Harvard's Lawrence Summers Finds Many Flaws In Trump's Infrastructure Plans

Flaws In Trump's Infrastructure Plan

One of Trump's main economic policies was to spent up to $1 trillion over 10 years to rebuild America's infrastructure. While infrastructure spending has typically boosted economic activity, Trump's plan has its share of flaws.

For example, Trump's plan ignores some of the more urgent repairs needed in fixing potholes and repairing schools. The only infrastructure investments that the policy funds are those that are very commercial and yield revenues.

In addition, the tax credit attached to the infrastructure plan won't be realized by those who are identified primarily as infrastructure investors, such as pension funds because they are already tax free.

Summers did acknowledge that infrastructure investments, if done properly, can indeed stimulate the economy.

There's More

Summers continued that Trump's plan of implementing large and permanent tax cuts and changes to tax laws could actually encourage savings and discourage spending.

In addition, protectionism has already damaged U.S. industries because of the effect on exchange rates, which functioned as a huge subsidy to all the countries who export to the United States and a huge penalty to U.S. exporters.