Trump’s Infrastructure Plan

President Trump will lay out a vision this coming week for sharply curtailing the federal government’s funding of the nation’s infrastructure and calling upon states, cities and corporations to shoulder most of the cost of rebuilding roads, bridges, railways and waterways.

State budgets are under significant stress for two reasons.  First, republican dominated state legislatures have only one plan to stimulate their economies – cut taxes.  The trade and professional literature offers an endless number of articles clearly establishing that cutting taxes provides no stimulus to an economy. Tax cuts are not based on any rational economic concept.  Rather, proponents support for tax cuts are a political and not an economic argument. Tax cuts have high voter appeal.

Second, cities and state budgets are under stress because of needless tax cuts and unfunded pension obligations. Furthermore, K – 12 and higher ed budgets have been reduced reflecting the declines in state revenues following tax cuts. Any ‘extra’ revenues will be directed towards restoring education budgets, which have a higher priority than infrastructure expenditures.

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