By Jose Borbon
In a report from October 27th, University of California–Irvine professor Peter Navarro and private equity honcho Wilbur Ross – two of Donald Trump’s chief economic advisers – outlined the candidate’s plan to privatize new infrastructure development.
According to the advisers, one of the goals is to transform around $167 billion of federal tax credits into $1 trillion of infrastructure spending. Also, according to them, the plan will be “budget neutral” and cost zero to the taxpayers.
The plan would require the federal government to offer tax credits to private investors interested in funding large infrastructure projects, these tax credits are designed so companies would be able to charge less in fees. The investors will be expected to put down some of their own money up front, and then borrow the rest from the private bond markets. The profits for the investors would come from usage fees, such as highway and bridge tolls.
According to them, one of the benefits of a plan like this would be that the States wouldn’t have to add any bonds to their books and the federal government wouldn’t have to add much to its debt.
Although there is already a federal government program offering credits to investors, that program is designed to help states and cities team up with private-sector investors, but Trump’s plan seems to be targeted at fully private projects.
One of Trump’s biggest talking points during this campaign has been “America’s collapsing bridges and third-world airports”, and he has repeatedly stated that he would double Hillary Clinton’s proposed spending on infrastructure.