And, of course, as
Paul Krugman noted in November, what was proposed was never very populist:
To
understand what’s going on, it may be helpful to start with what we
should be doing. The federal government can indeed borrow very cheaply;
meanwhile, we really need to spend money on everything from sewage treatment to transit.
The indicated course of action, then, is simple: borrow at those low,
low rates, and use the funds raised to fix what needs fixing.
But that’s not what the Trump team is proposing. Instead, it’s calling for huge tax credits:
billions of dollars in checks written to private companies that invest
in approved projects, which they would end up owning. For example,
imagine a private consortium building a toll road for $1 billion. Under
the Trump plan, the consortium might borrow $800 million while putting
up $200 million in equity — but it would get a tax credit of 82 percent
of that sum, so that its actual outlays would only be $36 million. And
any future revenue from tolls would go to the people who put up that $36
million.
... what reason do we have to
believe that this scheme will generate new investment, as opposed to
repackaging things that would have happened anyway?
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