Calculated Risk on Trump Economic Plan

Members of Mr. Trump’s team have been talking about a $1 trillion infrastructure plan. However the infrastructure proposal is really a proposal for about $100+ billion in tax credits to spur private investment in infrastructure. The $1 trillion in infrastructure investment is the projected size of the private investment, not the proposed government spending. This proposal is actually very modest in terms of a fiscal boost. If this is a privatization scheme, then there might be a modest short term boost, but the long term impact will be negative.

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Did not realize the “infrastructure plan” is much more sizzle than steak. I have a lot of respect for CR. Another one of the few ideology-free level-headed guys around. His comments on deregulation is also spot on:

On deregulation: Usually regulations are intended to prevent long term negative events, so deregulating has a short term positive impact - even if the regulation is important. An example would be FDA drug approval. If the FDA stopped regulating drugs, there would be snake oil salesmen everywhere. The negative impact of the non-approved treatments would not be realized for some time, and the victims would have no recourse later - since the snake oil salesmen would have moved on. The FDA is not perfect, but these are necessary regulations to protect consumers. The same is true for banking regulation (as we learned during the great recession).

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