The Great Infrastructure Scam of 2018

Here's some infrastructure work near my house. There's a lot of it going on right now! You may be wondering how we manage to fund this, so here's how we did it. First, the state of California raised its gas tax by 12 cents per gallon to raise $34 billion for new construction projects. Second, Orange County raised its sales tax by half a cent in 1990, and then renewed it in 2006 to pay for an additional $13 billion in local projects. Third, the neighborhood I live in is currently repaving all its streets and building new curb cuts for the disabled. The money for this comes from association dues. All three of these have one thing in common: they tax residents in order to raise actual money to pay for infrastructure improvements. This is how adults do it.Photo by Kevin Drum

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So. Donald Trump’s $1.5 trillion infrastructure plan. As near as I can tell, here’s the skinny:

  • It’s really more like a $1 trillion plan.
  • States are expected to put up $800 billion.
  • The federal government will put up $200 billion.
  • But the money will be taken from other projects.

In other words:

  • Net new spending from the federal government will be zero.
  • The incentives to states will be far too small to prompt any truly new development—though I have no doubt that states will compete ferociously to get federal money for projects they were going to do anyway.
  • The private sector will get involved only if they can make money via tolls, use fees, etc. That is to say, taxes.

In yet other words:

  • There is nothing there. There will be no new publicly-funded infrastructure.

Would anybody care to tell me if I’m missing anything here?


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Clara Jeffery, Editor-in-Chief

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