In A public investment agenda that delivers the goods for American workers, EPI Research and Policy Director Josh Bivens and Budget Analyst Hunter Blair provide a series of recommendations for crafting an effective public investment agenda that goes beyond infrastructure spending to include investments in child care, education, and health care. They note that while President-elect Donald Trump has previewed a public infrastructure plan, his plan provides no guarantee that any of these recommendations will be met.
In order to boost jobs and economic recovery in the near-term and productivity growth in the long-term, Congress should pass a publicly funded and accountable public investment agenda that secures permanent increases in spending and spreads it over a wide range of physical and human capital investments.
So far, President-elect Trump’s infrastructure plans consist of nebulous arguments that infrastructure should be undertaken by private developers receiving public money in the form of tax credits. While many will claim his plan is simply an extension of public-private-partnerships (P3s) that are currently used by state and national governments around the world, Trump’s plans is not a simple P3—and even if it were, that would hardly be comforting, given the spotty real-world record of P3s. P3s have raised numerous issues driven by a lack of transparency that have boosted corporate profits without providing better or cheaper infrastructure. Trump’s plans of providing infrastructure by tax credits would simply transfer public money to developers in the form of tax credits with no guarantee that net new investments are actually undertaken.
“A larger private role in financing infrastructure investment provides no efficiency gains, but opens up many avenues for crony capitalism, corruption, and rampant inequality of public investments across communities to emerge from an infrastructure investment effort,” said Bivens. “There’s no need to reinvent the wheel here. Public financing and public accountability of projects works.”
Bivens and Blair recommend that any public investment agenda include a broad portfolio of projects, not just “core” infrastructure investment such as roads, bridges, and utility facilities. Non-core investments, such as human-services investments like child care and early childhood education, at least rival core infrastructure investments both as near-term job creation strategies as well as long-term productivity boosters. The authors present data showing that a broad public investment plan would create jobs that benefit a wider range of workers. A large investment in human-service jobs would create jobs for more women and African American workers, while construction jobs would create jobs for mostly white and Hispanic men.
“The most reliable way policymakers can accelerate productivity growth is to step up public investment,” said Blair. “Of course, a good public infrastructure plan would also provide quality schools, bridges and roads, and good jobs.”