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One of Hillary Clinton’s campaign proposals is for additional infrastructure spending to the tune of $250 billion over five years. According to the Clinton campaign, this program would be paid for by “business tax reform. It’s not clear what “business tax reform” entails, but it sounds to me like higher taxes on corporations and high income earners. Clinton claims this would create tens of thousands of jobs, stimulate the economy and fix a failing infrastructure.
Anyone who’s been paying attention during the Obama years should not be surprised by this proposal. It has been a recurring theme throughout his term in office. Infrastructure spending was a major component of the 2009 Stimulus Bill accounting for $105 billion of “shovel-ready” public works projects in the approximately $900 stimulus package. Obama and congressional Democrats have continued to call for additional infrastructure spending as a stimulus despite the fact that the 2009 stimulus failed in its stated goals of 1) keeping the unemployment rate below 8% (I believe it peaked at a tick above 10%), and 2) in providing economic stimulus (GDP growth has bounced around between 1% and 2% through the Obama years). Even Obama eventually did admit that there were no “shovel-ready” projects.
You would think this would be an easy issue for the Republican presidential candidate to oppose by noting the historical failures of public works projects in stimulating economic growth, and the need to get our fiscal house in order what with the federal government debt over $19 trillion and rising and annual deficits of hundreds of billions that will only rise without major reforms of our entitlement programs. However, you would be wrong. Republican presidential hopeful Donald J. Trump has called Clinton’s proposal “a fraction of what we need” and has at various times called for either doubling or quadrupling of Clinton’s proposal to either a $500 billion or a $1 trillion infrastructure plan. Trump would pay for this massive spending increase by borrowing via the selling of bonds, stating in his usual blustering fashion “We’ll get a fund, we’ll make a phenomenal deal with low interest rates and rebuild our infrastructure.”
Trump, like Clinton, claims the nation’s crumbling infrastructure demands a large infrastructure investment program. In making this argument, Clinton cites the most recent American Society of Civil Engineers (ASCE) Infrastructure Report Card. Whether Trump has ever heard of the ASCE Report Card is unknown, but he too claims our infrastructure is in a state of disrepair. I’ve had issues with the ASCE Report Card since the first one was issued in 1988 and I discussed those issues here. Basically, the grade criteria set by ASCE will result in grades clustered around C for any mature nation with a well-developed infrastructure.
Trump, like Clinton, also asserts that increased levels of infrastructure spending will lead to economic stimulus. Trump told the New York Times in a phone interview that borrowing and spending would help lift economic growth. “It’s called priming the pump,” Mr Trump told the Times. “Sometimes you have to do that a little bit to get things growing. We have no choice — otherwise, we are going to die on the vine.” On this, Trump sounds like the liberal Democrat he has been his whole adult life until a few months ago. I would bet that if you showed or explained each candidate’s proposal to Paul Krugman in a blind test he would pick Trump’s plan in a New York minute. And, hey, whats not to like? More spending and more debt — that’ll get any economy humming in no time!
It seems like almost every day, in one way or another, the Republican party with Donald Trump as its standard-bearer inches further and further left.