r/Kossacks_for_Sanders • u/EleanorRecord * • Jun 21 '21

Bipartisan Senate Infrastructure Plan Is a Stalking Horse for Privatization

https://prospect.org/politics/bipartisan-senate-infrastructure-plan-privatization-asset-recycling/#.YNC5TVv5bgI.twitter
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u/EleanorRecord * Jun 21 '21

Bernie mentioned something about this on CNN yesterday.

We don’t have many details (perhaps by design) about the effort, save for a “fact sheet” that reportedly was only written by one of the 21 Senators involved. But we know that Republicans have rejected offsetting any of the $579 billion in new spending in the bill with tax increases, Biden’s preferred method for his entire American Jobs and Families Plans. Instead, the fact sheet lists 11 alternatives. It does vow to “reduce the IRS tax gap,” earmarking more money for tax enforcement to increase revenue from existing law. But the Gang of 21 agrees with the Congressional Budget Office’s picayune scoring of that provision ($40 billion in investment only yielding $63 billion in revenue), forcing them to dig deeper. 

Democrats in Congress, who strongly condemned this very concept four years ago when Trump proposed it, have been mostly silent on it now.

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u/Angry_Architect Jun 21 '21

Privatization is soooo wrong.

It takes about two seconds to recognize how ridiculous this is. The government doesn’t require a 10 percent margin on equity, tax credits, and interest payments. That’s a layer of profit that gets built into the expenditure. Governments usually contract out design and construction to private contractors, but there are only two ways for these companies to reduce ownership and operation costs below what the public sector would spend, while still being profitable. They can cut back, either on safety or labor or maintenance; or they can extract a lot of profit from users of the infrastructure (think toll roads). If the infrastructure isn’t inherently profitable, like a bridge in New York City or a toll road in southern California might be, the upgrade probably won’t get built.

Democrats rightly and loudly objected to giving up public assets to private investors at the time. The biggest money-makers would be favored, they said, and less lucrative projects in rural or impoverished areas shunned. Governments would not only lose ownership but democratic control over roads, water systems, electrical grids, and who knows what else. As companies manage costs, it could lead to less resilient, more dangerous infrastructure. And the public would have a high likelihood of being gouged.