It is one of the few things that Donald Trump and Hillary Clinton agree on: The U.S. needs to spend more money on itself.
Clinton has proposed $275 billion in new infrastructure spending over the next five years, to go along with another $25 billion in loans and guarantees to support private-sector investments. Trump, a builder by blood, has pledged to double that figure, at least. He has called for spending up to $1 trillion on new roads, bridges, broadband, and more. (And that’s not even counting the fantastical Mexican-financed wall.)
The economic need for more infrastructure is obvious. There is considerable work to be done on the intranational capillaries and arteries and valves that circulate Americans around the country. The American Society of Civil Engineers estimates that there is more than $3 trillion of infrastructural work to do before 2020 in order repair, reinforce, and rebuild America’s circuitry, including almost two trillion for roads and bridges and several hundred billion more for airports and waterways.
For those who cynically suspect that a group of civil engineers might be overstating the amount of work that exists for engineers, that’s alright. The virtues of infrastructure spending at this juncture are widely sung. The Washington Post's Matt O'Brien rounds up the proponents, a list that runs the gamut from Bernie Sanders to the IMF and Ben Bernanke. San Francisco Fed President John Williams, the former chief policy adviser to Fed Chair Janet Yellen, recently said the slowly improving economy could benefit from "stronger fiscal policy," which means more federal spending.
The argument for infrastructure spending is three-fold. First, the U.S. will have to update its infrastructure eventually, so the country might as well do it when it’s cheap to borrow, i.e. now. Second, there are still parts of the country where a great number of less educated men aren’t working, and many of them could be brought back into the workforce with a concerted effort to create jobs suited to their skill and brawn. Third, government investment in infrastructure could raise wages in construction, which would contribute to rising wages for less educated workers across other industries.
Sometimes, the term “infrastructure spending” can be a pleasant sounding catch-all phrase that obscures the devilish details, namely, where the money should go. To take one example: Roads are crumbling in southwestern Pennsylvania metros that are losing thousands of people each year; but they also need transit money in metros in the Sun Belt that are gaining tens of thousands of families each year. How is the priority for allocation determined—by population? by rate of population change? by politics? Should the U.S. treat infrastructure spending the way it has treated education spending—by dangling millions of dollars before the hungry eyes of revenue-starved states and promising cash to the ones that adopt certain administration-friendly reforms? The point is that although the raw amount of infrastructure spending matters, the way it’s allocated has the potential to determine which metros are prepared to grow in the next twenty years and which cities and suburbs will be stuck with rusty rails, pockmarked streets, and perilous bridges.
But we might not even get to that point. Trump and Clinton’s rare political kumbaya is almost certain to be wasted, not because of economics, but because of politics. The Republican-led Congress has made abundantly clear their preferential direction on federal infrastructure spending: down. The caucus has refused to raise revenue for infrastructure spending, so that as a share of GDP, money for bridges, roads, ports, and so on has fallen to a 30 year low on their watch. The Obama administration has repeatedly proposed infrastructure mini-stimuli, and the GOP House has repeatedly stiff-armed them.
The party of Eisenhower and Reagan ought to know better. The former general oversaw the establishment of one the most expensive national infrastructure projects ever, the interstate highway system, while the latter raised taxes to pay for bridges and highways, seeing America’s transportation strength as a matter of national revitalization. Things have gotten quite bad in Washington when Trump’s policy chops are making a group of professional politicians look ridiculous.