BY STAS MARGARONIS, RBTUS
The University of Pennsylvania’s Penn Wharton Budget Model predicts that the Trump Administration’s recently unveiled infrastructure plan will generate “little to no impact on the economy.”
The report noted: “President Trump has presented a broad outline for infrastructure policy with a federal commitment of $200 billion. We find that most of the $200 billion will not be spent on programs that encourage state and local governments to vastly expand spending on infrastructure. As a result, the plan has a very small impact on the size of the economy. The plan produces slightly better outcomes when funded by user fees than when deficit-financed.”
Several highlights of the report are:
- There will be little to no impact on the economy.
- The White House’s newest infrastructure plan proposes to increase federal spending by $200 billion to stimulate a total of $1.5 trillionin new spending across all levels governments and the private sector.
- However, based on past evidence, much of the new federal aid would lead to state and local governments increasing total infrastructure investment by less than the value of the aid itself.
- Total new infrastructure investment would increase between $20 billion to $230 billion, including the $200 billion federal investment.
Please see the full report:
http://budgetmodel.wharton.upenn.edu/issues/2018/2/19/the-white-house-infrastructure-plan