right? Or do you need the Feds to do everything for you?
Infrastructure should have been priority #1 right after he took oath of office.
Then he could have fashion a tax reform package that would work with it.
6
Identity and prioritize infrastructure needs and then raise the taxes to pay for them, making certain projects get done with minimum corruption. Seems simple but we have Republican politicians who continue to convince a naive public you can have everything without paying taxes. See the Chicago parking meter deal as an example of catastrophic private takeover of a public asset.
3
Recently a TV news program showed us what some bridges in need of repair looked like......extremely frightening. Areas of the underneath portions of these bridges look very fragile. How can we in good conscience build/repair parts of third world countries before we take care of our needs. Doesn't really make sense.
1
This isn't an either/or choice. We can help desperate people in other countries, where we get a relatively huge return of influence rather than using military force, and we can also fix our infrastructure.
Republicans wouldn't work with Obama on ANYTHING, it was their literal orders from the leadership. And Trump will push his fantasy outline (it's not a plan) until the Republicans get tired of humoring him, and nothing will be done.
This is not a lack of resources, it's a lack of will.
1
Speaking of privatizing a public, government-run, entity so that the "free-market" can supposedly run it better, our governor here in Ohio had the bright idea of selling off our turnpike, a toll-road, to investors (of course, these investors just happened to be huge money donors to him and his Republican colleagues). But wait, the Turnpike was run efficiently and turned a small profit, a profit that was used to fund other areas of state government which enabled it to keep taxes lower. This is a perfect example of the attack on our government for the benefit of rich, corporate donors. Private prisons are a perfect example of how that corrupt system has worked. People, be very wary when they try to sell off your infrastructure to for-profit groups.
6
We are forgetting Trump's great business acumen, he will just stiff the private partners in infrastructure rebuilding as he has done to his contractors through his life. The USA spends 200 billion (really 20 billion a year to fix our infrastructure? it is like the tax cut for the middle class, a happy meal a week) and stiffs the private contractor's investment of 1.2 trillion dollars
That is the Art of the Deal
2
Paul could back up his skepticism with examples Trump has provided. However, unfortunately, we know how Trump operates. His idea of infrastructure is opportunity to put the government to work helping the 1/4%, or more accurately, the bonkers fraction of the billionaires aiming for government by a few billionaires according to that few.
4
Privatization of public functions on a massive scale occurred during the years following the crumbling of the Roman Empire in the West. In my Western Civ textbook this process is called "feudalism." It starts with the roads and bridges and moves on to the administration of justice and the distribution of formerly public assets to private ownership (as is happening in the American West). We either have public services paid for with tax dollars, or we have private services paid for with fees that go into the pockets of the new feudal lords.
5
Was Krugman similarly critical of Obama’s ‘stimulus’ of which Obama later admitted that there were no ‘shovel ready’ projects?
1
"Was Krugman similarly critical of Obama’s ‘stimulus’..."
Yes he was, on many occasions. He pointed out that the stimulus needed to be twice as large to have the needed impact to restart the economy, but that the Republicans throttled that down to a much less effective program.
1
You make my point.
There were few construction projects ready to start so they gave our money to teacher's unions to buy their votes.
Socialize the risk, privatize the profits. Perfect.
5
That it has take this long for someone to point out the infrastructure lie is amazing. For months, the mainstream press has kept mentioning Trump's infrastructure plan as a potential boon. But even from the first, it was clear that federal money was limited to peanuts - less than 30 billion per year. Yet, Trump TV and Trump's supporters (surely they deserve criticism or pity) continue to press on with the lie that Trump is turning things around. If he is, it is to turn us away from success to something backward.
3
I am in favor of fixing America. I don't believe Trump (the forever liar) will do it. If he does anything at all, it will be to sell our country to rich people so they can "privatize" it. We paid taxes to keep the infrastructure sound and now we will pay again (and again and again....)
6
And where is the infrastructure funding going to come from? Bottle caps? Trump just gave it all away to himself and his rich friends. He's already saying that state and local governments need to do the improvements. That means no federal cost sharing so no projects. Then Trump will blame the locals. He is so predictable.
3
A problem with privatization unmentioned by Krugman is that private firms providing public services can go bust and create an awful mess.
The recent collapse of Carillion in the UK is an object lesson, as reported by the Times: https://www.nytimes.com/reuters/2018/01/20/business/20reuters-britain-ou....
And just this morning The Guardian reports on the troubles of another UK public services firm, Capita, whose shares have been hammered: https://www.theguardian.com/business/2018/jan/31/shares-in-uk-government...
Public infrastructure should be the public's business managed in the public sector where profits don't have to siphoned from public investment and where the public can scrutinize projects and hold their managers accountable.
4
Mr Krugman why the hate on private enterprise? isn't that our economic system. Many say our private enterprise system has made us the global economic leader. Main thing would be government would have the final oversight on the projects with private companies providing their expertise what is the problem Paul?. Maybe Paul doesn't believe in our private enterprise system or just will oppose anything the President says or does.
The two issues here are the scheme to give windfalls to cronies and add new taxes to citizens who pay fees for their use, and that there are some public works that should not be managed like a business for profit, but with motivation to keep the asset as safe and productive as possible.
Understanding these two issues is vital to seeing Trump's plan for what it is.
1
It's everywhere you let greedy people run the show. In Ohio, Ohio State University did the same kind of thing when it privatized parking on campus in a one-time deal with a vendor--which is making money that people who work there pay them, more every year! Who cares if the workers get gouged to park at work?
3
I don't remember Krugman having any problem with Obama's $800 billion stimulus and the promise of millions of "shovel-ready" jobs.
Whenever Republican are in power their number one goal is to transfer public assets into private hands. It just drives them crazy that a public asset is not generating profits for capitalists that fund their elections. It is up to Democrats and the rest of us to point out the con that is in play and resit their plans.
This again is just another way they want to transfer wealth from the many to the few.
3
Prof Krugman would do well to enlighten NYT readers by writing about the public/private partnership scams in the United Kingdom. The UK is well ahead of America in this respect and one of the biggest 'partners' has just gone into liquidation. Today another has announced a profits downgrade, killed the dividend and asked shareholders for new capital. Those companies have exploited the workforce through low wages and by failing to fund pension fund obligations while providing colossal rewards to executives and shareholders. Their reprehensible business model has come home to roost. The UK now has another mess to solve on the top of the Brexit shambles. No, America should reject the false bromides of so called public/private partnerships and concentrate on finding ways to make government sponsored infrastructure renewal more effective.
3
Now that the all-in effective tax rate for many corporations has been lowered to zero, it is time for the GOP to move on to looting the balance sheet of the American people by transferring U.S. government assets to their wealthy supporters. An example of this is what happened recently with the monuments in Utah. Transfer control to "locals". Let them extract resources for a pittance. Leave clean up bill to taxpayers. The next big trick for the Trump and the GOP will be to get the American taxpayer fund these asset transfers up front to pay for the "improvements". Call it what it is... Highway robbery.
2
Since he gave such a tax break to companies, why doesn't he raise the money for infrastructure building form them?
2
The simple truth: "You pay your taxes one way or the other."
Turning the US government into a profit center for the 1% leaves the tax load on our backs in one form or another. The GOP has simply lost its way when it comes to investments in public capital, or human capital. Delaying these necessary investments will degrade our quality of life, and the recovery will take some time.
Trump is a travesty, as is the GOP.
1
He is growing more dangerous every day. the goal is to make America Great Again...like when we were ruled by an English King and the constitution did not exist.
2
EVERY example of privatizing public infrastructure and services has turned into a win-lose scenario where with certainty the clients being served are not and the public ends up with the bill anyway. This is the Trump Tax Cuts on steroids. From education to water to roads and bridges to emergency services: if profit is the motivator the service will be starved to feed the beast.
State and Federal politicians have been starving the infrastructure beast so long that people are truly suffering, not simply being inconvenienced. All for the love of greed.
1
Good observation, Paul, but it's simple. I'm surprised that you didn't see Trump's plan. It's Trumponomics. He's going to pay for infrastructure improvements with the $1.5T deficit that he incurs from his tax bill.
It's Gracie and Lucy economics.
2
This is the conundrum, I am very familiar with the New York-New Jersey Port Authority and the Delaware River Port Authority. The Governors of all these States oversee the Port Authority. Each Governor is allowed to appoint an equal number of cronies to serve on the board. The monies from tolls have been used for many ridiculous petty projects and were no longer available for road, bridge or tunnel maintenance. Past Governor Christie, a true Republican, vetoed approved monies for construction and repair to the commuter tunnel between New York and New Jersey, that money went elsewhere. But that commuter tunnel needs building more critically at a much higher expense. As an aside, New Jersey did a wonderful job on the expansion of the New Jersey Turnpike.
Which then brings the second question, could private companies do this better than the Government? If we look to history private Companies always need to consider their bottom lines, profit. Private Companies also dislike the pesty regulations, cement needs certain rules, if not it crumbles or totally falls. Finally, private Companies do not much care about the public good.
We need to compare with what we know about Healthcare. Healthcare has become cost prohibited with many many hands in the till to earn more profit from the system. It has very little to do with actual healthcare for Americans.
My conclusion, the Government is probably better but we need to stop cronyism.
105
I'm an old coot, but if I remember correctly the Interstates, built in the 50s at government expense were concrete and last just about forever. Today all the roads are made with what we used to call Mcadam and was used for the backroads in farm country. It falls apart quite rapidly.
In the 50s and for quite a while, big rich guys paid much higher percentages in taxes than now. Now all the big percentages are paid by the lower class and the disappearing middle class. What a way to spiral into disaster!!
Public-private partnerships only make sense when building new infrastructure. If you build a new subway line, ridership increases and you can use the additional revenue to pay off investors. We're not talking about building new infrastructure most of the time though. We're talking about repairing trillions of dollars in existing infrastructure that's been woefully neglected. Private investors won't invest in past-due maintenance. There's no upside after the project is finished. We'll likely end up wasting 200 billion on pork projects we don't need while critical infrastructure continues to deteriorate.
2
Trump supporting big contractors and Trump's core support base like the idea of tax cut- irrespective of its consequences on the country and even for them (in the long run). The goal for GOP seems to minimize government to the extent of almost non-existent and proving no basic services- like education, health care, public infrastructure etc. General public have to buy those 'privileges'. That again strengthener the millionaire and billionaire class, ensure the same prosperity and power for their subsequent generations too.
USA is resembling more like feudal kingdoms where Kings and his crones matter more than anything else.
2
“Private investors won’t spend on public infrastructure unless guaranteed a return.”
Exactly, the whole infrastructure effort is based on privatization and profit. Out the window goes “the public good”, the idea that rich and poor need good roads, bridges, sewer systems, etc.
131
No better way to get this done. Charge a toll for 5 years or only until its paid off. America the great. Lets go forward and do this
Usually public infrastructure, roads, bridges,water systems have been in the public sector. This has worked just fine.
Putting them in then private sector is just a scam to hide their real cost.
Corruption will occur independent of sector/ It can be reduced, but never totally eliminated,
1
Countless municipal and state projects are done in Public Private Partnerships. (This is apart from the billions borrowed each month by local and state entities to finance various projects). The upside is investment, expertise and a drive to complete projects much more quickly. Why be so quick to dismiss this?
The Trump/Republican economic policy has been cleverly designed to provide a short-term high postponing the withdrawal stage to later years. Hopefully, Democrats will be in control in those later years so that they can ameliorate the adverse long-term consequences of current policy. However, they should expect to be falsely blamed by Republicans for every one of those adverse consequences.
2
It is always hard to know what is real and what is fantasy in a Trump statement and also what policies merely constitute government as publicity stunt. Obviously tax cuts will make people happy, as will increased infrastructure and military spending, although a more reflective mind might be troubled by the contradiction.
On the issue of privatization of infrastructure, I have some unfortunate experience on what a fiasco this can be. A family member bought a bond on a privately financed bridge in Florida which I inherited and I have followed some of the news on how it is going. It is a toll bridge and the revenue estimates were way off, so a representative of the bondholders has been trying to recoup the money by raising the tolls to levels that, to put it mildly, have not gone over well with the local population and government. A link to the story is here:
http://www.pnj.com/story/news/local/santa-rosa/2015/10/26/garcon-point-b...
It is an important cautionary tale to anyone who thinks that privatizing infrastructure is the way to invest in it. Investors wind up battling users (aka the public) to get their money back and if the project fails, government picks up the pieces. Government also has to take responsibility for insuring the safety of the projects, which also has the potential for putting investors at odds with the public and the public interest.
This type of infrastructure financing can get very messy.
while this seems another example of Trump's "big lie" strategy (promise something big while not doing it) to some extent the difficulty we face is simply people not wanting to pay for what they want to use, most notably roads the gas taxes. The simplest thing is to raise easily collected gas taxes, but the Federal tax has not been raised in 24 years as politicians pander to motorists. Putting it on private builders collecting tolls as Trump seems to want is to add another cost (return on investment) and to further undermine conservation since gas taxes encourage more efficient vehicles, tolls do not. Another anti-conservation element is the undermining of mass transit and rail passenger service which the right wing hates because it is more energy efficient, serves central cities, and the labor force is highly unionized.
2
Even trains are socialist, to George Will. A quote from an old column of his: "...the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism." (This, even though Mr. Will -- that old "socialist," I suppose, has been seen taking a train between Trenton, NJ and DC) So then, are airplanes, buses, and ferries not socialist plots as well? Each of these mass conveyances are often thoe most efficient means of transport. So, Mr. Will, Isn't that what a good conservative would want?
Time to live in the real world Paul. Most transit rail is already financed, built and then run with private money and government oversight. The model is proven and works well.
What kills infrastructure projects is the massive regulatory process to permit the work. 10 year approval processes are the definition of absurdity.
1
I vote for owning what I pay for. That way I have some chance of deciding what is needed, where it's installed and how it's maintained. Not that I have any faith in this government, of course. For now I'd rather have state control for all of this. If it's "privately" owned, let the oligarchs buy the land at a high premium, or lease it for a short period of time, and accept close government oversight, except of course with this government there would be none. This is an issue that in a sane world would show all states supporting state control.
59
And you think Mississippi can oversee roads better than the US government? Haven't ridden on many Mississippi state roads recently, have you?
And, then a GOP governor, like the one in Indiana, sells the road for a song.
Over 60% of our military is now private contractors. It not only costs a lot of money, there is little incentive to end wars or win them.
1
Richard Daley, Jr. sold all of the assets of Chicago he could muster in a failed attempt to make 'the books' look better.
We now pay between two to four dollars to park for an hour on streets that used to charge a quarter or fifty cents. ( If they were metered at all. Now, basically EVERYTHING is metered.)
The City is still flat broke.
1
The Republicans have given away the revenue that could have been invested in infrastructure. They gave it to corporations and the ultra-rich in their landmark "tax reform".
With the Treasury shortfall and the soaring fiscal deficit, we'll see attempts to cut social programs in order to fund extravagant, wastefull military programs and token infrastructure projects like the Trump Wall.
6
"taxation in another form" is a concept sadly lost on most Americans. That specific lack of comprehension has enabled Republicans to denigrate taxes for the common good as evil. At the same time they're made invisible those costs caused by neglecting government functions around infrastructure and education. Also made invisible is the unfathomable bloat of the military which by law ought to be accountable but never had an audit.
7
For comparison take a ride on the Indiana Toll Road (Interstate 90) and compare it to your trip across NY State on the Thruway (also part of I 90). The Indiana road is run by a private concession owned by investors while NY State manages the Thruway. The Indiana Road is a mess. Sad.
169
and true for kleptocracies like this one have one overarching goal: to bankrupt the American government, take the moiney and run.
(enrich themselves...makes sense why spend on repairs when it goes to the investors?)
then rich folks, stupidly blind rich folks, there's no safe place for your money any more...and you wind up living with multiple layers of security in guarded residential enclaves
sounds like a lot of fun.
2
Dear James:
You make an excellent point. Have traveled said road Upstate (I-87 to I-90) and West many times. It was very polite of you not to point out who has been the governor of Indiana. Trump and Pence, what a pair. Trump may well wind up blowing up the world while Pence and his wife pray daily he doesn't.
DD
Manhattan
2
You are spot on! Drive it during the late summer when it hasn't been mowed since the year before and it's like driving on an abandoned highway. And the rest stops? No thanks.
2
In the New York City area, the bridges & tunnels were built many years ago. Tolls collected on these structures have long since paid for the construction costs. The tolls continue, at rates higher than ever. I understand that there are ongoing maintenance costs that are covered by the tolls, but I have to believe that the revenue generated is well in excess of those costs. The surplus goes for other projects, including mass transit. With private ownership, after the initial costs are covered, any future surplus goes to the private owners, not the public good. Forfeiting future earnings by handing over infrastructure to private investment is short sighted.
5
I recently had the pleasure to travel from Florence, Italy, to Naples via train. What a pleasure it was. Clean trains. Smooth ride. The stations clean and well lit. On time to the minute. Beverage and reading material service at our seats. All at upwards of 185 mph (we didn't ride the regional trains but they seem to need a lot of help) compared to Acela's max of 150 mph (but mostly it goes much slower). To illustrate, it takes 1 hour 29 minutes to go 162 miles from Rome to Florence while Acela takes the same time to go 112 miles from NY to Wilmington, DE. And Italy has significant economic difficulties. Meanwhile, Americans sit in a clogged I-95 despite the money thrown at widening the NJ Turnpike. We need to make significant investments in our infrastructure but after giving away $1.5 trillion in tax cuts on top of a $20.5 trillion debt, where is the money coming from? George Washington warned about incurring debt and not retiring it in his Farewell Address - a caution we seem to have forgotten in the name of giving the 1% a tax break.
193
The trains in England are a pleasure to ride--not always shiny clean or super fast, but always on time and going where I want to go, with great scenery to enjoy. How I miss the Amtrak of 50 years ago, when I first moved to New York and there were three trains a day to my hometown; now there's just one, and it arrives there at 3 a.m. (when it's on time).
2
"where is the money coming from?"
From where most money comes from. The government can create as much money as it needs. It will run out of dollars the day after the NFL runs out of points (It was different in Washington's day.)
What about inflation? Well while prices are proportional to the amount of money in the economy they are INVERSELY proportional to the amount of stuff we can produce. Money spent on infrastructure will not only facilitate production, the money paid to construction workers will spur investment to produce yet more stuff.
I recently had the pleasure to travel from Florence, Italy, to Naples via train. What a pleasure it was.
-- Roger
[ What a fine description... ]
China has difficulty building in its more populated areas. It's more expensive. It's more expensive with the metro areas in the Northeast. Texas is building a high speed train between Dallas and Houston with private money. I could imagine it would be built much cheaper a DC to Boston. Just a guess you could probable tie into Oklahoma City, Denver, Pheonix and San Diego cheaper than doing anything in the East. The recent article in the NYC subway system explains a lot.
Getting cost down is also an engineering problem but when cost plus is the model the taxpayer getting ripped off. If I were a student of Economics n engineering I'd study the Chesapeake Bridge and Tunnel and compare it to the Williamsburg Bridge and see what works.
Mr. Krugman, please check your facts. You are highly critical of private sector investment in public infrastructure, yet you offer no credible alternative for closing our massive infra investment gap. The simple fact is that everyone wants great infrastructure, but no one wants to pay for it. Time for a reality check. The *only* way we're going to invest our way out of the mess we're in now is by involving the private sector. The key is to do so in a fair and balanced way. Private sector investors will indeed invest in infrastructure without a *guaranteed* return. What they require is the opportunity to earn a *fair* return that adequately compensates them for the risk they undertake in delivering reliable service. Many are the examples globally of successful public-private partnerships (PPPs) where govts and private sector investors *share* in the profits above a negotiated return threshold. "Privatization" has become a lightning rod. Time to reboot. We need to shift the dialogue to a more realistic and rational discussion about long-term lease and concession arrangements and competitive auctions, which have been proven by the UK, Canada and Australia to deliver projects at lower *whole-life* cost than traditional public procurement -- that is, not just the cost of borrowing, but the cost of capital investment and operating and maintenance expense over the life of the asset -- all while shifting risks to those best suited to manage them and bring efficiencies.
2
Just like "great" health care that no one wants to pay for. Privatization only works if the developer, investor or what have you is going to make money. IE: Insurance companies.
1
the cost of borrowing today is less than zero, Interest rates are so low it will be cheaper than inflation Get your head in the game and out of your political nonsense We spend on borrowed money today, a bargain when we look at it tomorrow It has to be done!!! Go outside this country some day We are looking more and more like a 3rd world country Take a look at the Shanghai skyline today and wake up!
Why is everyone wondering where the government money for infrastructure is going to come from? Didn't we just give tax breaks to a large group of people who don't need it? Didn't we just give a huge tax break to our corporations withour closing any of the loopholes that were allowing them to already pay low rates? It's like giving all your money to an evangelical preacher then complaining you don't have money to fix the porch. We have to invest in our country using tax money managed by the Feds and the states and local communities, we've done it before, but we have to manage and audit these projects. We can involve the public sector if they are willing meet a reasonable profit for a common good. This is how a society should work---common good.
So-called public private partnerships (many of which involve foreign investors) and congressional proposals to exempt foreign persons from US tax on gains from investments in US real property amount to selling off the most valuable US property rights to foreign persons. Instead of paying for upkeep of property you own, these public private partnerships effectively result in selling-off prime land in the US to foreigners. The foreign investors will see that Americans still pay for the repairs by charging tolls and fees, but now those Americans will no longer own the property rights. When the people of a country sell off their land to other countries, do they still have a country of their own?
14
Yes, if we embark on public-private partnerships (PPPs), we (Americans) will still own our country and control our property because foreigners cannot take the property and go away. PPPs are uneven by nature. The "public" part (government) is far more powerful than the "private" part of the partnership because governments have power to amend the agreements in ways that would make ownership less profitable or even meaningless. It is the mutual dependence and symbiotic relationship between the two sides makes these partnerships work because in the long-run, neither side would benefit by being unfair to the other.
1
John L - your first and last sentences are spot on! As for "uneven", I might instead characterize properly structured PPPs as "balanced", offering fair compensation for the risks that each side retains. To be clear, PPPs are not right for every project, but for some, they offer improved prospects for delivering projects more efficiently.
Did anyone catch the reference to speeding up the permit process to two or even one year? Does anyone remember the 1960s and 70s, when urban renew projects ripped and bashed their way through established (and generally minority) neighborhoods? And when interstate construction drained wetlands, split farms in half, and rolled through sensitive archaeological areas? Certainly the permitting process has become bureaucratic and can be improved, but Trump's approach would simply be the wholesale abandonment of the environmental protections we instituted in the 1970s.
20
Using federal "seed" money for infrastructure investment?
Look to where it has already been done, Europe.
I've driven the excellent superhighways in Europe, they are everything we would want here; smart traffic signs that interrupt your in-car entertainment for urgent updates, re-route around blockages, and are activated by your car to call attention to speed or an impending slow down.
All this on smooth, multi-lane roads with minimal slow zones.
The catch? It is a public-private toll system that speeds you along at near 90 mph and roughly the equivalent of $7-8 US dollars per hour.
Add to this the $3 to $4 a gallon road tax and you see how our E.U. friends have a vastly superior transportation system.
The funding is there, that's the "secret" ingredient.
7
Somewhat like a gated community? Gentrification? A zone for the have's with the goal of keeping the riff-raff out? Those that can't afford the tolls up on the super highway are left to squabble over space on the crumbling roads below. Just another way to separate the chaff from the bran.
I agree, Chris.
My point is you have to pay for infrastructure.
I should have noted that the public-private introduces a for -profit middleman.
You end up paying more so you don't "raise taxes".
A political shell game.
The European model however, has multiple choices for the traveler; three levels of rail ( hi-speed, local, regional multi-stop) and of course the "B" highways which are fine, and free, they just have slow zones when passing through towns.
Your fuel taxes, high by our standards, supply the funding for the multiple choice transport.
One would hope that the American Society of Civil Engineers would be asked to weigh in on what the priorities should be in a national infra-structure initiative. They have become hoarse-voiced sounding the alarm about the sorry state of our infrastructure. I am not optimistic.
"I’ve never seen much merit in the theater-criticism school of political punditry."
Theater has always been a part of politics but it seems one party of our two party system has become all theater.
14
There is a long-running debate on whether the private sector or the public can most cost-effectively deliver public goods, such as transp systems and road repairs, energy via utilities, health care, etc. As a member of a city's committee on taxation and spending, I heard a convincing data that public works departments generally deliver road repairs at less overall cost than private firms, and with higher quality of jobs for the workers. Public health care systems consistently use much less of each health dollar for admin/profit costs (like 5% vs 25%). So under what circumstances should the public do public/private partnering, and give up cost efficiencies? Maybe under dire circumstances that the public entity cannot borrow or otherwise raise the capital needed, but the private sector could. That's very rare - it is more that the public sectors get hamstrung by political leaders that don't authorize the borrowing, or, in the case of Colorado last year, don't allow the legislature to put increased taxes for transportation infrastructure on the ballot for people to decide themselves. And because of the absurd controversies about raising gasoline taxes - that option was off the table, and the proposal was for increased sales taxes instead - a regressive tax on people of lesser means unrelated to transportation. Krugman is right - every project deserves scrutiny of who gains and loses. When public schools give Coke or Pepsi monopolies in return for $$, we're in trouble.
23
A 15 foot long bridge on a township road needs to be replaced. Cost estimate is $2Million (USD). Current Fed/State programs cover about 95% of the cost. How could any private sector organization build that bridge and make a profit? This is not an exceptional case: there are a LOT of small bridges on State/Local highways that are in similar situations.
20
Don, a state could competitively (in a transparent process, to prevent any corruption) select several private companies and, under a long-term contract (say, 10 years), require them to repair and maintain all the bridges in the state, under strict supervision and monitoring by the State highway department and/local governments. This type of idea is being considered in Pennsylvania and a few other states.
Don--Answer: private concerns will rob the American taxpayer, just as has our dear leader, and his cronies. From our pockets to his. He will actually BE rich by the time he leaves office. Bingo!
1
What tool roads and bridges do is to shift their costs from the general public to those who use the facilities. Personally, I believe this is a good thing as long as there are alternative ways to get from point A to Point B.
Toll roads and bridges are a dangerously regressive tax. Anything that increases wage-worker effort-cost while investors and financing entities profit, is a vector of further inequality. The financial industry (now swollen to 45% of GDP), which should serve productive activity by supplying liquidity, has instead commoditized most of the value created by labor, the production of things for people to eat, wear, live in and do more work with. In effect productive work is penalized to the benefit of non-productive.
6
I don't use it so I won't pay for it is narrow way of looking at it. Trucks that bring you goods and services use them. Public safety vehicles that fight fires and maintain order use them. People that serve you coffee or work beside you use them. They are a public benefit and should be part of the cost of a modern society. Selling them to a private enterprise to maintain and who can raise prices so that only certain members of the society can afford to participate is a path a world I don't particularly find very appealing.
3
Toll roads are fine where major traffic passes from one state to another (usually in E-W directions). But in Michigan, it's primarily in-state traffic which passes N-S in our local. We end up paying twice? And providing a profit to the new owners on top of it?
2
I bet there are investors who would love to privatize some more highways.
I live in Northern Virginia where we have such a road - the Dulles Greenway. It is privately owned by investors whose "right to raise tolls" annually TO MAKE A PROFIT has been repeatedly approved by the VA legislature and regulators.
It costs $6.50 to drive 11 miles, one way. $13.00 a day for a commute. When you get to the Dulles Toll Rd, the publicly built and owned highway that connects to DC, the toll goes down to to $2.60 to drive 16.5 miles. This toll road was built about 10 years earlier with public money - but of course there is NO PROFIT involved in this highway - only more reasonable transportation costs.
49
I was paying more for tolls commuting in ny and nj. It went into government hands. What's the difference?
Virginia, where I live, is a good example of how infrastructure can go wrong. Initially, HOV lanes were created to encourage carpooling and, to a lesser extent, energy conservation. Now they are being converted to a cash cow especially in the chronically congested northern Virginia D.C. suburbs. This was done because the state legislature could not find a way to tax its citizens to pay for projects as part of an integrated transportation plan.
What we now have is cherry picking those projects which can be monetized to include HOV lanes and (in Tidewater) tunnels at choke points which stand as a regressive tax on the low wage workers who must, in the absence of predictable mass transit, drive from areas in which they can afford to live to areas of employment.
And this shortsightedness extends down to the local communities. This year, Virginia Beach citizens failed to approve extension of light rail to the beachfront. NIMBY + greed trumps planning every time.
48
It's not that they couldn't find a way to raise tax monies for infrastructure, It's because Republicans ideologically oppose ANY tax increase. As a result NOTHING gets done.
1
Not shortsightedness. Except in the largest sense.
If you want the private sector to provide the capital for major public projects or assume the risk and responsibility for running them then they are going to charge you for it. And probably engage in rent seeking if the opportunity arises. Not exactly a revelation. Given that the federal and state government can almost certainly borrow more cheaply it isn't going to compute.
42
Water and sewer systems can be privatized; many are. But there's no question that investor-owned infrastructure must generate competitive returns to attract investors. It's not clear whether the cost to users will be higher or lower. But there's nothing new about private investment in infrastructure; it's just more Trumpisms he's trying to sell.
15
While New Jersey is rarely the case to follow, sewage infrastructure investments are usually financed through borrowing, with the interest expense passed through to consumers as an operating expense, and the principal amortized over the life of the long term loan. Therefore, it seems to me that the costs of raising money for infrastructure improvement is covered.
6
Paul, whenever I am in Illinois or Florida, I use toll roads. Point of use taxes to support infrastructure rebuilding is a great idea. You use it, you pay for it. Revenue from these projects will support private investment whether you get it or not. Of course, if you have a better plan, let's hear it.
5
I live in Massachusetts so I'm also familiar with toll roads. Toll roads aren't the problem. The problem is that instead of the state collecting the funds it would be private companies, and that is problematic. Roads are for everyone and should be paid for by the state or the federal government, not a private corporation.
Additionally, the United States needs more than new bridges and roads. We need upgraded sewage and water systems which are not as easily monetized. Those will require state and federal investment and the President doesn't seem to understand that.
60
There are a lot of things that are important for the citizens of a great nation that don't make a profit. These are all avenues for public expenditure. Basic science, services for the poor, libraries, national defense. Of course, that implies the concept of "great nation" (aside from just a conquering nation), and "citizen" (aside from consumers). Define these things more broadly, you tune the dial more toward "socialist". Define them more narrowly, you tune it toward "oligarchy". Somewhere in the middle are our Democrats and Republicans.
15
I live in Illinois, transplanted from Washington state where there were no toll roads. What you come to realize is that even if you never drive on a toll road (or any road for that matter), you still benefit from the existence of such infrastructure. Consumer goods travel, mail gets delivered, commerce is enabled, etc. etc. Infrastructure is a common good.
7
Your analysis on infrastructure and private money is right on the money. The entire concept of local government funding for infrastructure is imbedded in the concept that this source is the source of last resort. Private investment comes with a price and its called return on investment. The public has an adversity to pay for "return on investment".
here are a few questions
Why does someone get to "make money" when I pay for my water and sewer services?
Why does someone get to "make money" when I pay tolls or drive down my local roads.
Why does someone get to "make money" when i pay new school taxes?
There aren't any good answers for these question. The reason they are asked in the first place is that most people thought that it was the governments responsibility to do these tasks not private money.
Why has government backed away from providing and supporting infrastructure? answer-people/the public have an adversity to pay. Our local and federal government spending has changed dramatically over the last 50-60 years and budgets are strained to maintain and support massive increases in health care and pension obligations of governments, both local and federal. Choices have been made and the only answer is to raise revenue to pay for such vital entities as water, sewers, roads bridges and schools.
We as a nation are experiencing the impact of elasticity in tax rates. People call them revenue generators, property taxes, tolls etc. but they are taxes.
38
Itsd called private enterprise where somebody gets paid for work done. I used to pay $.25 for the Verrazano bridge now its $18 dollars - where does our brilliant City and State government spend that money and how is the problem. Private enterprise has to justify their bottom line or they may go out of business while government seems to always blame the old administration and just raise taxes.
Matt,
Everything has a cost, who delivers it more efficiently? That town worker you see leaning on his shovel would not last 2 minutes at a real construction company that has to be efficient to make a profit. What does last resort mean to you?
America is the largest cookie jar in history. Many grubby hands dip there and Americans accept that as normal.
I beg you to look into what happened in Indiana under Pence and Mitch Daniels with the building of highways. I-69 was one of these public-private "partnerships" that led to the public money to be misused by the private investor to pay debts elsewhere. The local businesses contracted to do the actual work were not paid for months in a row (so no real investment in the local economy even though the local population was paying into the public funds being syphoned offshore), and then they stopped. The project is 3 years behind. It had NOTHING to do with how long it takes for approvals. It had to do with the very idea Pence supported, trusting a private company to care about the common good as opposed to self-interest. Currently, the government has been forced to take over the project in order for it to be completed. Lots of lessons to be learned, all of them pointing out major flaws in the thinking and actions of the current VP and his Republican colleagues. More recently, the same state legislature voted to make it far less of an incentive to invest in renewable energy (from same rate as the cost on the grid to 40% of the rate), punishing schools, churches, and many homeowners to the benefit of Duke Energy, a firm lobbying successfully with the same Republican leadership.
218
Ben Franklin supposedly said, regarding the Postal Service, that there are some things that the public will demand, or that must be provided/built, that will never be profitable and therefore will never be done by private enterprise. These therefore must be built/provided by government.
In "Americana: A 400 Year History of American Capitalism", I was amazed to see the projected cost for the Erie Canal was $6 million, at a time (1811) when the entire US budget was $8 million. The canal created so much value for so many enterprises, it more than proved its worth, but there were many who believed it was a waste of time and money. It would probably never get built today.
28
Thanks for that information! Very interesting.
Sounds like an interesting (illuminating) situation; If the NYT truly aspires to be the National newspaper, where is the front page expose?
1
The very same people cheering on private investments for public use infrastructure will be first to complain about the tolls, fees, and charges for them. Unless, of course, they are the ones profiting.
80
My favorite example is Richmond's privately run Pocahontas Parkway. The toll to traverse its 8.8-mile length, which keeps rising with each passing year, is $4.30, or 49 cents a mile. If that were a gas tax, it would be $10 a gallon. Except that of course, when you drive the Parkway, you're still paying the gas tax as well!
99
+A few years ago Chicago sold its parking meters to a company for a sum I heard was 1 billion dollars. Chicago had and has structural financial problems and that means higher taxes. Taxes and fees and parking meters are the only source of revenue, so what was Mayor Daley thinking to give away a large part of the revenue stream? Same thing with private ownership of roads, before governments built roads, private parties charged tolls and it was a bad affair. Dopey idea without some serious evaluation.
39
More fun with " There’s no way to turn sewer systems, ... into profit centers"
Of course there is. Here is the official posting of the City of Chicago
"Water-Sewer Tax FAQ"
"Why is the City Adding this Tax?
The Chicago City Council and Mayor Emanuel approved a four-year phase-in of a water and sewer utility tax. The revenue from this tax will be used to make certain mandated pension payments.
These mandated pension payments will support the retirements of many municipal employees, including our snow plow drivers, our librarians, and CPS non-teaching staff, such as classroom aides."
https://www.cityofchicago.org/city/en/depts/fin/supp_info/utility-billin...
2
How about an infrastructure tax on the 1% and on corporations at 10% on top of the current tax law. No tax, no corporate infrastructure use and no license to conduct business.
43
Looking at the opinion headlines in this morning's online Times, I am reminded of the small kid "Mikey" in the Life Cereal TV commercial of years ago.
When it comes to anything Trump, the Times, like Mikey, "doesn't like anything".
5
The difference is the cereal was tasty and private funding of public infrastructure stinks. There. I translated a Nobel laureate for you.
1
Well, what’s there to like? Trump ran a university scam and now he’s trying to sell us bridges...
I am getting tired of the Democrats and even more tired of the New York Times.
They are like people who are having a funeral even though no one has died.
"But someone WILL die. We are just anticipating that death."
"Sure, enjoy yourselves!" Is my response.
1
Is Mr . Krugman informed about municipal infrastructure ?
Sewer System do have revenue streams. Called sewer tax
8
Absolutely. Often based on metered water consumption.
6
Yes, municipal infrastructure has the "sewer tax" trickling in monies to the stream. To fill that stream, in other words, to make a profit from sewer services, would require an unacceptably high tax rate. This is Prof. K's point.
30
Sewer rates can run up to $1000 a year or more for a single family home on some systems. Additionally, new connectors, or expansion of existing connections, usually carries a capital contribution requirement. I have worked in the economic regulation of utility systems, including sewer systems, for over 40 years.
4
I was hoping that president Trump would mention "digital infrastructure": internet access for all, centralized medical records, on-line voting, encryption standards, data privacy for our citizens, and so on.
We are sadly falling behind many other nations in this critical area. In my view, our digital health is as important as fixing our physical infrastructure.
The Times recently published an article on Estonia recently that knocked my socks off. Look it up if you want to see how far behind we have become in the digital realm.
35
That has already been 'privatized.' Trump is looking to sell off (at a loss) whatever has not been privatized yet -- roads, airports etc.
1
Federal money for infrastructure? There is none. It was just given away via the tax cuts. One thing the American public seems never to have learned: When you continually give tax cuts to the wealthy, as each Republican administration seems to do, there is no money for essential programs like infrastructure, healthcare and schools.
156
Infrastructure spending should focus on the four elements required for successful economic development: infra-structure, esp. housing and transportation (including food/retail); business clusters, related businesses supporting major employers (eg. shippers, lunch places, etc.); directed regulations (tax breaks for new hires) and training; and lastly, capital and innovation (grants/loans). Without access to housing and transportation, business support, incentives and training, and capital development will be doomed.
Partnerships can established to strengthen these four elements. Experts (Paul Craig, former director of development for the World Bank, others) have offered deep research explaining how the criteria for successful growth, whether the Pearl River zone (China), Research Triangle (NC), Harlem's African Market, or the revitalization of Washington, DC's Ward Five (12th St. NE) works.
Trump's delusional focus on capital growth, trade deals, is not economic expansion! It comes at the cost of spreading waste throughout the economy by cutting healthcare and abandoning global partnerships that would produce long term wins with Indo-Pacific countries, whose middle classes will double by 2025. Trade deals do not capture numeric/spending growth of the 3.2 billion middle class, earning between $14.6k to $146k.
Trump's infrastructure plan ignores infrastructure needs, denies labor retraining. His plan, an afterthought, abandons the basis for true growth.
31
It was nauseating enough listening to a president who has worked so hard to advance the interests of the richest few at the expense of the many claim credit for the strong economy, but Trump's remark about Americans being dreamers too was the most offensive part for me. What little credibility he and Republicans had about their intentions of offering a 12-year path to citizenship for the children of immigrants protected under DACA was shot dead when he pitted Americans against them.
Everything this president does further divides the nation, and everything he represents is offensive to core American values of honesty, justice, fairness, and opportunity; indeed, with Trump and Republicans running our government, already fewer foreigners are visiting America, and it only stands to reason that the best of them will soon no longer want to live among a people that elected him their president.
82
Oh, pardon me, but I failed to even mention Trump's supposed plans for rebuilding America's infrastructure, but Professor Krugman said it all - nobody in their right mind would believe that this president or his party could ever do anything to benefit the nation as a whole without further enriching themselves and their oligarchical enablers even more.
51
We should ask ourselves if Americans are interested in public infrastructure investments. They may just prefer low taxes and drive SUVs over potholes, seriously.
I spend part of my time working in Flanders near Brussels, which is merely average in public service innovation and infrastructure. Healthcare is turning paperless this month: pharmacies and health insurance get everything they need straight from the doc's computer. I can access or request all my government files and history (taxes, pension savings, birth certificates of my children, etc.) digitally, authenticating via an App or by a chip on the national ID card which every citizen receives and uses to vote. Most (or for some people all) of the tax return is automatically filled out by the government. The regular trains from Brussels to Bruges or Antwerp travel faster than our "high speed" rail like Acela and needless to say they brake automatically, the real high speed rail here has no level crossings and go so fast that Brussels to Paris takes only 1h20. Speed limits on highways around big cities are dynamic, based on current traffic. Speed traps are being replaced by the better system of measured averages over longer stretches with automatic billing. The list goes on. America is seriously falling behind, but again, this is a choice we have to make. Folks in Europe pay a lot more taxes.
135
Absolutely agree. For much better services in Europe I’d pay a lot less in taxes there than I have to do here from my own money. That’s because a government can set or negotiate prices, implement large scale efficiency in providing services, and enforce safety and environmental regulations. Plus they don’t have to make a profit for shareholders.
26
Liz's otherwise excellent comment ends with a sentence that will make about 35% of all US voters automatically reject the entire rest of the comment. For the remaining 65%, I would remind them that the EU is doing quite well economically at the moment. It is quite competitive despite much higher taxes, "exorbitant pensions to workers", powerful unions, "extravagant" healthcare for all, and many other giveaways to the 95%. By any GOP analysis, Germany should be an economic basket case and France should be in total shambles.
22
Liz from NYC: "America is seriously falling behind, but again, this is a choice we have to make. Folks in Europe pay a lot more taxes."
I rode on a high speed train in Hong Kong around 15 years ago. The US is falling behind. As long as 'socialism' is a dirty word we will continue to lag. Why not have higher taxes on the wealthy and profit making corporations and provide essential services such as healthcare, education [50% of American public schools are in bad physical shape], infrastructure, green jobs and a clean environment?
The GOP policy of more money for the wealthy and corporations has proven not to work. Congress has been bought out by wealthy donors and this old failed 'trickle down' is again being promoted as a way to thrive. Middle America and the poor continue to suffer and how many in Congress care?
Public projects are a bit less efficient and pay exorbitant pensions to workers.
Private projects run more efficiently but require a profit margin and so cost at least the same as the public ones. No difference in cost to the consumer! The main difference is that with the public projects, at least there is a large group of workers not fully dependent on Social Security, whereas with the private projects, there are just a few very rich businessmen. Society is probably better with the public plan.
23
Public projects are manned by workers who participate in Social Security. There are no public construction workers, the work is contracted out. Public projects with federal participation are 30% to 60% more expensive in blue states than they would be otherwise because of pre-negotiated labor agreements that require non-union contractors to contribute to union pension funds even though their employees do not get any benefits. Davis-Bacon also requires that the wages be set at double the market rate. The dirty secret of Bacon-Davis is that the workers in non-union contracts get paid higher wages but are substantially more productive than union construction workers.
Union officials and Democrat politicians are better off with corruption. Workers and society are better off otherwise.
There's also accountability to the people with a public project, unlike a private one.
1
Consider the plight of taxpayers who have to pay to finance state and local government coffers when their political leaders plead with business to settle in their locales with attractive little to no tax offerings and other incentives. The most notable of late being Amazon which has the entire nation begging it's leaders to settle in their locations. Through the years, an accepted but questionable practice of bribing business, touted as economy building and jobs creating, has led to an American practice that is widespread and considered the normal way of Government Business conduct. Now our economy is something of a business of money and protecting money. The taxpayers will suffer the burden of paying for public works and services that mostly benefits the big business. I compare it to the Mafia dock employers who took cash kickbacks from workers for a day of working.
These practices are so widespread and never given a second thought, but Trump's Infrastructure plan brings this to a new level that jumps out at us; now we have to not only cede the infrastructure that we taxpayers financed originally and continually, but Trump wants to give that property of the people to the wealthy businesses and investors to profiteer from, at our continuing expense. Think about that. If I can coin a phrase, I'll call it, "The Highway Robbery". Additionally, that is with taxpayer money thrown in for the businesses. This will not make America great, except maybe a great nation of suckers.
45
Take a look at Carrillion and East Coast Mainline in England for examples of what happens when private firms invest in public sector projects. Two sets of people end up paying: the public, in the form of higher costs of living; and the public, in the form of taxpayers’ money being used to pay for bail outs.
37
This has a striking resemblance to the privatization and subsequent theft of Russia's public assets by the emerging kleptocracy, which eventually gave us Putin. Ironically, Putin also ran on the premise of draining the swamp - in his case the oligarchy - but instead gave us an evolved oligarchy, with Putin and his cronies in control of a variously estimated 35% of Russia's wealth.
58
While we're at it, let's privatize the rest of the "socialist" program out there, shall we? We're already headed toward privatized education; how about if we do the same with libraries? Charge, say, $50 for a library card and $2 for every book checked out? How about $1 an hour for use of the library computers? After all, private business ALWAYS does it better, right?
There is a simple mathematical equation at play here: government-run projects do not need to earn a profit; private ones do. When we privatize, we increase overall costs - that is an inescapable fact. And that is why so many things - education, health care, fire & safety, and infrastructure - should not be privatized.
Bridges and roads are not widgets. Children are not widgets. Emergency appendectomies are not widgets. When in God's name are people going to get that through their heads?
354
I'd guess people will only "get it" just before the revolution.
America did not examine European models of health insurance for good ideas, so I do not expect that they will look at its experiences with public/private partnership experiments in the past. But they should.
One example: https://www.reuters.com/article/water-utilities-paris/pariss-return-to-p...
13
The trump team missed their opportunity to fund infrastructure by not tying the repatriation of offshore corp funds to the mandatory purchase of infrastructure bonds backed by the us govt.
16
All that repatriated offshore money will turn into wages. Trump said so.
The decline of American infrastructure, as a news story, is at least 30 years old. In the late 1980s I published an article in Across the Board, the Conference Board magazine, about a new construction testing lab at Lehigh U. that would help address, yes, the crisis in American infrastructure. We could have a publicly-financed infrastructure boom in the U.S. But the Southerners and Westerners who now control the government, who don't believe in centralized (or redistributive) policy-making, will never agree to fund it, because it mainly (not entirely) means huge federal spending on cities in the Northeast... and maybe renewed influence for the Northeast. Real infrastructure renewal is probably a kicked-can until... the Northeast has renewed influence.
16
The Northeast has old infrastructure which it has not maintained, preferring to divert those funds to pensions for civil servants. the South and West has newer infrastructure which it has maintained.
Roads, bridges, sewer and water systems, mass transit, schools are all local concerns, with occasional state border issues that might require federal involvement.
The blue taker states would love to impose the cost of upgrading their antique infrastructure on the rest of the country. Meanwhile, the old northeast is losing population to the south and Midwest where underfunded pension plans are not consuming 30% of state budgets. Retirees from the NE are taking their inflated pensions and moving to low cost locations.
The NE is free to have public-financed infrastructure, financed by themselves.
The NE is not going to get renewed influence while its population is migrating out.
The infrastructure crisis is concentrated in the old cities that have been governed by Democrats for decades, always begging for the federal taxpayer to kick in money to cover their corruption and inefficiency. Throwing good after bad is a losing strategy.
2
Roads, bridges, sewer and water systems, mass transit, schools are all local concerns
Interstate and US highways are federally paid for -- especially all those big new ones in the south. The same is true for many water systems (e.g. TVA), much mass transit and plenty of "local" schools.
Your plan is nothing more than an attempt to have the north pay for everything, you for nothing.
Wow. Is eb an example of the distorted critical thinking taught in Southern schools?
Those "blue taker" states? Try looking at government data that isn't right wing propaganda, eb. You'll find that blue states' tax money goes to the red states that are either unable or unwilling (Texas oil barons, for example) to tax themselves, preferring to mooch off the workers in blue states.
The US needs to spend $500B/yr, for the next 3 years, starting right now.
It has a major infrastructure problem which will be made vastly more expensive with future tragedies unless something is done right away.
3
They gave the money to corporations that were already at record profits and stock levels, and were buying back their stock already since they did not know what to do with all their cash. And they gave it to rich people, who the Paradise papers say, invest offshore with most of the money, again mainly in stocks and bonds. So after the tax cut, we just don't have the money for infrastructure.
26
I recall that President Clinton gave some long, detailed SOTU speeches. And the response was that people liked them because of the details and for his willingness to explain things.
The SOTU is one time when many people (at least in the recent past) pay closer attention to what POTUS says because the speech has a tradition of being important and substantial.
The more recent and increasing trend towards calling out all manner of special guests has diminished the words & meaning of the SOTU and turned it into "Oprah".
All those political consultants, marketing advisers, hangers-on and TV talkers have succeeded in dumbing down the SOTU into bite-sized phrases like: "sticky messaging", "appeal to the base" or "targeting a demographic" and "tweetable" SAD!
17
He's a spoof merchant. This infrastructure plan is not entrepreneurial in any shape or form. It is funded by tax dollars, which get funnelled into shareholder profits. It's a massive transference of power from Main Street to Boardroom, where the gains are used to lobby special interest groups, channel offshore or fund political parties. Funny how none of the gains go for public benefit in philanthropic programs that society needs. A Trump land grab by stealth.
17
I cringe when Trump talks about public / private partnership. As other writers have pointed out, it has the distinct odor of scam wafting about when he says it. Given his appointees to head EPA, Interior, and Agriculture, I expect a wholesale sell off of public land in the west. What a great trade! Big money mining, ranching, and timber operator will get a boon of biblical proportions, Trump cuts land management costs, and parts himself on the back for rebuilding the country. The only downside is we permanently lose our heritage and leave our descendants impoverished. On the other hand, Clivon Bundy and his ilk will make out pretty nicely indeed.
23
Easier for rich man to pass through eye of needle than to get to heaven. Just sayin'
What do you expect? Democrats - government of by and for the people. Republicans - government of by and for private enterprise.
10
Infrastructure is not an issue--- like The Wall or Obamacare repeal--- that speeds the heart of Trump. He's already forgotten whatever he said about infrastructure in his speech.
Any infrastructure bills that make it to the floor of the House or Senate this year will be the product of Congressional Republican privatization ideologues, and Trump will at most utter a few words he thinks make him look presidential.
11
Yes, I have to ask "And who would get in on these lucrative privatization schemes?"
My sense is both sides of the aisle stood at the right time.
They could have rehearsed that show.
We really are a trusting people, but we should know who is taking us for a ride ........ maybe all of them?
5
Some of them more than others.
The funny thing about 2018 infrastructure it doesn't at all resemble the infrastructure of 1955.
259 cities represent 85% of American GDP. America doesn't need roads and highways it needs modern liveable easily navigable urban areas. It needs high speed internet and ways to get product from a to b. People travel is less needed.
When I think of 2018 infrastructure I think of Pullman on the South side of Chicago a community designed and built for Pullman workers.
America's cities in our modern economy cannot be the Levittowns of the 1950s. Form follows function and before hiways and bridges lets build what is needed cities for the digital economy.
https://www.washingtonpost.com/blogs/govbeat/wp/2014/03/06/cities-drive-...
8
$1.5 trillion is chump change in comparison to what the Republicans have already set their lethal sights upon: their messianic mission to privatize the entire government.
Social Security and Medicare remain the Holy Grail of privatization, and would constitute the greatest shift in cash-flow from the working class up to the Wall Street overlords in U.S. history.
Republicans have maintained their unrelenting push to 'outsource' military operations to sinister para-military rackets like Blackwater, recently rechristened but not reformed.
And then there is their drive to eliminate public education in favor of Bible-based diploma mills modeled, perhaps, on the shining example of Trump University. There is no nice or polite way to state that the Republican party has devolved into a crime syndicate.
141
And, Jonathan, that would make our Oligarchs nothing more than crime families. The only difference between the Genovese Family and the various Oligarchs is the heights of influence buying and peddling, that and they generally don`t shoot people, they starve them by bankrupting the public bank.
1
Well, everything will be a profit center in the near-future. (You owe me $2 for this response. No personal checks, please.)
1
There is a way for private investors to participate in infrastructure. They're called "Bonds". Ever hear of them? I just invented it. Investors give the gov't money and the gov't guarantees a payout above the principal we'll call interest. It's my scheme I just doodled it out on a napkin at KFC. I think its going to be the biggest thing in the history of everything.
182
Bonds imply borrower (public) ownership and a revenue stream (taxes) to repay the bonds. Can't have any of that.
Excellent. Most excellent.
My suspicion is that Bonds, useful as they have been, won’t provide the level of return on investment that Oligarchs want. Nor will their use transfer the ownership of what is now public property. Which is not what the Koch’s, Mercer’s and the rest of the uber wealthy desire.
But private financing of essential infrastructure is another way to guarantee returns to capital, socializing costs while privatizing profit. The Republican Dream.
15
There is more than a whiff of looting in Trump's infrastructure plans. He doesn't want to fix it, he wants to create opportunities for his kleptocrats. America is getting smaller and less viable by the day.
66
Trump, take a hint. Serfs are less motivated and less productive than middle class workers. This will not end well.
1
If the $200 billion of federal money for infrastructure does materialize, it's likely that it will come from cuts to the social safety net. That should be a non-starter for Democrats.
20
The numerous mass shootings of late were mainly by home grown criminals most immigrants I have seen want the promise of the American dream which is not the entitled silver spoon spawn crowd crying for tax cuts for golf courses,
11
It will be once the immigration is more centred on high skilled folk who will have particular expectations of. Their new country. We see more punditry from high skilled immigrants who are good communicators and feel quickly assimilated.
If you believe Trump then I have some property in Florida I will sell you for dirt cheap...oh wait Trump already did that.
13
There's a history of "Public Private Partnerships" now dating back to 1989 in the UK, this link is to an instructive FT column: https://www.ft.com/content/ae138d76-ff88-11e7-9650-9c0ad2d7c5b5.
1
Trump got projects done by stiffing his contractors. He is now going to stiff the US taxpayers!
He already gave away the budget for his infrastructure plans, were just given away with his tax cuts.
31
We know that he can read from a teleprompter and sound somewhat articulate. His speech was typical of any dictator. It is us versus them. Good versus evil. Internal and external threats to our safety and way of life. The dictator knows what's best for America. Don't be fooled by his statesmanlike words. Beware of his actions.
25
Trump is hot air, dangerous air.
Democrats need a breath of fresh air.
With a year under his belt, Trump is emboldened and the Democrats have yet to mount a cohesive vision.
9
This analysis is what we expected from the time of the campaign. As usual Trump is trying to sell us another phoney bill of goods
9
I’m fine with privately-owned infrastructure as long as it’s paid for using only unsubsidized private funds. That means no preferential tax treatment and no direct public dollars. If investors think such a venture will be profitable, it’ll be financed. What’s unacceptable is to use preferential tax treatment and/or direct public dollars to subsidize assets whose benefits are privately-held.
6
A lot of infrastructure is built by states and cities. What has to be done by the Federal government? It seems to me that this is the first question to be asked.
Long distance transportation infrastructure needs to be taken care of by the Feds. That includes roads, and maybe power lines. There is also a case for Federal funding of new ports and Mexican border crossings.
There are a few holes in the interstate freeway network. There is no direct freeway from Dallas to Denver or from Houston to St Louis or from Phoenix to Las Vegas. These could be filled with new projects. There is also a case for building roads that allow long haul traffic to bypass congested metro areas. For instance traffic going south from New York would be better off bypassing east of Philadelphia and Washington.
In some cases the Feds simply need to relax environmental laws to make it easier to get new infrastructure built. Airports in the north east are surrounded by swamps and bays and filling in those wetlands would enable the airports to expand if the wetlands were not protected by Federal environmental law.
Rising natural gas and oil production has created a need for new pipelines to move these commodities, and perhaps for new export ports to sell them to our overseas allies. The role the Federal government can play here is to make it easier to get the projects approved.
Finally, the Feds should get to work on building a long term repository for nuclear waste.
1
Trump's $1.5 trillion infrastructure bill was already signed into law on December 22, 2017.
It invested in the nation's billionaires.
That law is now helping to build third and fourth mansions for a handful of millionaires and billionaires.
It's reinforcing the arches under the 0.1% Citizens United Campaign Finance Bribery Law.
It's shrinking already low tax bills for rich people and rich corporations to as close to zero as possible, ensuring the smoothest possible rides and landings for learjets at private airports.
It's helping to ensure that obscenely rich people and their great-grandchildren never have to work again.
It's helping to increase economic inequality so that Robber Barons can rape the economy, the environment and the labor supply as they see fit without any representative government or pesky citizens' regulations getting in the oligarchic way.
It's maintaining a clear channel of communication and collusion with our dear allies in the Kremlin so the Russians can carefully steer the American ship of state behind Mother Russia.
It's building an authoritarian-entertainment regime that is methodically removing the rule of law form relevance, destroying the free press and truth as a functioning element of society, stacking the courts with corporate shills, and ramping up the voter suppression strategy for the next fake American elections.
The 0.1% have all the infrastructure they need.
The 0.1% and Trump have no intention of paying for anything more.
422
Well written and with wit. Have you considered a career in political commentary?
Some points:
1) Privatizing public assets is an invitation to corruption, but
2) it also means steep rise in prices, as privateers have investors they have to lavish with great oboli.
3) It also mans degraded services for those in less densely populated areas, where investments re not considered important.
Please, do not forget that the current GOP is intent on rolling back FDR. That is their ultimate goal.
40
Public-private infrastructure partnerships are a big deal in Russia. For example, VEB, a Russian state-run bank that's well-connected to the Russian power structure, has done several public-private partnership deals in Russia that have turned out to be profitable for the oligarchs and not such a good deal for the Russian taxpayers. VEB has also been a major sponsor of business deals related to Trump? Quite possibly Trump is getting infrastructure "advice" from the Kremlin or its friends.
Trump is essentially stealing a page from Putin's playbook here. As in many other areas, Trump wants America to be more like Russia.
14
Trump really should move to Russia. And stop ruining our great
country.
2
The most disturbing thing is that for many, it's the same to here Trump say "1.5 Trillion" as for there to be that money available. They simply don't care how it is gotten, they feel it's right that it should be spent and they hear Trump sound like he is going to do it. This is the President speaking and he sounds nice and will fix everything.
How do you get around what I just wrote? That's my fear.
2
The president of all Americans (yeah, right) should be encouraging building of bridges, not walls. You can't cross rivers on fake money and empty promises.
5
Get over it, Krugman. Democrats lost the 2016 election. I could have written this column before Trump even spoke. You are so predictable.
No, Trump’s not presidential. He’s even embarrassing sometimes. But here we are in 2018 in a divided country with our messy, imperfect democracy.
Stop the knee jerk opposition to everything Trump proposes.
1
Your comment sounds knee jerk. His column is the opposite. It is researched and reasoned.
1
Okay. Noted. What exactly was Obama's infrastructure plan? Can't recall. Though I guess if you don't have one, you can't be accused of scamming.
Talk about scams. And this column from the same guy who said five years ago as a good Keynesian he'd start building pyramids if it would help restart the economy. What's the difference now ... other than there's someone in the White House he hates?
1
JW, here's a few lines from a 2015 news report to jog your memory, "Senate Republicans defeated a Democratic amendment to the proposed 2016 budget on Tuesday. It was aimed at kick-starting negotiations between the White House and Congress over a new multi-year program for funding highway, bridge and other infrastructure projects.
"The amendment, offered by Sen. Bernie Sanders (I-VT), called for $478 billion in new spending over six years but without increasing the deficit. The amendment went down 52 to 45 along party lines.
84
You don't seem to get that Keynesian theory implies the building of useful infrastructure, and clearly missed the point of the hyperbole.
11
Trump's infrastructure plan is a hollow scam.
After his Republican Tax Cuts there is little money left for infrastructure spending, probably less than 200 billion for new projects and most are already planned.
The Republicans want to privatize infrastructure spending. This is a horrific idea that will sell public assets to the elite few to profit on public roads and bridges and amounts to a tax giveaway to the extreme rich. There is no way this will accomplish the 4 trillion dollar investments that civil engineers estimate America needs to modernize. What is needed is public spending through
government bonds and tax increases!
This is not compatible with Trump and the Republican ideology and agenda. Therefore as Dr. Krugman suggested, this was just hot air and empty promises.
Pathetic!
17
A reminder about privatizing infrastructure spending.
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
― Benito Mussolini
3
Trump is offering yet another scam that is designed to line his pockets? Wow, who could have seen that one coming?
42
It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?
Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.
Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news. What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis.
12
The market responds best to what Trump doesn't do. 3 more years, so long the time, so short the art to learn. Trump years are dog years, but so far not the end of the world.
1
More money for the military will keep Americans safe. Driving on one of the nations deteriorating bridges, you're on your own. Good luck.
13
Can't we convert beautiful coal into levees?
Okay okay
Use coal to build high speed rail.
Wait.
America doesn't need high speed rail.
They are a European/Asian thang.
And
And all those public/private "partnerships" will be on the local governments when they go bad.
As American industry ages or departs.
As American infrastructure rots and erodes.
As American basic industry, tool and die, steel, disappear
China rises.
18
Still waiting for the market to 'never recover', Paul.
The market has been recovering since Obama's economic plan was passed in March of 2009. Perhaps you were one of those who dissed it! Those of us that didn't, rode a 6500 DOW to where it is today; an almost 400% rise. And who was president for the overwhelming part of that period?
17
You seem a little behind the curve, Scott. Krugman retracted that prediction very soon after he made it. If this is the best response you can make to his analysis of Trump's infrastructure proposal, why bother?
12
Aside from being able to grant themselves and their cronies a tremendous tax cut, Goldman Sachs moles Mnuchin and Cohn signed on for this infrastructure scam. As part of the plan, their firm will be managing hundreds of billions in private financing and skimming outrageous fees right off the top. By the time they are done, there won't be enough money left to pave a slice of toast.
21
We need a giant investment in infrastructure.
This ain't it.
35
Krugman might be right---Trumpfrastructure might be a scam. But the devil is in the details.
Trump cites a large figure, $1.5 trillion is a lot of money. Krugman says only $200 billion would come from Federal Funds.
But let's compare with Obama's response to the Great Depression, an ARRA which would spend $787 billion, later raised to a little over $800 billion.
According to Wikipedia, about $46 to $47 billion of that was slated for infrastructure. Most of the ARRA went for additional welfare benefits and tax cuts for women with children.
In other words, very little was devoted to infrastructure.
And that reflected the priorities of Democrats who see their constituents as single welfare mothers, not men who don't have jobs.
Welfare mothers often have children with many different fathers, and the welfare system often makes it advantageous to expel the fathers from the family.
The result is many single parent families among the poor.
China does things quite differently. Instead of paying poor women to have children, China introduced a one-child policy which keeps families small, and controls population growth. This allows China to focus on raising living standards for a more slowly growing population.
China has put its men to work!
China now has skyscrapers in Shanghai that are higher than any in Manhattan.
China has constructed 12,000 miles of high speed rail. The US has constructed 0 miles.
Donald Trump is at least standing up for America's working men!
That's interesting. The wikipedia page I'm looking at says " The remaining 45%, or $357 billion, is allocated to federal spending programs such as transportation, communication, waste water and sewer infrastructure improvements; energy efficiency upgrades in private and federal buildings; extension of federal unemployment benefits; and scientific research programs."
6
"China introduced a one-child policy which keeps families small, and controls population growth."
And Trump has appointed people to the Department of Health and Human Services who do not believe birth control works!
http://time.com/4975951/donald-trump-birth-control-mandate-sexual-behavior/
And BTW it is the Republican Congress that consistently votes against funding Amtrak! Has Trump proposed more funding for Amtrak? Why should he, its mainly profitable in Blue States!
15
They scrapped the one-child policy a while back. Seems it led to male/female ratios getting seriously out of whack.
"Welfare mothers often have children with many different fathers"- laughably out of date stereotype.
9
$1.5 trillion. Isn't that what the GOP tax "reform" bill just cut in revenues? Its now simply unaffordable.
Outsourcing of infrastructure to the private sector? That will succeed as well as the plan to have the Mexicans pay for "the Wall."
This is why there were no specifics on this issue in the SOTU speech other than it would be beautiful.
4
$1.5 Trillion infrastructure spending? Sure! Just tax those who just received the $1.5 Trillion tax cut largess to pay for it. They are the only ones left with the resources. Zero Sum Game. They will remain just as rich as they were last year.
No problems.
7
Paul, you have been writing about this infrastructure scam for over a year by my recollection. Please keep it up. I'm pretty sure the majority of people in this country have little interest in the privatizing of roads, bridges, sewer systems, and so on. Of course, the majority of people in this country have little interest in the destruction of the environment, deregulation of the financial system, deporting Dreamers, using fundamentalist religious principles to govern schools, and on and on. Yet for some reason Trump supporters don't associate his actions with what's in their best interests. Personally, I don't get it, but I'm glad you are using your loud voice to call attention to this infrastructure craziness as well as other actions that Trump and Republicans are trying to foist on us.
11
If there was a no-brainer out of this election, it was infrastructure: repair, maintenance and new. Unfortunately, the winner had less than no brain.
8
Where was the infrastructure plan? It was billed earlier as a $1.5 trillion project but like other policy areas of this speech, it was worth about as much as a diploma from Trump University.
8
Smoke, mirrors, and canal water.
as usual from The Don.
5
You have become one of the most negative pundits around. I agree with you almost 100% of the time.
6
Gee, Paul, maybe Mexico will pay for it...
113
Hold your nose boys, the hokum is here'
The con heard is really severe
If you buy this Big Lie
Then you think Pigs can fly,
And you've nothing twixt right and left ear.
110
Hilarious but true - you just keep getting better Larry !! I'm sure glad someone can keep a sense of humor after listening to Trump crowing like a rooster with its beak pointed high, but that must be one of the secrets to longevity.
Public works projects typically have a government build something that will last several decades.
Public/private-partnership arrangements are not partnerships, but are the public surrender of public assets to a private entity that will build something that will last but a few years, and not more than a decade, when the private entity hopes to rebuild the same project.
This short-term design/build vision worsens Paul Krugman's observation that the results of public/private partnerships are use-taxes of varying, sometimes unpredictable amounts.
If public/private partnerships were around when Ozymandias ruled, his statue would have been of such poor quality that none of us would have ever heard of the 'huge' king.
18
This could result in the Republican flip. We need infrastructure dollars more in the trillion dollar range to be serious. Deficit hawks plus one, Paul Ryan at the ready to tackle "entitlement reform" to finance the infrastructure bill. No time like the present to tackle Medicaid, Medicare and one assumes Social Security. Why not have seniors finance infrastructure they will have so little time to enjoy the benefits? Isn't that the Republican way?
10
Private investment doesn’t always work on toll roads. Case in point: E-470 in the outlying areas of Denver. It seems to be the only toll road in the state, and it’s tolls are rather high. Hardly anyone uses the road, instead clogging the nearby FREE interstate highways.
Most people who use roads are among the middle class whose wages have not risen significantly over the past 30 years. We cannot afford and will not use toll roads if there is an alternative - even a slower, more congested one. Our incomes can be squeezed only so far.
So, NO, private investment that requires a return (via tolls) won’t work either.
45
Furthermore from Wikapedia...
"In 2007, the Portuguese company BRISA paid $603 million to operate the road for the following 99 years[2][3] The lease included a clause restricting a "Competing Transportation Facility."
Talk about a killer deal for the rest of us!
1
If you think "public private partnerships" are a good idea have a look at what just happened in the UK with Carillion. That's what happens when government ducks its responsibility and turns common property over to corporations whose main business is to make a profit, not to deliver services and functioning facilities:
https://www.nytimes.com/2018/01/15/world/europe/carillion-bankruptcy-out...
110
Carillion: Poster child for privatization of public services. Republicans think it's great!
2
Terrific example, the failures of privatization in Britain should make us think harder.
2
This infrastructure thing would be a lot easier to do if Trump and the Republicans would stop slashing taxes on the super rich, stop pumping so much money into the military, stop a couple of never ending wars, put everyone on Medicare, fund the schools, close corporate loopholes and bring the undocumented immigrants out of the shadows and have them fully participate in the tax system.
But hey, if they did that they wouldn't be Republicans and our infrastructure wouldn't be falling apart.
602
Vote Democratic in November; your odds are much better in seeing something closer to the world you describe. (And maybe a new bridge, highway or railroad!)
13
Speaking of participating in the tax system -- your list might include a transaction tax on Wall Street. Why, we, the peeps pay sales tax. Should Wall Street be exempt?
How's 30 cents per $1,000 sound? Excessive? Worse than the Crash of Ought Seven? (buh-bye Trillion$!)
We're talking around $350 billion we're leaving on the table.
Coincidentally $1.5 trillion is approximately the amount that was just given away by the government to mostly already high income people. If only this US government thought of the working people first instead of their wealthy campaign contributors/bosses.
467
But they really wanted to bust the debt situation so they'd have an excuse to steal your and my savings we put into Medicare and Social Security. That insurance money we paid, they call that "entitlements" and they want to loot 'em. If they can get our debt bad enough, they think they can steal that too.
105
1.5 trillion given out in tax breaks that will allow those that got the tax breaks to invest in infrastructure with either a guaranteed profit or ownership of said infrastructure. And the private investors would be able to pick and chose which projects would be deemed necessary, or better, which projects would be profitable to them rather than rather than good for the general welfare of the country.
5
The wealthy own the GOP.
$ 1.5 T is just a return on investment. It had to come from somewhere.
Trickle down?
That lie has worked well for over 30 years.
1
You can privatize infrastructure. The railroads were built with incentivizing privatization. The Nation's Capital was created by offering paper lots to landowner for the donation of portions of Virginia and Maryland.
2
Yes, you can. But you should also recall the history of privately created infrastructure. Bad. Very Bad.
1) California and many other western states have Referendum and Initiative written into their state constitutions to wrest power from the railroads.
2) The Grange movement existed because small farmers found monopoly pricing by railroads made it impossible to profit from their crops.
15
Your examples are all over a century old. Things have changed, my friend.
Let me ask you a question. Do you use water from the tap, flush the toilet, walk on sidewalks or drive on roads, use the beach, or visit parks? I bet you answer yes to almost all of these. They're all almost always public infrastructure in America, and all developed countries.
We all need, use and enjoy them. Let's commit to having our governments build and maintain them properly.
16
The transcontinentals also went into receivership multiple times over the late nineteenth century. They were terrible investments that were built too early, before there was any market demand through the land they traversed, and they were managed criminally. Railroad owners, however, who were not financially liable for their corporations' debts, made millions.
7
"...The answer is, basically, that it doesn’t. Private investors won’t spend on public infrastructure unless guaranteed a return...
Uuuh, Paul - do you understand the difference between debt and equity financing...
These projects have been financed like - forever - using debt...
It's because the public sector has managed the money so poorly, that some of the debt has defaulted - and much more is at risk - that investors are now seeking an upside...
Bluntly, I don't like the idea that much...
But, I like the inept and corrupt politicians that got us into this mess even less...
4
Here is my question to you Paul. Would you honestly expect most infrastructure bills proposed today to not be a scam? Today, if we wanted any large public programs, we would first need to be wise and reduce our spending elsewhere, such as in our defense. Next, you would need to actually provide funding in the forms of direct spending and grants for infrastructure based projects amounting to at least 1 trillion USD. Which mainstream politician is willing to be rational and propose those two things? Bernie Sanders mentioned it, but was quickly attacked by this very paper for proposing such 'radical' ideas.
Paul Krugman, with your expertise in economics, why don't you propose a solution?
6
The solution is obvious! Restore progressive income taxation. To get there, get rid of Republican politicians.
4
"The solution is obvious!" is a quotation. I'll bet PK would recognize it right away.
Remind me to avoid the latest "improved" roads and bridges. I am a rebel.
4
We have the Massachusetts Turnpike(“The Pike”) here. It was built as a toll road to pay off the bonds. Every time we get close to paying the dang thing off, some update or debt transfer occurs to keep us paying and paying and paying.
You think bridge fees are bad in NY, imagine this everywhere you turn. It’ll be the Middle Ages again where every toad is highway robbery!
13
Paul, Use your imagination. The Koch Brothers, McConnell's Taiwanese billionaire father-in-law, Ryan's heiress wife, Trump's extended family including adopted brother Steve Schwartzman, and all the rest surely are. They can see putting a sensor on my toilet and charging me per flush; EZ pass on steroids can charge me for every mile I travel on local roads now owned by a tycoon; parks newly privatized can charge for a day hike or for just soaking in some rays. It's a brave new world out there if you have a few billion to buy up what used to be the public domain.
193
We've seen how the public-private partnerships work, many times. First, the private company gets handed valuable public property for a fraction of its actual value. At that point, either the private company exercises its monopoly power to extract large sums of money from us - or (as many toll road operators have demonstrated) they go bankrupt, and stick the rest of us with the bills.
Consider Chicago's deal to lease their parking meters to a private company. The company's making huge sums of money on taxpayer-built infrastructure.
It's a variation on the famous "I'll be gone, you'll be gone" philosophy that lead to the 2008 Great Recession: just as derivative brokers knew that they'd cash their big bonus checks and get out before the whole thing crashed, politicians in a budget crunch know that they'll be term-limited out before the short-term cash they made selling off public utilities runs out. In both cases, it's we, the people, who get the short end of the stick.
Sadly, there are many voters who would rather pay $100.month for water from a private company than $20/month from a (gasp) publicly-owned utility.
221
Perfectly said - I don't know why this wasn't tagged as an NYT Pick. I'm in the professional services industry (transportation engineering) and I've been watching the growth of PPP for years now with growing apprehension. What you say about public officials hits the nail on the head - whoever's in office now logs a win - - the ruinous cost of this 'win' will be associated with his or her successor. Just a quick look at the ruinous deals governments have struck with corporations to locate in their state (why doesn't anyone ever make the promised jobs a mandatory requirement and make the corporation give money back if they don't hire as many people as the promised?) should give us enough evidence that elected officials are not equipped to negotiate a fair deal for the public with big business.
The Chicago parking meter debacle is a perfect case in point. They're stuck with that deal for 75 years, thanks to the ridiculous lease they signed.
When Trumps says "public-private partnership" consider Saudi foreign investments. In the future it could mean that every time you drive on a toll road, part of the money would go into Saudi pockets. What a nice replacement for petroleum revenues.
96
Congress will never approve the $1.5 trillion necessary for the baseline of a national infrastructure replace/repair project. Without raising taxes significantly, there is no way that anything needful will be done to remove us from the early 20th century.
What Congress *will* do is begin to unstitch the New Deal and the social safety net. Now that they have their permanent tax reductions and tax loopholes, you know, the bennies they were sent to Washington to secure for the one percent, they will worry and fret and then declare that the huge deficit that they have bequeathed to the rest of America will have to be fervently addressed. And that, my fellow Americans, will be the beginning of the end.
"Rusted bridges," smirked the "president?" How about the ballast and the wooden ties under the worn railroad tracks that will, one day soon, send heavy payloads of passengers and products off the rails? What about the aging system of runways at airports that were build 70 and 80 years ago? Where will the room for runway expansion and terminal modernization come from? Answer: from the increased taxes on the "middle class" that the daylight holdup that is the 2017 Jobs and Tax Act perpetrated.
And what about outdated electric grids? What about internet service? And, of course, roads and streets and waterways? The rich will be counting out their money, like Old King Cole, when the bill for living in a bygone era comes due.
274
sorry but the number is 4.6 trillion
1
YES! And especially, what about Internet service for students and communities!
1
Agreed. I won't forget the St. Paul bridge and the following years of republican obstructionism against Obama's infrastructure plan.
4
The U.S.A. is becoming North America's first banana republic. The pigs at the public trough can then donate to politicians' campaigns and get more feed later. Amazing how legal bribery works at the federal level for the wealthy but no where else for anyone else. I have confidence that soon enough, the wealthy will do that too.
43
I'm afraid America will have to start at the root cause and reestablish the principle of "one man one vote", which is clearly being violated when one millionaire donates money to swing thousands of voters.
7
Yes, Richard Kroll--let's overturn Citizens United and all the other Supreme Court decisions going back decades that have gutted campaign finance laws.
The spending of money does not equal free speech.
5
I reiterate.........the Hoods are Robin' America.
118
"The rest (of the money for rebuilding our infrastructure) is supposed to be induced spending from private investors. That’s quite a trick. How does it work?"
It comes from this thing called "taxes".
In a normal world nations invest in rebuilding their infrastructure using tax dollars. But it looks like we've given those dollars away to the wealthy and to corporations.
Corroding steel bridges don't care if, or when, they are rebuilt. Steel will continue to corrode - and left as is, we will eventually see collapses - and then Trump can blame Obama. According to the American Society of Civil Engineers, there are more than 69,000 structurally deficient bridges in the U.S. Think about that the next time you're driving over (or under) a bridge.
59
The wealthiest Americans seem to think that as long as they have an electric generator to power their McMansions, they need not be concerned with infrastructure.
79
Well … I suppose that Paul needs to offer SOME kind of lifeline to Democrats who are about to see Trump’s approval numbers approach 50% for the first time, and as a consequence return to the monumental depression they felt when they awoke on 9 November, 2016.
His speech KILLED. He must have worked harder on this performance than any other single effort in the past year, and it will have its effects on his base as well as moderates on BOTH sides of the ideological divide.
“Trumpfrastructure?” Private participation? What, exactly, did Paul expect from someone elected as a Republican? That the feds were going to print money to rebuild America’s bridges and tunnels? Guess again.
However it’s accomplished, $1.5 trillion isn’t chicken-feed.
2
Yes, what DID Paul expect? Republicans won't spend money on anything but the military. (Our CEOs need to protect their foreign investments after all. Also, at the rate it's going the PDRK's nuclear arsenal may just about challenge our own by the year 4000.) I will, however, make sure to save Richard's comment for later reference. "Trump's approval numbers (will) approach 50%." Is he planning to commit suicide?
19
Trump's approval numbers approach 50%? I think it's closer to the high 30's, which means it's really stretching to whisper at 40%. You could also say two thirds of America disapprove of Trump.
Please do send us a postcard from Fantasyland, Richard.
23
"The third pillar ends the visa lottery — a program that randomly hands out green cards without any regard for skill, merit, or the safety of our people."
Apparently it takes practice to lie like that.
11
Re ".. just having the government build the thing." Keep in mind that the government does this by financing and contracting the project; the construction, technical firms doing the work are still private and employ many citizens in the private sector.
2
But when the project is finished, the public owns it, not the contractors.
160
All true enough, as it should be. The problem comes when it's mostly done with private money with tax break incentives and collecting tolls into perpetuity. Arlington, VA finally gave into hot lanes as long as a percentage of proceeds collected within the beltway went to secondary road projects and not all to private companies.
16