There is no question that the nation needs to put more money into its crumbling infrastructure. The American Society of Civil Engineers (ASCE) estimated in 2017 that the U.S. needed to invest about $2 trillion just to bring the current infrastructure back up to satisfactory condition (ie – bridges aren’t falling down). Economists have estimated that every dollar invested in infrastructure adds about $3 to the nation’s GDP, so it is a good investment.
The Trump administration made a lot of promises about this, but in effect didn’t do much if anything. So it is promising that the Biden administration is proposing to do something meaningful about infrastructure. The problem is that this isn’t really an infrastructure bill – it is a massive liberal wish list pasted onto a token infrastructure investment to give it political cover.
The bill totals about $2 trillion, about what the ASCE estimated would be needed just to bring our current infrastructure up to par. But in fact only about half of this bill is really about infrastructure.
Here is how it breaks down in the current proposal:
· $621 billion for transportation (roads, bridges, ports, airports, trains)
· $111 billion for water (replace lead pipes, improve drinking water quality)
· $200 billion for broadband and electric power improvements
For a total of $932 billion in real infrastructure improvement
Another $764 billion goes for housing, education, child care facilities, and the like, with a final $180 billion for research and development.
I’m all for the investment in infrastructure (though some of the efforts proposed, like re-activating the wildly-expensive California high-speed rail project, are highly questionable). And certainly some of the non-infrastructure items are worth talking about, though it is not clear that these should be the federal government’s responsibility, especially if they are being funded with yet more federal debt.
And that brings up the question of just how this will be funded. Biden proposes to fund it by taxing corporations and the rich more. Lots of luck with that! Big corporations can afford to hire masses of lawyers and accountants to find every legal loophole that a compliant Congress has given them over the decades in return for their campaign contributions, which is why many of the largest corporation (Nike, Amazon, Hewlett Packard, FedEx, etc) pay no taxes at all, whatever the corporate tax rate is supposed to be. And the really wealthy do the same.
So in the end, whatever the promises made, this will no doubt be funded by yet more federal deficit. It might make sense to fund the real infrastructure portion with federal debt, despite the risks of pushing the already massive debt yet higher. But funding the rest of the liberal wish-list with debt? That seems imprudent, though no doubt politically popular.
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