Infrastructure and the Economy: The Long and Short View

by | Aug 24, 2021 | Money and Politics, Climate Change, Environment, Wealth Gap

Photo by William Warby

Infrastructure and the Economy: The Long and Short View

by | Aug 24, 2021 | Money and Politics, Climate Change, Environment, Wealth Gap

Photo by William Warby

Today marks the passage of a $3.5 trillion dollar budget blueprint through the House The massive bill has something for everyone in a massive investment in the physical and human infrastructure of the country. No Republicans voted for this bill. This makes one wonder what happened to the notion that the GOP was the party of business. A tiny journey into history shows that investment in both human and physical infrastructure brings about big returns in long-term economic activity. The longest period of prosperity in the country’s history followed FDR/s New Deal initiatives and the WPA (Works Projects Administration) which hired widely to build things for the country and lifted it out of the Great Depression.

So, with the possibility of major investment in the offing why are Republicans dead set against it? The first argument always seems to be, “We can’t afford it.” The falsity of this argument becomes vivid when one looks at the $1.7 trillion tax cut forced through by McConnell and company in 2017. That bill was foisted on one and all with the argument that the tax cuts would pay for themselves by the increase they would cause in the economy. For those who did not keep track of this, that didn’t quite work out that way. Result? The deficit increase under the Trump administration skyrocketed to new, nose-bleed inducing heights.

The argument for the 2017 tax cut was the same old saw used by Regan: the trickle-down theory of economics, that the richest of us, given more resources would invest and raise the lot of everyone. It was a lie then and a lie now. Given more money, the richest among us—save a few more enlightened souls who still retain some humanity—tend to invent new ways to shelter themselves with even more tax dodges. A fabulous example is ProPublica’s reporting of Peter Thiel’s amazing abuse of his Roth IRA, turning a retirement account into a $5 billion tax shelter..

The chief complaint Republicans have with the infrastructure bill is that taxes will have to be raised and they claim—with no factual grounding—that this will hurt the economic recovery.

For the “Party of Business” to oppose investment in the country’s infrastructure is a spin-inducing head shaker of a conundrum. Since this type of investment is shown to have long term beneficial effects, we can assume that their argument and opposition is actually based on something other than the US economy.

If we examine the other activities that Republicans are currently advocating the picture begins to focus—or get blurrier, depending on your perspective. The biggest national effort by members of the GOP is centered on restricting voting. Some party members have openly stated that without these voting restrictions they might never get elected again.

“Trickle down” economics actually worked in the opposite direction. Money traveled upward and poverty traveled downward and outward. $3.5 trillion spent on infrastructure is anathema to Reganite thinking because it will cause wealth to shift back outward again. And the voting power of dollars will again be in the hands of middle class voters whose entire class could see a resurrection from the inexorable grind that the Regan doctrine created against them.

And here we see the actual dollars and cents reason for Republican opposition. It’s not about the economy. It’s about their ability to retain any power at all.

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