Trump Proposes $1.5T in Infrastructure Spending: How Much Is Needed?

In his State of the Union address, president trump laid out a proposal for infrastructure spending. Details were scant.

"Tonight I am calling on Congress to produce a bill that will generate at least $1.5 trillion for the new infrastructure investment that our country so desperately needs. Every federal dollar should be leveraged by partnering with state and local governments, and where appropriate, tapping into private sector investment to permanently fix the infrastructure deficit. And we can do it."

Lovely. How much is really needed?

Here are two estimates from a Reuters recap on Trump's Infrastructure Spending Proposal.

  • McKinsey & Company researchers say that $150 billion a year will be required between now and 2030, or about $1.8 trillion in total, to fix all the country’s infrastructure needs.
  • The American Society of Civil Engineers, a lobbying group with an interest in infrastructure spending, puts it at $2 trillion over 10 years.

Details Scant

Where is the money coming from? What percentage is from state budgets?

Trump did not say.

  • State budgets must be balanced so state spending will require tax increases.
  • Public-private partnerships tend to be boondoggles or giveaways to political cronies.
  • Estimates tend to be low, especially when public unions are involved.

Synopsis

  • US debt is spiraling out of control.
  • Trump added $1.5 trillion to deficits with corporate tax cuts.
  • Trump wants to add another $1.5 trillion from somewhere without precisely stating where.
  • The US dollar is sinking.
  • Interest rates are rising.
  • The stock market is in a bubble.

Repeat after me. This does not matter because (make up any reason you want but this is a common one) we owe it to ourselves.

Here is another idea: Deficits only matter when Democrats are in charge.

Mike "Mish"Shedlock

Comments
No. 1-22
Kinuachdrach
Kinuachdrach

Trader_0; "... both wind and solar generation have recently become cheaper than coal and mostly everything else ...". I will believe that when Democrat politicians start whining about Big Wind & Big Sun, and demand an end to direct & indirect subsidies and start imposing taxes on those boondoggles. But my big beef is not with the misuse of tax-payer money, it is with the legally-protected destruction of rare bird life, especially migrating raptors. Kill a bald eagle with a gun, and you are in deep doo-doo; kill a bald eagle with a subsidized bird whacker, and you are untouchable. Makes absolutely no sense, except to our Political Class.

Escierto
Escierto

Yeah, let's start building bridges to nowhere. I think this has been done already but hey: I'm turning Japanese
I think I'm turning Japanese
I really think so

Kinuachdrach
Kinuachdrach

Sechel: "We'll also see a great deal of mal-investment ..." We have been seeing a lot of mal-investment over the last decade. Just think about the thousands of bird-whackers littering the landscape from California to West Texas to Eastern Canada, unreliably generating electric power and reliably generating subsidies from taxpayers. Or think about the teenage girls who are collectively running up $Billions in debt for worthless college degrees. Or think about California's still-incomplete expensive bullet train to nowhere. If we can find a way to redirect those kinds of mal-investments into productive value-adding infrastructure, we would be ahead of the game. Unfortunately, that would require the Political Class to get out of the tax & subsidize business, and to cease money-printing & let interest rates rise.

DBG8489
DBG8489

No government ever starts spending on something when "the market is tanking" and then later stops and starts "saving".

They spend and the programs they spend on become fiefdoms for someone somewhere and any cut to that program is considered a direct attack on those who benefit.

It isn't the job of a government to control the economy or make winner/loser decisions in a market. A government exists to secure the rights of its citizens and mediate disputes. Give a government the power to control a market and you give those who have the ability to bribe that government the ability to control that market.

Stories