Hello Professor Wolff. I have a long-winded question for you. I'm a Public Policy major and I'm in the middle of reading Trumps budget. There is a section about providing $1 Trillion in Infrastructure Support. I've watched your April lecture many times now and have grasped the idea of a PPP but I've found to what I believe is a contradiction. In an earlier section, Trump wants to cut funding to Non-Defense Discretionary Spending and i think infrastructure funding is one part of that. However, when the Budget explains that they want to use PPP's to invest in infrastructure, they claim that more Federal investments are not the solution, yet it says in the next couple of sentences, "$1 Trillion will be met by more Federal funding and non-Federal incentivized funding. While the Administration will propose additional funding, those funds will be used on incentivizing additional non-Federal investments. The budget includes $200 Billion in outlays related to the infrastructure initiative." So my question is what is an outlay and how are these outlays being used in this context of incentivizing corporations to loan money to the government for this infrastructure initiative?
I am no budgetary expert, but I think what the $200 billion are for is to "juice" infrastructure projects so that whatever private interests invest (what their "outlays" are) will get a return based on the total value of the infrastructure project. So the public funds will, in effect, subsidized the private return to the private investors. That is what the banks and other likely investors drool at the prospect, while ignorant (or sleasy) conservatives drool at the prospect of a big infrastructure project they can boast about that does not entail too large, budget-busting government investments (i.e. government outlays).
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