The indefatigable Paul Krugman takes a closer look at Trump's proposed infrastructure funding plans in his column for The New York Times, wondering why the President-elect would seek private equity for public projects. Is this a profiteering scheme that sneakily privatizes ownership of traditionally publicly accessible resources (like water, for example)?
As Krugman notes about Trump's plan: "Crucially, it’s not a plan to borrow $1 trillion and spend it on much-needed projects — which would be the straightforward, obvious thing to do. It is, instead, supposed to involve having private investors do the work both of raising money and building the projects — with the aid of a huge tax credit that gives them back 82% of the equity they put in. To compensate for the small sliver of additional equity and the interest on their borrowing, the private investors then have to somehow make profits on the assets they end up owning."
For more on how architects are reacting to the Presidential election:
11 Comments
Patrik Schumacher's wet dream.
You people better figure out another route to grandma's house for Christmas, because grandma will get run over by a lot more than just a reindeer.
if raising taxes is the new political taboo, and additional debt, however cheap, is equally distasteful, then i see no other option
many other countries successfully leverage private spending for public infrastructure projects. The USA only invests ~4% of GDP into infrastructure, and only 1% of our projects are funded with public/private funding. GB, for example, funds about 10% of their projects with public/private partnerships.
there's plenty of private money looking for a home. durable goods like housing and infrastructure is the hot post recession investment banking commodity
Krugman doesn't know what he is talking about. (What's happened to this guy in the last year?) Public/private partnerships happen all the time. There are existing federal programs such as Transportation Alternatives, and TIGER that already require or prioritize projects with private matching funds. I think the real danger of a Trump administration is that "alternative" forms of transportation such as transit or non-motorized may be cut, but I'm still waiting to see how that shakes out.
krugman didn't change won. it just seems like he did because the dialogue around him turned into support for the far-right/ alt-right.
Uhh? Wasn't this originally Clintons idea?
Every affordable housing project that uses LIHTC is a public private partnership. That's been going on for decades... what's the difference?
Yup, jla, it was Clinton's idea. Donald Duck and his uneducated, uninformed supporters are essentially stealing it.
when reagan pushed to privatize more prisons, do you really think that helped the american people? they get paid to put heads in beds. justice is secondary.
smh. i'm just waiting for brawndo to buy the FDA and the FCC. it's the thirst mutilator. it's got what plants crave.
If I were president my first move would be to ban all privatized prisons. If interested, Watch 13th on Netflix....also see Vice doc on debtors prisons...infuriating
Toll roads are not the main thing we need right now; what about sewage systems, making up for deferred maintenance, and so on?
So we're just ignoring this point and focusing on public-private partnerships in what's likely the least necessary area of investment: New highways and new buildings.
The very reason for government spending is for programs that are unlikely to be profitable but likely to increase the quality of citizen's life. Is there any legitimate argument in favor of non-public investment other than someone stands to make a profit off the people that the government would forego?
i don't follow this that closely, but is it leaning towards private partnerships for water and sewer too?
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