There are three ways he can go about implementing his infrastructure plan. He can use policy, funding, privatization. He’ll most likely use a combination of all three. That means the federal government, state governments, and also city and municipal governments need to draft legislation to move these projects forward. We need to be absolutely sure we know how much it costs. Finally, we could just forget all that and let the private sector handle it, ya know, cuz that’s always worked out so well in the past. Seriously, Trump. C’mon.
There are number of different policy decisions Trump can make.
He’s strongly in favor of deregulation. He’d like to strip away regulations on worker safety, environmental protection, assurances that companies can actually complete projects they start.
He can also engage in public-private partnerships, which is probably the #1 buzzword in the federal budget world these days. That word has actually been trending for half a decade now. But what does it mean? Well, in short, the federal government shares the costs with corporations. More and more often now, part of the deal has been that corporations end up owning long stretches of roads and highways they’ve worked to construct, repair, and modernize.
A very popular method that Trump will almost certainly use is to shift the costs to the states. While Senators like Rand Paul and others are using this as a way to talk about the benefits of small government, the truth is it wouldn’t be any smaller but just shifted to the state-level.
The last policy idea can be implemented alongside the above proposals. Trump has talked about red tape for years. He’s also made it clear that he hates the environment and doesn’t even care about the workers that have built his own buildings. A major decision that he’s talked about and that he’ll likely make is to get rid of environmental and safety regulations.
So how does Trump plan on paying for this $1TRILLION dollar project. Well, he’s talked about how the federal government would pay about $200 billion, but he keeps changing that number. He’s also said the private sector will pay the other $800 billion, but he’s also said the states will pay. So he’s obviously very fuzzy on the details.
However, he has been very clear on one thing. He plans to incentivize infrastructure companies by giving them tax breaks as long as they spend their tax savings on repairing public roads, bridges, waterways, trains, airports, etc.
Since he’s talking about having the states fund their own infrastructure projects, he can shift more of the $200 billion to them or make the states pay for whatever money he can’t find in the private sector.
Another simple way to fund these projects is through privatization. He can simply sell or give away our public infrastructure, say it’s no longer his problem, and give the private sector the right to own our airports, toll roads, and even our shipping ports. This would still allow these companies to seek government funding, but the government wouldn’t be required to do spend money on these facilities or their operations.
This last option is like a policy that states you’re not going to write policies anymore.
While privatization causes many issues, there are four that are critically important. Regarding infrastructure in particular, national security is a clear concern. Trump wants to privatize air traffic control and let private equity firms own and operate our airports independent of the government. That means that any plane in the air is monitored by a private company and is guided on and off the tarmac by perhaps the same private company. Therefore, the military and any number of national security agencies wouldn’t be able to seamlessly take over operations during a national crisis. They likely wouldn’t even know the password to login to the main computers in the air traffic control towers.
Another issue with privatization is that corporations are only motivated by profit. They’re designed that way and are even mandated to continue operating that way, as this is their fiduciary duty to their shareholders. With privatization, they can and have already started to charge whatever tolls they want on highways. I-395 in D.C. has dynamic pricing that is typically above $10 per toll during rush hour, and I’ve seen it above $30. The Pennsylvania Turnpike is private and charges more than $20, or you could spend about 30% more time on the road taking alternate routes, and they charge high prices because they know you don’t want to do that.
There’d also be a lack of communication among corporations and the government. Obviously. They hate each other. So it’s really a bad idea to give away our critical infrastructure to someone who only in it for the benefits and wants the government to handle all the liabilities even though they’ll claim there are privacy concerns that prevent them from even telling the government what those liabilities are and how significant they are. Given that they’re not going to communicate and that it’d be nearly impossible to do so because they’d be using completely different technology, it makes it very clear that privatization of critical infrastructure is a very bad idea.
Finally, these corporations aren’t politicians. They are beholden to shareholders, not voters. They don’t have to worry about whether they’ll get reelected because they raised taxes to repair roads, airports, or even do something good like clean up rivers. They can just raise the price of tolls, ferries, landing fees and gate fees that get built into airline ticket prices, and so on.
There are no term limits on corporations. They can last forever. And they were never elected in the first place.
So, what are the effects of all this?