Thursday, April 6, 2017

TRUMP: We Are Going to Spend a Trillion Dollars on Infrastructure

Maybe this will put to rest the idea that President Trump is in favor of small government. Keep in mind that infrastructure spending will be on top of his aggressive expansion of military spending.

From the new New York Times interview with President Trump. It looks as though Trump is talking real government spending here by additional massive borrowing, which will, of course, crowd out private borrowing:
THRUSH: Well, how much money in total, there are numbers that have been floating around. It’s two to three hundred billion over 10 years of federal aid.

TRUMP: No. More than that. Much more than that.

THRUSH: How much more?

TRUMP: We’re talking about a trillion-dollar infrastructure.

THRUSH: But I mean, in terms of actual —

TRUMP: We may take that trillion, and we may also in addition use public/private. But we’re talking about an investment of a trillion dollars.

HABERMAN: What would be the breakdown be?

TRUMP: On roads, on bridges, on many different things. And it’s also going to be — we have to refurbish to a large extent...

THRUSH: Can we bookmark that for one second? I just want to ask you about — O.K. Tax credits versus actual money on the table, federal money. You say a trillion total. The estimates out there are two to three hundred billion in federal expenditures as opposed to tax credits. Are those numbers accurate? Give me a general account.

TRUMP: Nothing is accurate now because we haven’t made a final determination. We haven’t made a determination as to public/private. There are some things that work very nicely public/private. There are some things that don’t. The federal government, we’re doing very well you saw, a lot of good numbers coming out. You saw our imports. You saw what happened with China. And various other people that this country has been dealing with over the years. You saw the numbers come out today, they’re very promising. Lot of good numbers are coming out. We are borrowing very inexpensively. When you can borrow so inexpensively, you don’t have to do the public/private thing. Because public/private can be very expensive.
It is also cute that Trump says borrowing can be done very inexpensively now, but this is only because the Federal Reserve is keeping rates artificially low. Trump would never be able to get these rates if it wasn't for the distortions and manipulations of the Fed.

As always, the Fed is an enabler of big government spending and Trump is one to take full advantage of this to expand government spending. And remember, crumbling infrastructure in the United States is a myth.



  1. But I though the Fed has "raised rates" 3 times in 3 years in the face of a perceived "not what a recession looks like" thus destroying the Austrian-lite theory that the Fed couldn't raise rates without causing a recession. Yet, like some Austrian-lites, myself included, Trump doesn't seem to believe rates have been raised in any meaningful sense. Interesting.

  2. "we have some very very shovel ready projects...."