The $1.5 trillion number is just made up; he’s only proposing federal spending of $200 billion, which is somehow supposed to magically induce a vastly bigger overall increase in infrastructure investment, mainly paid for either by state and local governments (which are not exactly rolling in cash, but whatever) or by the private sector.
.. And even the $200 billion is essentially fraudulent: The budget proposal announced the same day doesn’t just impose savage cuts on the poor, it includes sharp cuts for the Department of Transportation, the Department of Energy and other agencies that would be crucially involved in any real infrastructure plan. Realistically, Trump’s offer on infrastructure is this: nothing.
.. That’s not to say that the plan is completely vacuous. One section says that it would “authorize federal divestiture of assets that would be better managed by state, local or private entities.” Translation: We’re going to privatize whatever we can
.. Despite a modest rise in interest rates, the federal government can still borrow very cheaply: The interest rate on inflation-protected long-term bonds is still less than 1 percent, which is below realistic estimates of long-run economic growth, let alone the Trump administration’s fantasy numbers. So borrowing now to pay for essential infrastructure would still be good economics.
.. some Democrats feared that Trump really would go big on infrastructure, which might drive a wedge into their party and be highly popular besides.
.. An infrastructure program involving real money could be very lucrative for Trump cronies, or for that matter Trump himself. Yes, there are rules that are supposed to prevent that kind of profiteering, but does anyone think those rules would be enforced under current management?
.. Part of the answer is that in practice Trump always defers to Republican orthodoxy, and the modern G.O.P. hates any program that might show people that government can work and help people.
.. But I also suspect that Trump is afraid to try anything substantive. To do public investment successfully, you need leadership and advice from experts. And this administration doesn’t do expertise, in any field. Not only do experts have a nasty habit of telling you things you don’t want to hear, their loyalty is suspect: You never know when their professional ethics might kick in.
So the Trump administration probably couldn’t put together a real infrastructure plan even if it wanted to. And that’s why it didn’t.