Must-Read: Ronald Klain (2016): It’s a Trap!

Must-Read: I very much wish it were otherwise—I wish Trump or somebody in his immediate entourage were behind a serious infrastructure economic stimulus and public investment program. It would be good for the country. (It would be good for Trump.)

But nobody is:

Ronald Klain (2016): It’s a Trap!: “President-elect Donald Trump’s infrastructure plan: Don’t do it. It’s a trap…

…Backing Trump’s plan is a mistake in policy and political judgment… [was was voting] for Ronald Reagan’s tax cuts in 1981 and George W. Bush’s cuts in 2001…. Trump’s plan is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors…. Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects…. There’s no requirement that the tax breaks be used for incremental or otherwise expanded construction efforts…. Moreover… desperately needed infrastructure projects that are not attractive to private investors—municipal water-system overhauls, repairs of existing roads, replacement of bridges that do not charge tolls — get no help from Trump’s plan. And contractors? Well, they get a “10 percent pretax profit margin,” according to the plan. Combined with Trump’s sweeping business tax break, this would represent a stunning $85 billion after-tax profit for contractors—underwritten by the taxpayers….

As a result… Trump’s plan isn’t really a jobs plan…. Because the plan subsidizes investors, not projects; because it funds tax breaks, not bridges; because there’s no requirement that the projects be otherwise unfunded, there is simply no guarantee that the plan will produce any net new hiring. Investors may simply shift capital from unsubsidized projects to subsidized ones…