America’s infrastructure is horrible! I’m not gonna sit here and tell you that our roads and bridges and airports are just fine. Trust me, they’re not. This year, our infrastructure received a grade of D+. We have potholes, sinkholes, dried up canals, impassable bridges, buses that never arrive on time, floods in subway tunnels and trains that break down a lot. In fact, our overall grade on the 2017 Infrastructure Report Card is a D+. That’s really disgusting. Interestingly, railroads earned a B, but the rest of our infrastructure didn’t score higher than a C+. Buses earned a D-, which is obvious to anyone who rides, or tries to ride, the bus to work in the morning.
Now, Trump says he can fix all this. He’s promised 5-6% GDP and millions upon millions of jobs. He even knows which 50 projects he wants to start with. He’s got it all figured out. He wants to roll back regulations, privatize everything he can, and give tax breaks left and right. The only thing he apparently doesn’t know is the details. Or the numbers. Or reality. At all.
I mean, who could blame him, though? His businesses went bankrupt SIX times so maybe he doesn’t know what he’s doing. Maybe he should just look for one of those millions of jobs he’s promising instead of trying to manage more than he can handle.
Let’s start with this image from Trump’s actual 50-point plan.
How many “long-term” jobs do you see? I don’t see any.
I know that’s probably just an oversight but a major one for someone who has proven he hates any and all forms of oversight!
He’s proposing more than $200 billion in federal spending, getting another $800 billion from the states and the private sector, and his own report that is supposed to prove he’s an absolute genius is missing the most important detail.
Literally everyone has confirmed that 5-6% is impossible and far outside any margin of error of any analysis undertaken by anyone. So, moving on!
It’s more important to determine what he’s going to do and how that’s going to affect all of us.
There are three ways he can go about implementing his infrastructure plan. He can use policy, funding, privatization. He’ll most likely use a combination of all three. That means the federal government, state governments, and also city and municipal governments need to draft legislation to move these projects forward. We need to be absolutely sure we know how much it costs. Finally, we could just forget all that and let the private sector handle it, ya know, cuz that’s always worked out so well in the past. Seriously, Trump. C’mon.
There are number of different policy decisions Trump can make.
He’s strongly in favor of deregulation. He’d like to strip away regulations on worker safety, environmental protection, assurances that companies can actually complete projects they start.
He can also engage in public-private partnerships, which is probably the #1 buzzword in the federal budget world these days. That word has actually been trending for half a decade now. But what does it mean? Well, in short, the federal government shares the costs with corporations. More and more often now, part of the deal has been that corporations end up owning long stretches of roads and highways they’ve worked to construct, repair, and modernize.
A very popular method that Trump will almost certainly use is to shift the costs to the states. While Senators like Rand Paul and others are using this as a way to talk about the benefits of small government, the truth is it wouldn’t be any smaller but just shifted to the state-level.
The last policy idea can be implemented alongside the above proposals. Trump has talked about red tape for years. He’s also made it clear that he hates the environment and doesn’t even care about the workers that have built his own buildings. A major decision that he’s talked about and that he’ll likely make is to get rid of environmental and safety regulations.
So how does Trump plan on paying for this $1TRILLION dollar project. Well, he’s talked about how the federal government would pay about $200 billion, but he keeps changing that number. He’s also said the private sector will pay the other $800 billion, but he’s also said the states will pay. So he’s obviously very fuzzy on the details.
However, he has been very clear on one thing. He plans to incentivize infrastructure companies by giving them tax breaks as long as they spend their tax savings on repairing public roads, bridges, waterways, trains, airports, etc.
Since he’s talking about having the states fund their own infrastructure projects, he can shift more of the $200 billion to them or make the states pay for whatever money he can’t find in the private sector.
Another simple way to fund these projects is through privatization. He can simply sell or give away our public infrastructure, say it’s no longer his problem, and give the private sector the right to own our airports, toll roads, and even our shipping ports. This would still allow these companies to seek government funding, but the government wouldn’t be required to do spend money on these facilities or their operations.
This last option is like a policy that states you’re not going to write policies anymore.
While privatization causes many issues, there are four that are critically important. Regarding infrastructure in particular, national security is a clear concern. Trump wants to privatize air traffic control and let private equity firms own and operate our airports independent of the government. That means that any plane in the air is monitored by a private company and is guided on and off the tarmac by perhaps the same private company. Therefore, the military and any number of national security agencies wouldn’t be able to seamlessly take over operations during a national crisis. They likely wouldn’t even know the password to login to the main computers in the air traffic control towers.
Another issue with privatization is that corporations are only motivated by profit. They’re designed that way and are even mandated to continue operating that way, as this is their fiduciary duty to their shareholders. With privatization, they can and have already started to charge whatever tolls they want on highways. I-395 in D.C. has dynamic pricing that is typically above $10 per toll during rush hour, and I’ve seen it above $30. The Pennsylvania Turnpike is private and charges more than $20, or you could spend about 30% more time on the road taking alternate routes, and they charge high prices because they know you don’t want to do that.
There’d also be a lack of communication among corporations and the government. Obviously. They hate each other. So it’s really a bad idea to give away our critical infrastructure to someone who only in it for the benefits and wants the government to handle all the liabilities even though they’ll claim there are privacy concerns that prevent them from even telling the government what those liabilities are and how significant they are. Given that they’re not going to communicate and that it’d be nearly impossible to do so because they’d be using completely different technology, it makes it very clear that privatization of critical infrastructure is a very bad idea.
Finally, these corporations aren’t politicians. They are beholden to shareholders, not voters. They don’t have to worry about whether they’ll get reelected because they raised taxes to repair roads, airports, or even do something good like clean up rivers. They can just raise the price of tolls, ferries, landing fees and gate fees that get built into airline ticket prices, and so on.
There are no term limits on corporations. They can last forever. And they were never elected in the first place.
So, what are the effects of all this?
First of all, Trump’s policies on deregulation are going to put workers at risk. He’s also going to destroy the environment, which seems to be a plan he’d like to attack head on from every angle. He’s going to allow corporations to regulate themselves, making sure they pay their workers enough and keep them safe, and he’s going to allow corporations to charge whatever prices they want on toll roads even when there are no other suitable routes home or to your job.
He’s also going to shift the burden to the states, which is why I put together this quick chart to explain that the states most in need of infrastructure improvements are the same ones that have literally no ability to pay for it. If they even do find a way, these states don’t even contribute that much to the nation’s overall productivity. Trump says he’ll increase GDP by 5-6% EACH YEAR?!
Vermont, Maine, and maybe even New Hampshire can afford their desperately needed infrastructure projects, but they contribute less than one perfect to US GDP! So that investment isn’t going to get us anywhere. Rhode Island doesn’t contribute anything either, but they can’t afford it anyway. Hawaii can afford it, but their GDP ranks near the bottom, as well. The remaining five states contribute significantly to US GDP, but four of them are broke! I don’t think Maryland can carry all 50 states. Fun fact: Maryland has the most millionaires per capita. I’m guessing they don’t wanna pay.
Additionally, most of these states vote Democratic in almost every Presidential election. Six out of the ten governors are Republicans, but I think Trump would have to make major concessions to get them to pay, especially when they don’t have any money. Since he’s not going to want to do that, I don’t see how it’s going to happen.
Some benefits of Trump’s infrastructure plan include quicker transportation of goods, which increases GDP, modernization of critical infrastructure, which will increase efficiency. His plan will also include better technology, which will benefit national security and also increase efficiency at ports that process critical levels of international trade. That doesn’t mean we’ll actually be able to use those ports for more business, whether exports or imports, but efficiency increases capacity. If there’s more demand, then at least our ports will be able to handle it.
However, I don’t know where the demand is going to come from because the benefits to the people are nonmonetary. In other words, you can have really efficient airports and trade ports and railroads, but if no one has any money to buy products that get shipped to the United States, put on trucks and trains, and delivered to stores even really efficiently, then no one’s going to buy those products. That means the consumer economy stops, and that’s the largest part of the GDP equation. The math simply doesn’t add up to 5-6% or even half that.
I want to point out, however, that we will benefit pretty nicely in other nonmonetary ways, though. We’ll have smoother roads, better commutes along rail and subway lines, fewer maintenance issues on our cars, and safer streets for our kids. We’ll also have way more constructions vehicles erasing that smooth ride and shorter commute, but in the long run, that’ll be worth it, as long as private enterprise doesn’t cut corners and make other mistakes regulations and oversights were put in place to prevent. We obviously can’t trust them to do the right thing, but we’ll still have some pretty nice bridges and other structures, which does lift national pride.
The major issue is that Trump claims the economy is going to improve but the costs are going to kicked down to the consumers who generate GDP. Therefore, this plan will not revitalize the economy or do anything else Trump says it’s going to do. Wherever these improvements take place, the federal government will kick the costs down to the state level, and the states will pass it along to us, which takes away the ability for some of us to even afford using the improvements. Most people can’t afford to improve our infrastructure and still have money left over for tolls, higher airline prices, or even a car to get to work.
It looks like we could see structures rising up all around us that we can’t even afford to use but have to pay for anyway.
The money has to come from somewhere, which means he’ll be chipping away at that 5-6% until he arrives at what most economists believe won’t even be 3%, assuming nothing else goes wrong, like a major decline in the stock market because he’s allowing investment banks to start taking excessive risk again or like people being too sick to be productive at work or even go to work at all because they have no healthcare. I’m betting on 2.5%.
So what can we do?
Well, privatization is a major issue, and Congress has to vote on that. Therefore, you can call your Congressperson and tell them that you’re not going to vote for their reelection if they let Trump privatize our infrastructure, giving your Congressperson no ability to provide check against corporate profit maximization. Demand that they maintain oversight on worker safety. Make the federal government require that the states provide actual plan on how they’re going to raise money for these projects and how they’re going to complete them so that we’re not left with roads that unfinished or even more impassable than they are now.
Demand that your local communities hold meetings, not townhalls with giant microphones and TV cameras, but actual interaction with local officials and anyone else involved in these projects. Tell them your concerns, and don’t let them implement their plans until they’ve made changes so that you don’t get hurt, go broke, or get left behind.
By the way, these meetings can also function as job fairs after everyone knows and agrees to the plans. It’s really not that hard!
Most of all, remember that this is your country, those are your streets, and what happens in your town IS your business. Don’t let them make changes to your town or your city until you know what’s going on and they’ve given you a chance to speak with them about it.