Conservatives attack Trump's expensive infrastructure program

One of Trump's key economic policies was a trillion-dollar infrastructure spending program to rebuild U.S. highways, bridges and airports.

Certainly many of Trump's policies and policy directions such as those on the environment are opposed to those of liberals and leftists but not all his policies are such, including his view on the necessity of rebuilding U.S. infrastructure. Indeed, it is conservatives who already are criticizing his plans to spend up to a trillion dollars over 10 years. Trump claims that his program will create ""millions" of jobs, and compared it to Eisenhower's creation of the interstate highway system. While Trump is no doubt inflating the job creation numbers a bit, this is the sort of program that Democrats could support and attempt to modify. Obama also had an $832 billion dollar program a target also of conservative criticism. During the campaign, Hillary Clintonadvanced her own infrastructure spending campaign of $275 billion over five years financed partly by oil revenue and also a tax overhaul. Trump points out his plan is much larger than that of Clinton's and boasts: “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure — which will become, by the way, second to none — and we will put millions of our people to work as we rebuild it.”

According to an article in Politico, Trump has not made it clear how much if any of the funds for the project would come from Federal coffers. However, it seems clear that his most recent views are quite different from those he outlined earlier in the summer to the Fox Business Network. He said then that the government would spend as much as $550 billion at phenomenally low interest rates. The Politico article notes:“Donald Trump Proposes $550 Billion in New Government Debt,” the resulting Wall Street Journal headline read, suggesting the difficulties such a plan could face in a Republican Congress that has spent eight years lambasting President Barack Obama over deficit spending. The conservative site Newsmax called his idea “a steaming pile of hogwash.”

His more recent plan crafted by economist Peter Navarro and financier Wilbur Ross would rely heavily on private funding driven by a tax credit. They claim that costs would be reaped from tax revenues that would come from the resulting jump in business activity. The plan is said to leverage public-private partnerships, and private investments through tax incentives, to spur one trillion dollars in infrastructure development over ten years. This language suggests that there will be relatively little or even no federal money being invested in the development. Trump claims the plan could be revenue neutral. A comparison of Hillary's plan and Trump's can be found in this article by Navarro.

Dan Holleer, spokesperson for Heritage Action for America, questioned Trump's assessment of the job-creation potential of the program: "Conservatives do not view infrastructure spending as an economic stimulus, and congressional Republicans rightly rejected that approach in 2009. It would be a mistake to prioritize Big Government endeavors over important issues like repealing Obamacare, reforming our regulatory system and expanding domestic energy production.” The group is the political arm of the conservative Heritage Foundation. The Trump initiative also was criticized by the Competitive Enterprise Institute(CEI) ironically a group that Trump's own transition team has used for advice on environmental issues. Marc Scribner of the CEI wrote: “There is little evidence that these public works projects promote long-run economic growth.” in a blog post called "The Great Infrastructure Myth".

While the idea of infrastructure improvement has support among some key Republicans in Congress and is likely to gain the support of many Democrats the issue of how to pay for such improvement has been divisive. House minority leader, Nancy Pelosi said the the Democrats want to work with Trump "to pass a bill very fast". The group Building America's Future chaired by former Democratic Pennsylvania Governor Ed Rendell and former New York mayou Michael Bloomberg pledged to work with Trump and Congress to "tackle this unifying issue in the first 100 days."

Bud Wright, executive director of the Association of American State Highway and Transportation said: “Financing is a nice piece of the puzzle. We certainly believe that we need additional federal investment, but really finding funding to do that — using some traditional or creative sources to generate new revenues — is important." Ed Mortimer, of the U.S. Chamber of Commerce said that the group would tell the Trump administration that some kind of sustainable funding must be part of any new infrastructure spending plan. With respect to this issue there is general agreement that it needs to be addressed urgently and it is possible that both parties can work together to come up with a plan to improve U.S. infrastructure.

US global military role drains dollars needed domestically

The U.S. spends far more than any other country in the world on defense. While the US will be withdrawing more troops from Afghanistan, it is nevertheless increasing its involvement in numerous countries including new activity in Iraq.

Eric Margolis in a recent article points to the many areas that the US feels it is necessary to be involved militarily including Somalia, Afghanistan, Iraq, Syria, and in the Ukraine among many other places. As Margolis points out, trying to defend everything may be a losing proposition: To quote Frederick the Great, “he who defends everything, defends nothing.” To which we may add, he who spends on wars everywhere, ends up broke. And he who ignores domestic needs for the sake of imperial glory abroad is cruising for a bruising.  

 Margolis notes that Obama is being pressured by the media and hawkish Republican politicians to attack in Syria and confront the Russians in Eastern Ukraine. Margolis applauds Obama's decision not to act in haste without having a clear understanding of the results. Margolis refers to the old saw that fools rush in where angels fear to tread. He claims that Washington has messed up in the past with its interventionist policy. The best plan in many situations might be to do nothing at all or at least leave it to other parties to take action. 

The US lost a long war in Vietnam. The results of a decades long war in Afghanistan and a long occupation of Iraq or even the regime change in Libya are hardly indications that US intervention has been a huge success. Some US hawks seem to think that the solution is to stay longer, spend more money, and lose more US lives. 

 Margolis claims that Iraq bombing even at present costs about $7.5 million daily or over a half billion since June. Almost 8,000 US troops were killed in action in the Afghan and Iraq wars.

The cost of medical care and pensions for troops is enormous. The costs climb long after conflict a particular war may be over as a recent study showed: ".. the cost of caring for Vietnam and first Gulf War veterans is still climbing. But the bill for Iraq and Afghanistan is likely going to be steeper still due to higher rates of survival, more generous benefits and more expensive medical treatments. Of the 1.56 million troops that have been discharged, over half applied to receive lifetime disability payments.. "  

 An article in the Washington Post suggests that Washington needs to beef up its expense budget at the same time as it cuts out some spending such as too generous benefits for veterans. Given the scandals about veteran's medical treatment, as the article mentions, it will be a hard political sell to cut spending in these areas because of the "powerful lobbies" involved: Every dollar spent on health benefits for retirees is a dollar we can’t spend training and equipping men and women to deal with the Islamic State, Putin and other threats. The moral appears to be that money should be spent liberally to prepare members of the armed forces to fight and risk their lives but after they have served, been wounded or retired, the government should pinch pennies to spend on a new batch. 

The article notes that military pensions represented a $51 billion expenditure in 2014 and was expected to grow to $62 billion in 2024. Even if the size of the US armed forces actually shrinks in the future these costs will still rise for some time. The health care costs in the military budget are expected to rise from $49 billion in 2014 to $70 billion in inflation-adjusted dollars in 2028. Obviously this is another area the article suggests that is ripe for reform. While the article stresses that a dollar spent on health care or pensions is a dollar that is not spent on training and equipping service members to fight in the myriad locations the US sees action is required, those dollars also are lost to alternative uses such as increasing expenditure on education. Finland is able to provide free post-secondary education for all of its citizens. The US with all its wealth saddles many of its students with enormous debts.

 According to CIA figures the US spent 640 billion on defense or 4.35 percent of its GDP, the most in the world, while Finland spent 1.47 percent even though it is right next door to Russia. The total global expenditure in 2012 was $1747 trillion so one out of every three dollars spent on defense is by the US.  

US infrastructure is in dire need of repair.The United States spent roughly $100 billion less (in real terms, that is, discounting for inflation) on infrastructure in 2012 than it did in 2002. States 

only spend 5 percent of their budgets on transportation. Spending on mass transit has gone up, but we are still spending about $25 billion less than we need to. The American Water Works Association estimates that about $1 trillion will be needed for urgent pipe repairs over the next twenty-five years. The Highway Trust Fund is on track to run up a $77 billion deficit by 2019. These are just a few examples of the many infrastructure programs that are woefully underfunded. 

Every dollar spent on defense is a dollar that cannot be spent on health care, education, and infrastructure, or helping cities such as Detroit to come out of bankruptcy. Terrorists will not need to attack the US homeland. The expense of trying to prevent an attack will ensure that America's infrastructure simply falls apart. Bridges are already collapsing. Apparently events such as these are not a threat to US security.